18-12-2012, 03:24 PM
How AirAsia can be a leader in the lowest cost carrier in the airplane industry
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Introduction
“Without a strategy the organization is like a ship without rudder, going around in circles”. (Joel Ross and Michael Kami)
Nowadays, the competition among airplane industries is very tough. According to Daniel Chan (2000), with just about two years to go to the turn millennium, air wars over Asia are hotting up, with some of the world’s biggest airlines engaged in intense over Asian skies[1]. Each Of Airplanes Company in the world trying to conduct some strategies to compete with another competitor in their industry. A lot of airplane companies come out with different strategies to make their company better than their competitors. To compete with their competitor in the business environment, a company needs to make a strategy to achieve their long terms objective and can be successful for doing their business.
Moreover, to be successful in their long terms objective and their business, company need to identify their strategic management, because with good strategic management company can be achieving their vision and mission to achieve the successfulness in their business. Regarding this issues, the strategic management becomes important due to the following reason such as globalization to survival their business, and than e-commerce become the critical success to the company nowadays.
The two following reason are need to take into consideration, and than to be successful in the company management, a company needs to consider the company ability and how to integrating it with the as well as main factor in the internal and external factor. The main factor in the internal and external factor can be identified with SWOT analysis. The internal factor can take a look into strength and weakness in a company, and for the external factor, a company can look at opportunities and threats in the external environment.
Furthermore, according to Daniel Chan (2000), the airline industry is a unique and fascinating industry. It captures the interest of a wide audience because of its glamour, reach, and impact on the large and growing numbers of consumers/travelers worldwide[2]. Based on this statement, airline industry become the greatest opportunity for AirAsia. The growing numbers/travelers worldwide can be the wonderful opportunity for AirAsia for running their business. In addition, to captures and attract a customer to choose AirAsia as an airline option, AirAsia need to develop and create a wonderful strategy and come out with special offering to their customer to successfully in their business.
AirAsia Current issues: how to be low cost carrier leader in airline industry
On this section, I will discuss about the AirAsia current issues: how to be low cost carrier in airline industry. This section involve, why AirAsia need to consider a strategic management, and than what is the current issues that happen in AirAsia Company. This section will discusses the importance of developed and consider strategic management in AirAsia Company, and identify of current issues in AirAsia Company.
Why AirAsia need to consider a strategic management
Why a company needs to consider a strategic management nowadays? According to Daniel Chan (2000), since the 1970s, the competition for the Asian air travel market has always been intense. This became more intense in the 1990s as traffic volumes were squeezed[3]. Based on that statement, the competition among airplane industry will become more grow, traffic volume also would be increase, and also the Asian air travel market has always been intense. When the competition in the airplane industry becoming though, complex, and rapidly change, AirAsia company as a company that joined in the airplane industry business need to thinking strategically and also must preparing a good strategic management. The AirAsia strategic management needs to effectively and efficiently prepare and implement in the AirAsia company management. Why AirAsia need to consider strategic management? The first reason is because the airline industry is a unique and complex industry[4]. Based on the statement, the complexity and unique of the airline industry, AirAsia need to come out with the greatest strategy to compete with their rival in the same industry. Without the right strategic management, its possible AirAsia could not be able be compete with the complex business environment in the airline industry.
Why AirAsia stressed to be low cost carrier in airline industry
Datuk Tony Fernandez as CEO of AirAsia Berhad said his philosophy is very clear: before a business can grow, it needs to have its costs under control. It must be cost-efficient and profitable, and it must create value. Costs that do not add value must be contained, reduced and even eliminated. I have been asked by various people, “How much lower can your cost reduce? You’re already the lowest in the world!” My direct answer is if we do not strive to be more efficient and choose to be complacent – our days are numbered. This is a continuous task we have to face head on year on year; it is the critical ingredient to operate a successful business[11].
Based on the Datuk Tony Fernandez said, AirAsia can be growing in the airline business if they can control their cost. The cost that they have to running there must be efficient and reliable. Everything that can make inefficiencies must be reduced and possibly to eliminate. What a Datuk Tony Fernandez said is very strong opinion about their company to running their business. AirAsia can be possibly competing with another airplane industries if they can make efficiencies to reduce cost and make the low possible fare than another airplane industries.