Strategic Management and Leadership in Air Asia

This article discusses the success of Air Asia in the competitive market through strategic management and leadership. It covers the company's value chain and VRIN analysis, innovation strategy, and external factors affecting its future. The article also highlights the importance of technology and employee training in achieving success.

Strategic management and leadership

Strategic management and leadership
Table of Contents
1.)Introduction.................................................................................................................................1
2.)Company achieved success in the recent years...........................................................................1
3.) Reason behind achieving success...............................................................................................1
4.) Value chain and VRIN analysis of Air Asia..............................................................................3
5.) Leadership..................................................................................................................................5
6.) Innovation strategy.....................................................................................................................6
7.) Difficult for the company to be successful in the market...........................................................6
Conclusion.......................................................................................................................................6
References........................................................................................................................................7
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Strategic management and leadership
1.) Introduction
Air Asia is considered as one of the largest airline company and its headquarters is in Malaysia.
The company manages its operation in more than 25 countries. The main aim of the company
is to offer the services at low price. The CEO of the company is Aireen Omar and Tony
Fernandes. The slogan of the company is “Now everyone can fly” (Air Asia, 2018). The
company achieved success in the market by attaining the large market share in the high level of
competition.
(Source: Air asia, 2012)
2.) Company achieved success in the recent years
In the present scenario, it has been seen that company is considered as one of the largest
company and also enhanced its market share. The market share of the company has been
enhanced by 1.7% in 2017. In 2017, the company carried more than 43.23 lakh passengers (Air
Asia, 2018).
3.0) Reason behind achieving success
There are various due to which the company achieved the large market share. In the coming
phase the discussion will be made on seven business reason due to which the company
achieved success in the market.
3.1) Smart fuel cost saving technique
One of the techniques considered by the company is related to cost saving techniques in which
cost relates with the fuel. It has been seen that company considered this strategy so that it can
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Strategic management and leadership
be easy for the company to offer customer effective services. The technique considered by the
company relates with fuel hedging. This strategy helped the company to achieve success by
offering the services to the customers in less cost. By offering services at less cost, the demand
of the customers in the market enhances and also through this the company achieved success in
the competitive market (Nigam, 2008).
3.2) Mixed model
Air Asia also considered the strategy, in which they have considered mixed model where they
can offer value added services and can also deviate from the pure budget model. It has been
seen that company focused on the long haul flights services by considering value added
services. Due to this has been simple for the company to make money. Through this it can be
easy to enhance the customer satisfaction which impacts the overall profitability of the
company (Nigam, 2008).
3.3) Online marketing strategy
The company also considered online marketing as the strategic analysis. Due to this the
strategy the company attained large market share and also customer base has been maintained.
It can been stated that through online platform the company convey messages to the customers
which not only attract the customers towards the products but also enhances the sale of the
company (Taneja, 2016).
3.4) focused on digital technology
It has been examined that leader of the company focused on considering the digital technology
to achieve success. In this context the company also considered unique thing related with Air
Asia flights which is inflight magazine travel 3Sixty which reminds about “touch me, feel me
and also flip me over, but don’t take home.” This is also one of the strategies which considered
by the company so that it can be simple to attain large market share (The Asian entrepreneur,
2016).
3.5) Training
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Strategic management and leadership
It has been investigated that one of the best strategy considered by the company is related to
training. The company focused on giving training to the employees so that they can give their
best and it will also enhance the overall experience of the customers. It can be examined that
10 percent of Air Asia of the employees is made up of female pilots. Training is the strategy
considered by the company so that self-confidence of the employees can be boosted and it also
positively impacts the overall activities of the company (Taneja, 2016).
3.6) Promotional strategy
Promotional strategy is also related with the social media through which company offers
discounts services to the customers and it directly enhances the overall market share of the
company. Air Asia put all the efforts and resources by considering the financial resources to
market the services on the online platform. The website of the company can easily navigate
and enhance the experience of the customers (Rosenbaum-Elliott, Percy & Pervan, 2015).
4.) Value chain and VRIN analysis of Air Asia
Primary activities
 Inbound activities
It has been seen that in this category the company focuses on proper scheduling of the flights
by emphasizing on the strategy of the competitors. Also the focus is given on reducing the
entire cost of fuel by purchasing it in advance. The routes are also planned in such a manner
which helps to reduce the entire cost.
 Outbound logistics
Air Asia focuses on maintaining the activities through online platform. Like the process of
ticketing is done by focusing on the online platform. In this it has been seen that customers can
easily book their tickets online and also they can easily print their boarding cards by sitting
anywhere in the world. Also, the company considers general electric engine or enhancing the
safety of the customers which positively impact the overall activities of the company (Pearson,
Pitfield & Ryley, 2015).
 Sales and marketing
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Strategic management and leadership
Air Asia also have good image in the market and now days marketing has given effect on the
overall sales of the company. It has been seen that Air Asia focuses on giving advertisements
by sponsoring in the events related to race and also famous personality are used which help in
promoting the overall brand image of the company. Also, in many official functions it can be
analyzed that the chief executive Fernandes always wear the official red cap of Air Asia and T
shirt in the official function which impact the overall company image of the company in a
positive manner (Pearson, O’Connell, Pitfield, & Ryley, 2015).
 Services
In the present era, to retain the customers is considered as one of the difficult task so to
maintain the retention of the customers Air Asia offers different types of services to the
customers. Like of the flights gets delay by more than 3 hours then there are many different e-
vouchers which are given to the passengers. Passengers can easily book their checked baggage
for the low price and also with this it can be easy for the customers to book the hotels and cars.
This is considered as one of the best service which is given to the customers and with this the
direct can be seen on the overall sales of the company (Adapa & Roy, 2017).
Support activities
There are various support activities which are considered by the company so that it can be easy
to maintain the activities.
 Firm Infrastructure
Air Asia has a good firm infrastructure which involved from a classic Lcc into the integrated
service to the customers and they are also emphasizing on the goals. The services which are
provided are of low price and they are emphasizing on their goals and making the process of
decision making easy and flexible.
 Human resource management
Air Asia is capable of hiring the employees and they recruit those employees who are multi-
talented so that they can easily come over the hindrances in the activities and can manage their
overall vision of low price airline. The company also compensates the employees for
motivating them so that they can give their best towards the activities (Percy & Elliott, 2016).
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Strategic management and leadership
 Technology development
Air Asia considered the technology to reduce its cost and to maintain the activities. The
company considered yield management system which considers the operating cost and also the
expected revenue and also considers computer reservation system as it is web based
reservation. It also affects the direct sale engine which reduces the middle man and also they
focus on implementing resource planning system.
With all these factors the company attained the competitive advantage and enhances its market
share in the competitive market. VRIN model is one the It has been seen that Air Asia is one of
the flights that offers low cost to the customers and also focuses on offering in-flight
entertainment. The inflight entertainment offered by the company is rare in nature and they
used this so that it can be easy to promote the services of the company.
Also comfortable seats are given to the customers so that they can enhance their experience.
This resource can also be considered as the temporary competitive advantage but can help to
enhance the overall experience of the customers.
5.) Leadership
Leadership is also one of the factors that have given an opportunity to the company to attain
success in the competitive market. It can be examined that due to proper leadership the
company is able to achieve success in the market. The leader of the company is Tony
Fernandes who has the qualities like self-confidence, global mindset, and emotional
intelligence and also he is one of the leaders who motivated its employees in the workplace.
The major achievement is just because of the leader who considered accurate decisions so that
it can be simple to enhance the market share. It has been seen that he always take the decisions
by consulting with the employees (Hill, Jones & Schilling, 2014).
This is one of the reason due to which the company achieved success in the competitive
market. The leader also considered transformational leadership style so that it can be simple to
manage the work. Tony Fernandes has maintained the organizational culture where the
employees can easily share their ideas and feedback with him (Fiset & Dostaler, 2015).
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Strategic management and leadership
The employees are also treated equally which enhanced the overall level of confidence and
motivated them towards their work. Due to his leadership the organizational culture of the
company is positive and employees are motivated towards their work. He also focused on the
human relations theory where the employees are motivated and appreciated by the leader for
their work. By considering all these factors in leadership the company achieved success in the
market.
6.) Innovation strategy
It is also one of the strategies which are considered by the company in the competitive market
and due to this strategy the company attained success. The company showed innovation in its
services which helped to attain the large market share in the high level of competition
prevailing in the market. It has been investigated that Air Asia X introduce innovative empty
seat option and it is one of the first airline who offered its guests traveling in economy, a
chance to get all three seats in a row for a nominal fee (Air Asia, 2012). This is considered as
one of the best innovative approach which enhances the level of satisfaction of the customers
and it has given positive impact on the entire working of the company.
7.) Difficult for the company to be successful in the market
One of the external factors is related to high level of competition prevailing in the market.
There are many competitors Jetstar airways, SilkAir and Tiger Airways. It has been seen that
this can be considered as one of the reason that can affect the growth of the company. So, in
this case it is important for the company to focus on giving good salary to the employees
according to their qualification so that it can be easy to maintain goodwill in the market. It can
help in retaining the employees in the workplace and also they will focus on giving their best
towards the activities of the company (Ko, 2016).
PEST Analysis
Social factor
It can be analyzed that there are many passengers in Malaysia who are reluctant to board the
flights for long hours. It can be seen that if the routes are longer then the fewer price conscious
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Strategic management and leadership
the customers will be. The customers do not prefer to board the flights for long hours if proper
services are not offered to them. So, this is one of the factors which can affect the future of the
company. Therefore, in this it is necessary for the company to focus on scheduling the prices
which are for short duration and also the focus should be given on the prices so that it can be
easy to achieve success. The company can be successful when safety plans are introduced for the
customers in which the flights should be scheduled for fewer hours. This will help in enhancing
the overall satisfaction level of the customers and can also help to achieve the large market share
(Jeddi, Renani, Khademi, Shokri & Noordin, 2014).
Through this it can be seen that company will be successful with cost effective services are
offered as it can give positive impact on the overall activities of the company. It is important for
the company to focus on the enhancing the overall satisfaction level of the customers so that
growth can be attained in the competitive market and also it will emphasize on maintaining the
overall strategies in a proper manner (Hosseini, Tahsildari, Hashim & Tareq, 2014).
Technological factor
This is also considered one of the important factor companies as it impacts the overall working
pattern in the workplace. This factor can affect the future of the company and it can also help the
company to maintain its competitive advantage. It can be analyzed that AirAsia provide online
services that consider air ticketing which involved other services like hotel booking and travel
insurance.
Also, by focusing on the cost, it can be seen that company has pushed its online or internet
services so that customers can be attracted towards services offered by the company. This also
makes simple for the people who are served by poor rail and road infrastructure to board the
flights. It can be seen that if company considers latest technology then it can be simple to achieve
growth and it will also help in managing the overall activities of the company. With latest
technology it can be easy to offer unique services to the customers which will help in enhancing
the overall image of the company in the market. By considering the latest technology the sale of
the company can also be enhanced as customers who are not educated can easily book their
tickets or can avail the services offered by the company in the market (bt Khalifah, Bing &
Hashim, 2014).
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Strategic management and leadership
So, if company considers latest and updated technology then it can be easy to achieve success in
the market and also it will enhance the customer satisfaction towards the services which are
offered by the company. Also, it will help in enhancing the market share which will directly
impact the overall profits of the company.
Conclusion
So, by analyzing the report it has been concluded that AirAsia is considered as one of the
largest airline in the market. There are various reasons behind the success of the company. The
strategies considered by the company are many like Smart fuel cost saving technique, mixed
model, online marketing and many discussed in the paper. So, it is important for the company
to maintain these strategies so that growth can be attained in the competitive market.
Also one of the reasons that can affect the growth of the company is related to high
competition level in the market. It is important for the company to offer good salary to the
employees so that they can give their best towards the entire activities of the company. So, all
the factors should be considered as it can help to maintain goodwill in the market.
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