Air asia in vietnam tp021569
•
3 j'aime•3,695 vues
Introduction to AirAsia Analysis of External Environment (PEST Analysis) Opportunities of AirAsia in Vietnam Airline Market Threats faced by AirAsia in Vietnam Airline Market Analysis of Internal Environment (Strengths & Weaknesses) Generating Strategies with TOWS Matrix for AirAsia Entry Strategies for AirAsia in Vietnam Marketing Strategies for AirAsia in Vietnam Conclusion
Recommandé
Recommandé
Contenu connexe
Tendances
Tendances (20)
En vedette
Similaire à Air asia in vietnam tp021569
Similaire à Air asia in vietnam tp021569 (20)
Plus de Jessica Allison
Plus de Jessica Allison (20)
Dernier
Dernier (20)
Air asia in vietnam tp021569
- 1. AirAsia in Vietnam Prepared by: Chan Chee Mang TP021569 UC3F1201 IBM BM026-3-3 INTSM (International Strategic Management) Lecturer: Mr. Halmi Bin Yusoff Asia Pacific University (A.P.U) BM026-3-3 1 INTSM 10/29/2012
- 2. Contents Introduction to AirAsia Analysis of External Environment (PEST Analysis) Opportunities of AirAsia in Vietnam Airline Market Threats faced by AirAsia in Vietnam Airline Market Analysis of Internal Environment (Strengths & Weaknesses) Generating Strategies with TOWS Matrix for AirAsia Entry Strategies for AirAsia in Vietnam Marketing Strategies for AirAsia in Vietnam 2 Asia Pacific University (A.P.U) BM026-3-3 Conclusion 10/29/2012 INTSM
- 3. Introduction to AirAsia Founded by DRB-Hicom in 1993, operation started in 1996 Time Warner bought over the heavily indebted airline in 2001, and latter re-executive by Tony Fernandes‟ corporation- Tune Air Sdn Bhd with 1 Ringgit Malaysia Tony Fernandes turned the company to produce LOW-COST flight services in 2002 by launching new routes in Malaysia Low-Cost Carrier (LCC) of AirAsia operation had become impactful in the flight service industry with the promotional fares Asia Pacific University (A.P.U) BM026-3-3 3 INTSM 10/29/2012
- 4. The Current became the first and most successful Low-Fare airline with more than 75 destinations in Asia the associate companies-AirAsiaX, Thai AirAsia, Indonesia AirAsia, Philippines‟ AirAsia Inc and AirAsia Japan the main competitive advantage of AirAsia is AirAsia.com Asia Pacific University (A.P.U) BM026-3-3 4 INTSM 10/29/2012
- 5. AirAsia‟s Vision & Mission Vision - to be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares Mission - (1) To be the best company to work for whereby employees are treated as part of a big family, (2) Create a globally recognized ASEAN brand, (3)To attain the lowest cost so that everyone can fly with AirAsia, and (4)Maintain the highest quality product, embracing technology Asia Pacific University (A.P.U) BM026-3-3 to reduce cost and enhance service levels 5 INTSM 10/29/2012
- 6. AirAsia‟s Value & Key Strategies AirAsia’s Values Safety First (Partnering with the world‟s most renowned maintenance providers and complying with the with world airline operations.) High Aircraft Utilisation (Implementing the regions fastest turn around time at only 25 minutes, assuring lower costs and higher productivity.) Low Fare, No Frills (Providing guests with the choice of customizing services without compromising on quality and services.) Streamline Operations (Making sure that processes are as simple as possible.) Lean Distribution System (Offering a wide and innovative range of distribution channels to make booking and travelling easier.) Point-to-Point Network (Applying the point-to-point network keeps operations simple and costs low.) Asia Pacific University (A.P.U) BM026-3-3 6 INTSM 10/29/2012
- 7. Analysis of External Environment – Political Situation in Vietnam Airline Industry Vietnam‟s Government Policies-Operated under Communist Regime for years In fact, Vietnam welcomes foreign direct investment (FDI) and enhancing trade relations “Doi Moi” which means economic renovation The Communist Party of Vietnam remains committed to market- oriented reforms and do not expect major shifts in policy direction over the next 5 years. The ruling communist party‟s authority is often intimidated by the corruption among government bureaucrats. Asia Pacific University (A.P.U) BM026-3-3 7 Vietnam's human rights record is gradually improving. Government INTSM 10/29/2012
- 8. Analysis of External Environment – Economic Condition in Vietnam Airline Industry Vietnam is the world‟s 22nd fastest growing economy with GDP growth estimated to reach 6.3% in 2013 and 6.5% in 2014 (Thanh Nien News, 2012). Urbanization in Vietnam has been accelerating recently, with a UN projection suggests that the urban population will exceed the rural population by 2040 (The World Bank in Vietnam, 2011). Economic lift has brought many people out of poverty in Vietnam, with poverty rate falling from 37.4% in 1998 to 14.5% in 2008Pacific University (A.P.U) BM026-3-3 Asia (The World Bank, 2012). 8 INTSM 10/29/2012
- 9. Cont. Vietnam's growth over the medium term depends on whether it becomes a truly multi-sector economy in which private businesses are able to grow and compete in an undistorted environment with the same freedoms as state enterprises. In 2007, FDI inflows exceeded government's expectations and credit growth rose by approximately 50%. However, forecasts for growth are being scaled down in light of rising inflation and other signs the Vietnamese economy is overheating. Asia Pacific University (A.P.U) BM026-3-3 9 INTSM 10/29/2012
- 10. Analysis of External Environment – Social-Cultural in Vietnam Airline Industry Annual population growth rate from year 1999-2009 is 1.2%, with total population as of year 2009 is 85.85 million. Gap widens between rich and poor with growth of income inequality since 2002 and availability of large and trained workforce at low cost. Asia Pacific University (A.P.U) BM026-3-3 10 INTSM 10/29/2012
- 11. The 5D model – Hofstede Power Distance – 70% which means that people accept a hierarchical order in which everybody has a place and which needs no further justification Individualism – 20% Vietnamese is Collectivist society means belong to „in groups‟ that take care of them in exchange for loyalty. This is manifest in a close long-term commitment to the “member” group, be that a family, extended family or extended relationships. Loyalty in a collectivist culture is paramount and overrides most other societal rules and regulations. Femininity – 40% on the dimension means that the dominant values in society are caring for others and quality of life. A feminine 11 Asia Pacific University (A.P.U) BM026-3-3 10/29/2012 INTSM society is one where quality of life is the sign of success and
- 12. Cont. Uncertainty Avoidance (UAI) – 30% Low UAI societies maintain a more relaxed attitude in which practice counts more than principles and deviance from the norm is more easily tolerated. Vietnamese believe there should be no more rules than are necessary and if they are ambiguous or do not work they should be abandoned or changed. Long-term Orientation – 80% Societies with a long-term orientation show an ability to adapt traditions to a modern context that is pragmatism, a strong propensity to save and invest thriftiness, perseverance in achieving results and an Asia Pacific University (A.P.U) BM026-3-3 12 10/29/2012 overriding concern for respecting the demands of Virtue. INTSM
- 13. Analysis of External Environment – Technology & Infrastructure in Vietnam Airline Industry Vietnam is aiming to accomplish its development plan for the aviation sector by 2020 including further expansion for aircraft fleet, building and upgrading airports, and developing better airport operations and air traffic management by 2014, Vietnam will become the world‟s third fastest-growing market for international passengers and freight, and the second- fastest in the number of domestic passengers The World Economic Forum‟s 2010 Global Enabling Trade Report rated Vietnam 103 out of 125 countries for availability and quality of transport infrastructure. The government has also implemented a 3-year discount scheme in April 2010University (A.P.U)charges relief to airlines at Vietnam‟s major 13 Asia Pacific to provide BM026-3-3 10/29/2012 INTSM airports.
- 14. Strengths Weaknesses Generating Exploitation and Accesses to Latest Technology Over-Relying on Online Sales Limited Customer Service Low-Costs Business Model Too Dependent on Outsourcing Strategies using Single Aircraft Type which gives Lower Turnaround Time Strong Management Team Established Brand and Reputation TOWS Matrix Opportunities Strengths – Opportunities Strategies Weaknesses – Opportunities Strategies Rise in the Middle Class Population Promoting low costs and lower turnaround time to Improve quality and service level Strong domestic growth rate attract the growing domestic market with development plan in aviation Increase in fuel prices eliminate unprofitable Utilise strong branding and marketing to target the rise sector competitors in the middle income class and growth in leisure travel Limited service reduces costs by Growth in leisure travel in Vietnam targeting increment in fuel prices Development plan in aviation sector Making full use of exploitation towards internet which leads to higher fares Availability of large and trained workforce at low cost technology with development plan in aviation sector Availability of huge amount of Exploitation of internet technology simplifies processes skilled workforce reduces much for tourists training needed for handling online sales Threats Strengths – Threats Weaknesses – Threats Strategies Strategies Aviation Rules and Government Policies Utilise strong branding and marketing which targets the o Modernize Navitaire with tragedy Macroeconomic Instabilities aviation rules and government policies in Vietnam recovery targeting heavy reliance on Asia Pacific University (A.P.U) BM026-3-3 cost, lower turnaround time and strong Promoting low online sales and macroeconomic 14 INTSM branding in order to cope with the macroeconomic instabilities 10/29/2012 instabilities
- 15. AirAsia‟s Entry Strategies in Vietnam Aviation Market it is more viable for AirAsia to enter Vietnam market using joint venture as entry mode in aviation sector because the country forbids 100% of foreign ownership. Besides that, domestic flights in Vietnam are still guarded by the country‟s law prohibiting foreign airlines from entering to protect the local airlines. Joint venture with a local brand (VietJet, 2010) in Vietnam would benefit AirAsia as Asia‟s low cost leader and largest LCC to be able to expand its operations further in the country, obtaining stronger position among competitors, increase intra-regional connectivity, and as another opportunity in backing up the ASEAN region as tourism hub. Asia Pacific University (A.P.U) BM026-3-3 15 INTSM 10/29/2012 Moreover, the joint venture will also contribute to the diversification
- 16. Marketing Strategies Maximized IT and implementing E-commerce in AirAsia business - AirAsia implemented current IT such as yield management system (YMS), computer reservation system (CRS), and enterprise resource planning (ERP) system Generate new Product Package Strategy - enhance on its Do-It-Yourself (DIY) package promotion by “Go Holiday” theme for travellers Asia Pacific University (A.P.U) BM026-3-3 16 INTSM 10/29/2012
- 17. Conclusion To compete with their competitor in the Vietnamese business environment, AirAsia needs to make a strategy to achieve their long terms objective and can be successful for doing their business. The strategic management becomes important due to the following reason such as globalisation to survival their business, and then e- commerce become the critical success to the company nowadays. 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. How AirAsia can solve the current issues to be a low cost carrier leader in airplane industry? The first is to identify and analyse the different strategic analysis, and then to solve the current issues with some strategies such as Joint Venture Entry Strategy, Product PackagePacific UniversityMaximized IT and implementing E-commerce in Asia Strategy, (A.P.U) BM026-3-3 10/29/2012 17 AirAsia business, Operation effectiveness and outstanding efficiency, INTSM
Notes de l'éditeur
- Introduction to AirAsiaAirAsia was established in the year 1993 and starting its operation in 1996, founded by DRB-Hicom, a government-owned conglomerateTime Warner bought over the heavily indebted airline in 2001and latter re-executive by Tony Fernandes’ corporation- Tune Air SdnBhd with 1 Ringgit Malaysia which is USD 0.26 at that timeTony Fernandes taken his role in turning the company and started to produce the flight service profits in 2002 by launching new routes in Malaysian states from its hub in Kuala LumpurLow-Cost Carrier (LCC) of AirAsia operation had become impactful in the flight service industry with the promotional fares undercutting the former monopoly operator which is Malaysian Airlinesexpanded the flight business internationally and became the first and most successful Low-Fare airline with more than 75 destinations in Asia including Thailand, Indonesia, Philippines, Japan, Australia, India and ChinaThe spans of route network is the result the leading airline continues to pave the way for low-cost aviation through innovative solutions, efficient processes and passionate approach along with tourism business line together with the associate companies-AirAsiaX (Focusing on the low-cost, long-haul segment), Thai AirAsia, Indonesia AirAsia, Philippines’ AirAsia Inc and AirAsia Japan believing in “Now Everyone Can Fly” (AirAsia, 2010). As we can see, rhe main competitive advantage of AirAsia is AirAsia.com, using the Internet Infrastructure which is E-Commerce strategy (online transaction) effectively with no boundaries across the nation and works internationally, striking with the globalisation trendAirAsia Vision & MissionThe aviation industry in Vietnam currently is relatively small. However, as year passes, it is growing rapidly due to the trend in globalisation. With this reason, AirAsia will stand out in Vietnam because its low fare offers as there are not many competitors. Also, the government of Vietnam is taking part in privatising large state organisations incorporating Vietnam’s main airline as one of the step for opening up to foreign direct investment (FDI).
- AirAsia’s ValuesKey StrategiesSafety First (Partnering with the world’s most renowned maintenance providers and complying with the with world airline operations.)The single most important criterion in an area that AirAsia will never compromise on. AirAsia had complied with the conditions set by regulators in all the countries where the airline operates. Others than that, AirAsia had also partners with the world’s most renowned maintenance providers to ensure that theirs fleet is always in the best condition. The power of supplier is high due to the airplane manufacturers only Boeing and Airbus. In addition, the switching cost for the Boeing and Airbus is pretty low because it can sell same standards to another airline. However, to make up an airplane needs high technique and specialist so it is rarely possible for AirAsia to extend and integrate their operation into supplier part. High Aircraft Utilisation (Implementing the regions fastest turn around time at only 25 minutes, assuring lower costs and higher productivity.)In relates with this term, AirAsia’s high frequency flights have made it more convenient for guests to travel. AirAsia as the fastest in the region, had implements as a quick turnaround of 25 minutes.T his has resulted for AirAsia in high aircraft utilisation, lower costs and greater airline and staff productivity, whilst enable them to gain more profits through removed frills service and removed chair booking and extensive crew drilling on performing quick turnaround. AirAsia had replaced their aging Boeing B737 aircraft with the Airbus A320 aircraft in Thailand and Indonesia. This was led to an all Airbus fleet provides them with an opportunity to stamp their dominance as the ASEAN airline throughout the AirAsia Group by the end of 2010. In addition, with also their unmatched network connectivity, frequency and full-fledged Airbus operation along with their low cost operations and low-fare model, so AirAsia will enjoy a substantial edge over competitors around them. Low Fare, No Frills (Providing guests with the choice of customizing services without compromising on quality and services.)AirAsia targets guests who are prepared to do away with frills such as meals, frequent flyer miles or airport lounges in exchange for fares lower than those currently offered without comprising on quality and service. For example, the guests of AirAsia have the choice of buying exclusively prepared meals, snacks and drinks from their in-flight service at an affordable price. AirAsia put emphasis on lowering all avoidable costs to sustain low fares and remain profitable, even on low yields. What AirAsia do is cut the cost of operating the flights on their chosen routes by flying to and from airports that offer cheaper take-off and landing fees. Besides, AirAsia end free meals and drinks during flights as travellers do not expect excellent service. Also, AirAsia does not allocate specific seats to passengers and there is only one class. Streamline Operations (Making sure that processes are as simple as possible.)One of the key for AirAsia’s success was made by the process as simple as possible. AirAsia was worked towards a single aircraft fleet, this actually greatly reduced duplicating manpower requirements as well as stocking of maintenance parts. The area is vast, the cultures diverse, the economies vibrant and the travel links – well, that’s where AirAsia spotted the opportunity. Some are innovative ideas inspired by the talented people of AirAsia and some are simple but functional moves that came from other sources. Lean Distribution System (Offering a wide and innovative range of distribution channels to make booking and travelling easier.) AirAsia offers a wide and innovative range of distribution channels to make booking and travelling easier for its guests. AirAsia’s ticket-less service provides a low cost alternative to their overall guest in issued printed tickets.Point-to-Point Network (Applying the point-to-point network keeps operations simple and costs low.) The LCC model adopts the simple point-to-point network. In AirAsia, their flights are short haul (four-hour flight radius or less), whilst their sister airline AirAsia X focuses more on the medium to long haul flights (more than four-hour flight radius). The underlying business is to fly a person from point A to B.
- Analysis of External Environment PoliticalFor years, Vietnam’s government policies have been operating under a communist regime, in actual fact, Vietnam truly welcomes foreign direct investment (FDI) and enhancing trade relations (Thompson G., 2009). “DoiMoi” which means economic renovation is established by Vietnam in the year 1986 aiming to open up the country to foreign investment. The Communist Party of Vietnam remains committed to market-oriented reforms and they do not expect major shifts in policy direction over the next five years. The one-party system implemented in Vietnam is usually contributing to short-term political stability (Business Monitor International, 2011). The ruling communist party’s authority is often intimidated by the corruption among government bureaucratsVietnam's human rights record is gradually improving. Government monitoring and control of all facets of the political, social, economic, and religious lives of the people is reducing in some areas but is still intrusive and at times erratic.
- EconomyVietnam is the world’s 22nd fastest growing economy with GDP growth estimated to reach 6.3% in 2013 and 6.5% in 2014 (ThanhNien News, 2012). Urbanization in Vietnam has been accelerating recently, with a UN projection suggests that the urban population will exceed the rural population by 2040 (The World Bank in Vietnam, 2011). Economic lift has brought many people out of poverty in Vietnam, with poverty rate falling from 37.4% in 1998 to 14.5% in 2008 (The World Bank, 2012).Vietnam's growth over the medium term depends on whether it becomes a truly multi-sector economy in which private businesses are able to grow and compete in an undistorted environment with the same freedoms as state enterprises. In 2007, FDI inflows exceeded government's expectations and credit growth rose by approximately 50 percent. However, forecasts for growth are being scaled down in light of rising inflation and other signs the Vietnamese economy is overheating.
- Social CulturalAnnual population growth rate from year 1999-2009 is 1.2%, with total population as of year 2009 is 85.85 million. Gap widens between rich and poor with growth of income inequality since 2002 (KTSG, dtinews, 2012) and availability of large and trained workforce at low cost.
- Technology & Infrastructure Vietnam is aiming to accomplish its development plan for the aviation sector by 2020 including further expansion for aircraft fleet, building and upgrading airports, and developing better airport operations and air traffic management (Moye E., 2012). According to the International Air Transport Association (IATA), by 2014, Vietnam will become the world’s third fastest-growing market for international passengers and freight, and the second-fastest in the number of domestic passengers (Moye E., 2012). The World Economic Forum’s 2010 Global Enabling Trade Report rated Vietnam 103 out of 125 countries for availability and quality of transport infrastructure (Australian Government, 2012). The government has also implemented a 3-year discount scheme in April 2010 to provide charges relief to airlines at Vietnam’s major airports (IATA, 2011). Now, Vietnam has a world class air navigation service provider (IATA, 2011).
- AirAsia can take the opportunity on promoting its low-costs flight services and less turnaround time with Vietnam’s rapid growth in the aviation market as there are not many low cost carriers rivals yet in Asian market. For its domestic flights - travelling from one place to another for a short distance or period of time, travellers would often consider more on costs and convenience. AirAsia’s low cost concept with no frills where travellers flying at a short distance normally only require several traditional passenger services and low turnaround time where there are more flight options is a competitive advantage. Comparing to road and sea transportation, flights saves more travelling time too (AirAsia, 2010).In addition, AirAsia’s low cost leadership strategy as sustainable competitive advantage could capture the growing middle income class population which drives demand for low cost flights and leisure travel in Vietnam as well through their strong branding and marketing. As air transportation is the main transportation mode for leisure travel to Vietnam, AirAsia could use its exploitation in internet technology to target the market as well. Travellers get to make reservation for flights and hotels or even for car rentals to make travelling easier and hassle free. It improves convenience and reduces costs and time. In the aviation sector, “Trust” is a key factor made by AirAsia in making travellers dealing with the airline’s website to feel more secure as they would not have to worry about frauds by agents. Hotels and car rentals reservation online makes things easier for first time travellers to Vietnam as well as they might not be used to the environment yet. Furthermore, with Vietnam’s move towards ASEAN open skies and development plan for its aviation sector, AirAsia will be able to fully exploit its usage on internet technology as well as reducing costs in terms of its technological equipments. In addition, development plan in aviation sector will also increase the quality and services of the airline to be more efficient such as handling bookings and online sales (AirAsia, 2008). Also, with the high availability of huge amount of skilled staffs in Vietnam would enable AirAsia, meaning efficient and motivated workforce helps reduces training time and learning curve in dealing with its technological equipments. Although there are limited services provided by AirAsia due to promoting low cost, but the airline will gain advantage by targeting the increment in fuel prices. Increase in fuel prices tends to eliminate unprofitable competitors, and airlines often raise fares and flying with smaller planes as fuel is often the major cost for airlines. But not AirAsia whom most concern is on sustaining lowest operating costs. For instance, although Vietnam’s aviation rules and government policies restrict using foreign airline brands to protect local airlines, AirAsia could still penetrate the local market with its brand by using an indirect approach by sharing the news of joint venture with a local airline through print media advertising and news. It might be a challenge to penetrate the market with a local brand, but with the travellers’ awareness of the joint venture and the airline’s strong brand and trust built among travellers; it would not be seen as a setback. AirAsia as Manchester United football team’s major sponsor, the airline could spread the news even further beyond the region through the international sponsorship and advertising. AirAsia’s nomination for four years running as Skytrax World’s Best Low Cost Airline would also make the airline the primary choice for air transportation. Subsequently, if Vietnam were to experience macroeconomic instabilities in the future such as inflation and corruption, it would be wise for AirAsia to promote its low costs philosophy, low turnaround time and strong branding as people would go after low cost targeting limited services with no additional charges but safe flights. Inflation reduces the country’s purchasing power meaning people tend to spend lesser and save more. AirAsia’s low cost philosophy will be suitable for the rising inflation and having low turnaround time as an additional advantage to save time. AirAsia could prevail over the issue of corruption in the country where there’s reduction in air travel using its strong branding. AirAsia would be travellers’ prior choice of air transportation as the airline has built trust and confidence among travellers for a safe flight. When AirAsia is highly dependent on its online sales so the airline cannot afford to have the website down because of maintenance or busy traffic. By setting up tragedy recovery using Navitaire, a direct sales engine service provider, would improve the efficiency of the website in finding solutions and fixing them. Although offering travellers free 15kg baggage allowance for the ones travelling four hours and above would be opposing with the airline’s no frills policy, but long term wise would build customer loyalty and retention.
- Entry StrategiesBased on the analysis done, it is more viable for AirAsia to enter Vietnam market using joint venture as entry mode in aviation sector because the country forbids 100% of foreign ownership. Besides that, domestic flights in Vietnam are still guarded by the country’s law prohibiting foreign airlines from entering to protect the local airlines. In 2010, AirAsia officially announced that the airline has successfully bought 30% shares of Vietjet Air. Vietjet Air was given the authority to start its operation in 2007 but had been influence by the world economic crisis in the next years to defer their plan numerous times.Joint venture with a local brand in Vietnam would benefit AirAsia as Asia’s low cost leader and largest LCC to be able to expand its operations further in the country, obtaining stronger position among competitors, increase intra-regional connectivity, and as another opportunity in backing up the ASEAN region as tourism hub. Moreover, the joint venture will also contribute to the diversification and needs of air travel in the country and region by offering additional options. By using the competitive advantage of both airlines AirAsia and Vietjet Air would also promote a more efficient operation and LCC marketing due to the ideal combination in terms of organization administration, technological equipments, experiences in airline industry, strong branding of AirAsia, and market within the reach of Vietjet Air.
- Marketing StrategiesMaximized IT and implementing E-commerce in AirAsia businessNowadays, E-commerce is becoming a business tool. E-commerce also has become a vital strategic management and allows a company to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, eliminate paperwork, and share information. In total, electronic commerce is minimizing the expense and cumbersomeness, improved products, and higher profitability. According to this statement, E-commerce can change the way of doing business nowadays. E-commerce becomes a major success to Airplane Company to make effectively and efficiency in their business especially for AirAsia expanding in ASEAN countris like Vietnam.AirAsia is one of the airplane companies, which is implementing E-commerce and maximised their information technology usage to make the efficiency and effectively in their company and make possible low cost carrier in their business. According to Pultorak (2004), when the business strategy and IT are aligned, the IT infrastructure can continuously sense the changing business needs and respond by provisioning or redeploying resources to match the demands of the business.Moreover, to maximize their IT, AirAsia implemented current IT such as yield management system (YMS), computer reservation system (CRS), and enterprise resource planning (ERP) system. Lets we discuss the current IT that AirAsia implemented one by one.Yield management system as revenue management system it understands, anticipates, and reacts to the behavior of customer to maximize revenues for the organization. In this system, AirAsia used it to takes into account the operating costs and aids AirAsia to optimises price and allocate capacity to maximize expected revenues.Generate new Product Package StrategyAirAsia would be targeting overall middle class population by positioning itself as a low cost yet quality carrier. The airline itself is the ideal product to draw and convince customers of their basic needs eyeing on product coverage. Hence, various explorations had been done to discover the possibilities of expansion for product coverage to complement its air offering. AirAsia could enhance on its Do-It-Yourself (DIY) package promotion by “Go Holiday” theme for travellers, introducing travel package including of flight tickets, hotels, and holiday portal at a valuable price as an online service. It offers travellers hassle-free, affordability and flexibility as the growing middle class population in Vietnam’s concern is mainly on convenience and budgeted products. Vietnam’s in-home internet has been increased by over 1000% from 1999 to 2008 (See Appendix 7) and mobile phone ownership increased by 33% in 2 years on 2008 (See Appendix 8) is a contribution to the package’s heavy reliance on internet technology (Matthaes R., 2008). Travellers are also provided with numerous options from a luxurious five star package to a budget holiday suiting individual needs. In addition, products ranging from airport transfers, tours and activities such as spas and theme parks will be marketed online (AirAsia, 2007). Travellers could conveniently reserve air tickets and hotels at one stop equip with multi languages to choose from and benefit from having a more attractive rate. With this package, the airline would be able to convert itself from an ordinary flight centric into a travel dealer which is a better positioning for the airline competing with channels comprising both online and offline. According to the survey done by TNS in 2007, 88% Vietnamese said they are ready to pay a higher price for healthier foods proving that they are becoming more health conscious. With AirAsia’s unique online health package, Go Medic would be able to cater to the growth in health tourism (AirAsia, 2007). Currently, Go Medic has formed a partnership with three diagnostic centres with potentially more hospitals and diagnostic centres to be added to the service (AirAsia, 2007).
- ConclusionThe competition among airplane industries is very tough. Each of Airplanes Company in the world trying to conduct some strategies to compete with another competitor in their industry. To compete with their competitor in the Vietnamese business environment, a company needs to make a strategy to achieve their long terms objective and can be successful for doing their business. The strategic management becomes important due to the following reason such as globalisation to survival their business, and than e-commerce become the critical success to the company nowadays. 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.How AirAsia can be a leader in the lowest cost carrier in the airplane industry? To be a leader in the low cost carrier, firstly, AirAsia need to consider about their strategic management. The reason why need to consider strategic management because the first reason is because the airline industry is a unique and complex industry. The second reason, the strategy that AirAsia need is not just how to reduce cost and make the operational activities running effectively. But, AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully, the third reason because a globalisation and implementing E-commerce.The current issues in AirAsia Company are more focused in the competition of the cost among an airplane industry. AirAsia as an industry company which is more focusing in the low cost carrier airplane industry need to consider to make the lowest possible cost to compete with the other competitors in their airplane industry in Vietnam market.How AirAsia can solve the current issues to be a low cost carrier leader in airplane industry? The first is to identify and analyse the different strategic analysis, and than to solve the current issues with some strategies such as Joint Venture Entry Strategy, Product Package Strategy, Maximized IT and implementing E-commerce in AirAsia business, Operation effectiveness and outstanding efficiency, and the last one is implemented outsourcing in the AirAsia business in Vietnam.