PACE - Professional & Continuing
ON-LINE DISTANCE LEARNING
MASTER IN BUSINESS ADMINISTRATION
NUR EFIZA AB. RAZAK
SUBJECT: Strategic Management
SUBJECT CODE: MGT6303
Coursework Assignment 2
Due Date: 31st March 2015
In this second assignment, I have choose AirAsia and AirAsia X Group to further
illustrate their strategic direction and development which is crucial for their survival.
With a new travellers on the scene, it is inevitable that AirAsia will keep on growing.
With hubs in KL, Bangkok, Jakarta, Sabah and Sarawak, AirAsia operates in a region
with the world’s largest population, Asia. AirAsia’s strategy for growth is based on
the ...view middle of the document...
There are few approaches which are commonly used such as
increasing present customers’ rate of use, attracting competitors’ customers and
attracting non-users to buy the products or services. Examples of organization that
have benefit in high returns are McDonald’s, Apple Computer and Goodyear.
In a stable market, any organization undertaken this strategy will benefit a lower risk
as compared to other strategy. However, in an unstable market situation, the same
organization will suffer higher risks. IBM for example had developed OS/2 for its
computer line. In doing so its existing clone has become absolete. While penetrating a
specific industry market, an organization might be susceptible to changes. Mack
Truck has lost $20 million due to slumping in the truck industry.
An organization pursuing market penetration is more aware of new trends as
compared to its competitors. But lack of awareness will caused them extreme losses.
Many ordinary watch manufacturers faced bankruptcy as they failed to adhere to
competition from the fashion industry such as Guess and Swatch. The organization
also faced a higher opportunity cost by ignoring other opportunities that bring more
profit to the business.
The Chief Executive Officer of AirAsia, Ms. Aireen Omar mentioned in The Star
newspaper not long ago, that AirAsia currently have 60 percent domestic and 40
percent international market share and they intended to maintain and grow the market
AirAsia’s Free Seats promotion, which was recently launched, has successfully
attracted overwhelming response from existing and new customers. The promotion
started from Tuesday, 24th March till Sunday 28th March. With RM0 customers are
able to travel to more than 20 countries. The free seats are almost fully booked
especially during school holidays and festive seasons.
They eliminated the fuel surcharged and introduced new routes across the group.
Siegtraund Teh, AirAsia Group Chief Commercial Officer also said by doing so,
AirAsia are able to fly more people with an affordable cheaper fares to such locations
as Langkawi, Penang, Kota Kinabalu, Bangkok, Bali, Hong Kong, Kalibo,
Melbourne, Seoul, Sapporo and Taiwan.
AirAsiaGo customers enjoy up to 75% saving if bookings are done together with
accommodation and up to 50% for accommodation if only in the same booking and
travel period. During this promotion, AirAsia BIG Loyalty Programme and BIG
Prepaid Master Card Holders will be able to gain points and to redeem their flight at
Extremely cheaper seats advertisement will definitely attract bigger market. Who will
not be attracted to fly when the tickets are cheaper than bus fare? When these people
frequently visit the website and later found that no more free are seats available, they
might consider buying the normal priced tickets at it is still cheaper as compared to
other airlines. AirAsia is taking advertising seriously and this always help them...