Air Asia XPresented by:

Mahwish ShaikhAhsan ali Kehar Mehrunisa ShaikhZehra Shoro Rehan ali kango

Assigned by:Sir Abdul Salam

Content

History Vision Mission External factor

evaluation(EFE) matrix

Michael Porters five forces

Internal Factor Evaluation

Swot matrix Grand Strategy Matrix The Quantitative

Strategic Planning Matrix (QSPM)

Conclusion

ZEHRA SHORO

Vision And Mission– Vision statement

– To solidify our position as the global leader in Long-haul, low cost aviation and create the first global multi-hub low-cost carrier network along with other carriers of the Air Asia group.

– Mission statement:To be the best company to work for whereby employees are treated as part of a big family Create a globally recognized ASEAN brand To attain the lowest cost so that everyone can fly with AirAsia maintain the highest quality product, embracing technology to reduce cost and enhance service levels

History

Marketing

Competition

MAHWISH SHAIKH

External factor evaluation(EFE) matrix

Interpretation: Air Asia X is doing good in industry as their EFE is above average as their result is 2.95

S. No

Key external factors Weight Rating Weighted score

Opportunities1 New Products ( charter planes) at low cost .05 1 0.052 Create more business class cabins for higher revenue .15 2 0.33 High demand so new destinations can be achieved .1 4 0.44 New markets can be targeted Ex: china and India .1 4 0.4THREATS1 Intense rivalry from competitors .15 3 0.452 Fuel prices .1 3 0.33 Increase in MRO cost .2 3 0.64 Economic conditions .05 1 0.055 Government airline .1 3 0.4TOTAL 1.0 2.95

Michael Porters five forces

Interpretation: Starbucks has been strong in all five forces within the completion and industry

Competitive rivalry or competition Low They have threats from the competitors but currently they have low rivalry due to their differentiation and low cost in the industry

Bargaining power of buyers or customers

low There is very low bargaining power of buyers because, Air Asia X allows customization of tickets, low cost ticket in long distance flights

Bargaining power of suppliers High There is very strong power of suppliers among the airline industry, because there are few aircraft manufacturing companies, airports cost and there are few companies which provide airplane fuel, aircraft parts and equipment’s

Threat of substitutes or substitution Low There are very low substitute products at the cost which Air Asia X is providing

Threat of new entrants or new entry Low There is very low entry of new entrants because there are already so many competitors in the market, and opening a new air lines cost years in getting the license from aviation industry and government approvals.

Internal Factor Evaluationkey internal Factors weight Rating Weighted Score

Strengths1 Low costs 0.15 4 0.62 Fleet flexibility 0.025 3 0.0753 3-3-3 seating order in total 377 total seats in the plane 0.1 4 0.44 Safety conscious 0.025 3 0.0755 Low on ground operational cost 0.025 4 0.16 Political support from government 0.025 3 0.0757 High Brand image 0.1 4 0.48 Own training academy 0.025 3 0.0759 Parent company Resources for backing 0.1 4 0.410 Focusing on scale 0.05 4 0.211 Availability of customer’s information from Air Asia 0.025 3 0.07512 Ticket transparency 0.05 4 0.213 Maximizing flight utilization 0.05 3 0.15Total 0.75 2.225

Weakness1 Low margin on profit 0.05 1 0.052 No terminal facility at facility at airports 0.05 2 0.13 No own Maintenance and repair 0.025 2 0.054 Sharing website with parent company (website interruption) 0.025 1 0.0255 Malaysian Government restriction of new destination 0.1 2 0.2TOTAL 0.25 0.425NET TOTAL 1 2.65

AHSAN ALI KEHAR

SWOT MATRIX

Strength-Opportunities– New markets and new demands can be

created by providing those services with low cost and high quality can be moved to other countries as well (S1, O4)

–

– With strong brand image new business cabinet class can be created for generating higher revenue. (S7, O2 )

Weakness-Opportunities• A s air Asia is keeping low profit

margin they should discover more destination and create new demands (W1,O3)• Because of Malaysian Government

restriction of new destination within the country now new markets can be tapped in other countries. (W5,O5)

SWOT MATRIXStrength-Threats

– As intense rivalry competition with the competitors air Asia is giving them tough time by providing good services with minimum cost (S1, T1)

– Fuel prices are the biggest threat for any airline. Air Asia has managed it with very well by maximizing flight utilization and low operation cost ( S5,S13 T2)

– Increasing MRO (Maintenance and Repair) cost are also big challenge. Air Asia has coped with maximum utilization of their flights and operations ( S13, T3)

Weakness-Threats• As Air Asia is keeping low margin

on profit increasing MRO cost can affect them in future (W1, T3)• With No terminal facility at

airports in this intense rivalry competition with government airlines and others is also a big threat for Air Asia. (W2, T2, T3)

KANGO, REHAN ALI

Space Matrix

Space MatrixFinancial Position Rating1 Differentiation and low cost is the source of revenue +72 Air Asia X15 million USD behind the projected revenue +33 Other low budget airlines halted operations because of

Financial crisis +5

4 Resourceful and established parent company +6Total 21

Industry Position Rating1 Lots of customers for long haul distance +72 Air Asia provides customer to choose flights +43 Own Social media website and booking and promotion on it. +4Total 15

Stability Position Rating1 Advantage of low cost -12 Advantage of high brand image -33 Volatility in fuel price and maintenance and repairs -44 Air asia hold Sky trax in 2008-09 -1Total -9

Competitive Position Rating1 Pre booking -22 Low cost(cost leadership) and differentiation -13 Huge market share of lower class and middle class -14 Geographical location of Malaysia covering huge markets of

china and india-3

Total -7

Space Matrix• SP Average is -9 ÷ 4= -2.25• IP Average is +15 ÷ 3 = 3• CP Average is -7 ÷ 4 = -1.75• FP Average is +21 ÷ 4 = 5.25• Directional Vector Coordinates:• x-axis: (-1.75)+3= • y-axis: (-2.25) + (+5.25) = 3

MEHRUNISA SHAIKH

Internal External Matrix

Interpretation:Air Asia X’s total weighted score of IFE is 2.65 which relay in average division cells. EFE total weighted score is 2.95 which is in medium division cells. That relays in second stage which is the (with hold and maintain) Stage for any company. Here Air Asia X can go for the strategies like market penetration and product development. These will be the best and most suitable strategies for them in this division.

The Quantitative Strategic Planning Matrix (QSPM)

There are two alternative strategies which Air Asia X need to consider• (1) More premium seats (flay bed seats)• (2) Initiate talks with Malaysian

government and get permission for new destinations• According to the sum of total attractiveness

we analysis that strategy 2 with Attractive score of 3.775 indicates that Air Asia X need to initiate talks with Malaysian government and get permission for new destinations.

Key Factors Weight

AS TAS As TAS

S. NoOPPORTUNITIES1 Malaysian airline restructuring .05 1 0.05 4 0.22 Create more business class cabins for higher revenue .15 3 0.45 1 0.153 High demand so new destinations can be achieved .1 2 0.2 3 0.34 New markets can be targeted Ex: china and India .1 1 0.1 2 0.2 THREATS1 Intense rivalry from competitors .15 2 0.3 3 0.452 Fuel prices .1 - - - -3 Increase in MRO cost .2 - - - -4 Economic conditions .05 1 0.05 2 0.15 Government airline .1 1 0.1 2 0.2

Total 1 - - - -STRENGTH1 Low costs 0.15 1 0.15 2 0.32 Fleet flexibility 0.025 - - - -3 3-3-3 seating order in total 377 total seats in the plane 0.1 2 0.2 3 0.34 Safety conscious 0.025 - - - -5 Low on ground operational cost 0.025 1 0.025 2 0.056 Political support from government 0.025 1 0.025 2 0.57 High Brand image 0.1 2 0.2 3 0.38 Own training academy 0.025 - - - -9 Parent company Resources for backing 0.1 1 0.1 2 0.210 Focusing on scale 0.05 - - - -11 Availability of customer’s information from Air Asia 0.025 2 0.05 3 0.07512 Ticket transparency 0.05 - - - -13 Maximizing flight utilization 0.05 1 0.05 3 0.15WEAKNESS1 Low margin on profit 0.05 1 0.05 2 0.12 No terminal facility at facility at airports 0.05 - - - -3 No own Maintenance and repair 0.025 - - - -4 Sharing website with parent company (website interruption) 0.025 - -

5 Malaysian Government restriction of new destination 0.1 1 0.1 2 0.2Total 1 2.2 3.775

Q1: what is the general environment in the global airline industry?

– Airline industry is an important factor in economic growth of many global economies. It is one of the industries where the rules and regulations are highly sensitive because a single mistake could not only cost industry a loss of million but can cost the world some priceless and precious lives of the peoples. Passengers are increasing day by day but in that industry, there is very difficult to enter. Economic stability is the major cause which can make the airline successful, however airlines consumption of fuel is very vast so their profits and operations have huge impact if the price changes.

Q2: What factors led to the success of air Asia as it grew and expanded from Malaysia to other destination in southeast Asia and beyond?– Vision of the leader

– Low cost (cost leadership)

– Large number of customers

– Relying on their own

Q3: What broad elements of AirAsia’s original business model had to be revisited as it introduced AirAsia X and moved beyond short to medium hail service to longer haul service? How did industry and competitive environment change during this expansion?

– Tony Fernandes wants to move to long haul from long time, he had to wait because the strategies which he had applied to AirAsia was different , so after he got the positive response from AirAsia then he decided to move to long haul but with the same elements like low cost and differentiation, at that time Singapore based airline was providing the low cost fare in long haul but they were not as much as low like the AirAsia X so in short time they became the market leader by capturing the huge market share.

Q4: How can X best leverage the extensive network of the regional sister company AirAsia to select new and profitable destination for X?

– AirAsia X can best leverage from the extensive network of AirAsia by using their website through which they can start a poll by asking from the audience of short haul AirAsia passengers that if they wanted to fly in long haul which destination they would want to go, same type of surveys they could do via using the email database of AirAsia

Q5: What specific offerings had to adjusted or newly provided when AirAsia X introduced long haul service? What was the general response? did the differ between markets?

1. They had to focus more on the economies of scale

2. They should sell the items only which they think people will buy,

3. They should adjust in food catering that all the food they carry onboard must be sell in order to reduce the wastage

4. In AirAsia, they had no flatbeds so in long haul they had to provide some business class seats

5. As in long haul customers’ needs comfort so they need to provide comfort kit etc.

6. As long haul, operated internationally currency exchange system should be onboard

Q6: How can Darren Wright help shift his marketing team's mentality away from a startup mindset and simultaneously and prepare for a global IPO within the next twelve months?

– All of the marketing teams in different countries were working individually there was no integration and collaboration among them so it was difficult to figure out the total expenditures of these advertisings so he integrates the advertising activities globally and Osman Rani appointed a new CFO to look out the all the finance related activities,

Q:7What is your general assessment of X's prospects and future?– As X is currently enjoying the huge market share, their future could be more

profitable if they could explore some new locations, they should position themselves as the market leader among the low budget airlines so they could ripe the revenue from the brand image as well, they should also get political support from the government as X bringing huge revenue and also promoting the tourism,

Conclusion• Customer Safety is very important in the airline industry, so for that there

are very tough and high rules and regulations to enter in the airline industry and Air Asia X main objective was to provide the safety to the customers with lowest cost in the airline industry, they have advantage of the rich parent company AirAsia which is not only resourceful but contains huge domestic market share with high brand image. As AirAsia X emerges form the Air Asia they had to adjust the multiple offerings so meet the requirements of the long-haul customers. AirAsia X enjoying great market share in the lowest budgeted airlines and they have the opportunity to increase that by entering in to the new markets like china India and Pakistan so they have very productive future ahead.

THANK YOU..