Strategic Management and Leadership of AirAsia Paper Example

Introduction

AirAsia is one of the Malaysian low-cost airlines which is located and has its headquarters in Kuala Lumpur in Malaysia. It is placed to be the largest airline in Asia based on the fleet size and the destination that it covers. It operates several scheduled and domestic and was initially owned by the Malaysian government before it was taken over by Tony Fernandez. Some of the major challenges that are faced with AirAsia includes, fierce competition from other airline operating industries, the rising and fluctuating cost fuel to economic instability which has led streamlining of various operation of the airline so as to sustain the value chain.

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Measurement of success of the AirAsia

Definition of success

The success of the AirAsia company is defined in terms of the achievements of the perfect economic scales as well as the lucrative assets and the powerful capability of the company to perform its operations and business activities. The company is therefore considered to have achieved its success because it is stable financially and non financially. Business success can, therefore, be described as the contributions of the progressive achievements of good economic scales, the powerful capability of the company and the lucrative assets that are owned by the business premises.

The AirAsia balanced scorecard

The balanced scorecard was applied in AirAsia airline company to measure its success from several perspectives so as to well-balanced view. The aspects of the balanced scorecard included the:

• The financial perspective of the company
• Customer perspective in relation to the services that are offered by the company
• The internal businesses premises
• Learning and growth of the company and its operations.

Market share of AirAsia Airline Company

Even due to the rising and increasing competition within the airline company, the market share of the company has been rising rapidly because of its operational principles. It considered to be the low-cost airline with Malaysia and at the same time offer better service compared to other available airlines. AirAsia has significantly increased its market share as seen in the Malaysia airline analysis which illustrates that the company market has risen over the past few years and therefore benefiting from the capacity reduction from its competitors. The company domestic traffic has therefore increased with over 18% as compared to other airlines such as Malaysia airline that has decreased with over 28% and this is an achievement within the .market share of the company.

The reasons for the success of the AirAsia airline company

There are several reasons which have led to the success of the company and this includes:

Competitive advantage

Competitive advantage can be described as the attributes that generally allows the company to outperform in comparison to its competitors. The company aim and objective to place itself as a low-cost career within Malaysian airline industry by valuing its clients through cost-effectiveness really created a very conducive environment for competition and operational efficiencies. Many more customers are therefore at a position to fly due to the reduced cost as the AirAsia airline works hard to get to the customers who were not at a position to air travel cost due to lack of enough money.

Low cost of operation

This has come out as one of the main competitive advantages that has seen the success and the rising of the company to become one of the largest airline operating companies in the world. Considered as one of the low-cost airline careers in the world, the AirAsia has attracted a lot of customers due to its cost-effective operation which has led to the expansion of the industry due to the waning demand of its client and this has contributed to its successful nature.

Correct market positioning and targeting

The AirAsia has one of the most effective market positioning and the end target. This is observed by its ability to manage the low-income earners within the society and its distributed destination throughout the world. Achievement of this has increased its market share both locally and internationally thus contributing to better income and net profit.

Effective leadership

Tony Fernandez has given a very effective management and leadership skills to the company that has seen the rise and successful nature of the company. He believes that in whatever opportunity that arises, there is always going to be a problem and calamities around it but therefore is always going to be a way through. This has enabled him to come up with various invention within the market which has seen the successful nature of the airline.

Internal analysis

Value chain definition

Value chain within a business premiss is defined as a full and a wide range of activities within the organization which include such activities as, design, marketing, production and the distribution of the products and services from the conception nature to the delivery process to the final consumer. The value chain management in addition, therefore, is the process of organizing the various activities so as to analyze them in a proper way.

Primary activities

Inbound logistics

Activities Description

The landing slots and the acquisition The landing slots of the AirAsia were scarce and at the same time possess a very critical value within the airline industry. Therefore AA had to ensure that it has enough landing slots which could allow it to support its flight schedule.

Aircraft parts and furl purchasing The AirAsia company sees it wise to look into these activities in a proper management level as they consume and affect almost 30% of the overall cost which is known as the cooperate financial report.

Operations

Activities Description

Transportation of the passengers and other luggage This activity is described to be the main reason for AirAsia to enable it to gain profit. And the management of AA has made it affordable through the reduced cost and this has enabled the company to attract a great number of customers thus increasing the net profit of the airline.

Aircraft ground maintenance The company various methods of driving low the general cost of the operation of the Airline shows a great effort in suppressing the low cost which has turned out to work on the advantage of the company.

The flight scheduling of the AirAsia airline The stiff competition that arises from other airline companies within the industries pushes AA to plan its flight schedule effectively. The well-planned schedule which was created by AA enabled the company to be considered as the value of its own a brand and as time delivery air career.

Outbound logistics

The research and operation of the AirAsia show that the company only provides transport service and therefore no important outbound logistics can really be established.

Marketing and sales

Activity Description

Advertisement and promotion of the airline industry Various important and creative activities have been taken so as to popularize the company. Research indicates that the intensive advertisement and promotion of the industry has enabled it to gain more than five million customers that adopted the services offered by the AirAsia airline.

The use of the computer reservation system The computer reservation system within AirAsia can be considered to be a strategic enabler for the company to compete with other competitors. The online sales that were employed through this system captured more than about 50% of the AirAsia service (Corporate website, 2005).

Through the optimization of the system, AA has developed various tools and premises that enable making the right decision in time such as customer relationship management and the E-business (Taneja, 2002)

Services

Services Description

Call center The call center service which is applied by the AirAsia has a significant role in enabling the company to tackle various issues and concerns relating to the customer inquiry. The effective communication within any organization is one of the mutual factors that contribute to the success of the company and therefore the call center has properly enhanced the operation of the company.

Support activities within the AirAsia airline company

Support activities Description

The AirAsia firm infrastructure The infrastructure plays various significant roles such as formulating various strategies for the AA and encouraging the organization employees and management to support and implement the decision. This has contributed significantly to the performance of the company by ensuring that decisions that can support the company positively are accepted and implemented to ensure proper service delivery.

Human resource management Human resource management plays various vital roles within the AA operation which includes:

• Recruiting of skilled and labor sensitive employees to the AA which will ensure that quality services are delivered.
• Training the employees in various issues to keep them skilled and also efficient in service delivery.

Technology

This is a very significant support activity. It develops the methods and programs of operating and maintaining the AA to ensure that the objectives and the missions of the company are achieved. This includes programs that will ensure that the airline maintains its low cost of operation and thus attracting customers.

The procurement The procurement sector of AA enables the organization to search and provide the best quality products and services to the company. They work to ensure that the quality of services offered by the airline meets the required and at the same time maintain th...