Airasia Xs Business Environment Tourism Essay

Airasia Xs Business Environment Tourism EssayX targeted the less spendable income travelers who overlooked by traditional airlines flat by somewhatwhat mild comprise carriers. The poor legal injury of shred and abundant of destination net income provided travelers more opportunities to fly. Moreover, X explored the new technology to reduce transaction cost for travelers the cell phone gross revenue of ticket. As Asias economic grew, people from Asia gather in higher spending power and they will select air merchant vessels to travel more frequent than before. X should cater to a broader passengers particle across distinct needs categories. Back to a short sequence after the inception of X, the Malaysia Transport Ministry even refused to release the air passage from Kuala Lumpur to Sydney for X in order to protect Malaysia air lanes which is the national airline. Afterward, X on the watch for IPO but did not want to be list on the KLSE. Due to worry about the Malays ia government could slow down some of Xs expansion and continue to refuse some routes application. X put away the IPO till the end of 2011 and early of 2012.AirAsia Xs industry environmentAlthough the unveiling barrier of airline industry is high such as huge capital requirement and governmental legal barriers, low cost wide sweep up carriers are suffering strong competition. On one hand, almost of low cost large haulage carriers are launched by their put forward company. For example, X is a sister company of AirAsia, Scoot Airline is a subsidiary of capital of Singapore Airline. They can enter the industry because of the background of their conjure up company. On the other hand, the cost of aircraft, fuel and airport is the majority disbursal in airline company, the high bargain power of suppliers gave a good deal storm to them.Train and ship are the substitutes of airline, but they are hardly to attain place of low cost recollective haul airline. Even though the pri ce is more expensive than bus and ship, low cost long haul carriers provide variable, efficient and convenient transport service. Some eons, low terror of substitutes indicates high competition in the industry. In Southeast Asia market, Jetstar from Australia and Scoot from Singapore are the main competitors of X. Jetstar is the earliest company to operated low cost copy of them, it has much experience about low cost control. It has huge flicker and good quality service. Its fatal weakness is the highest ticket price provided among the trio companies. Scoot is a new low cost long haul carrier in 2012. It has narrow route network and higher price than X. However, it has absolute cost advantages in route from Singapore to Australia currently. Compared to them, X has the last-place median(a) ticket price and the largest passenger load.AirAsia Xs StrategyX successfully integrated low cost model in e rattling organizational activities. It sharply griped the true needs of lower disp osable income nodes to attract new customer segments and created shelter to customers around low cost.Primary activitiesActivities rendering inbound logisticsAlthough X formally separated from AirAsia, they still jointly purchase central imaginativenesss such as aircraft and fuel. It will strengthen their bargaining power towards suppliers. X reduced costly investment in terminal or non-airplane tie in infra expression help to decrease the cost of relief valve for passengers. Meanwhile, X pays much attention to flight safety. It has a high prototype aircraft maintenance team. proceedingsDifferent from full service airlines, X should maximize its load in each flight to reach the break-even point because of the low enough price. Moreover, X arranges high efficient flight scheduling to increase the profit.Outbound logisticsX is an airline company and responsible to long haul transportation. There is no more outbound logistics except the low cost long haul transportation.Marketin g and salesIn order to attract new customer segments, X was differentiated around low cost and building he planetary brand. To reduce cost, X utilized hundred per cent online sales before. To make further efforts, X was exploring the cell phone sales of ticket. In spite of the extra cost, X set sales point in at each airport and operated call centers throughout the world. X in addition had agreements with travel agencies.ServiceX made effort to keep the betrothal process and pricing model simple. The ticket price listed online including ticket fees and link to tax charge. It is transparent to customers. X never charged any online, call or personal booking fees. In late of 2010, X launched massive program to review more benefit to loyal customers.Support activitiesActivitiesDescriptionInfrastructureX used flat organization structure in the company. The structure helped X to reduce the cost of administration and develop the force among the employees.One of the most important activities is preparing for global IPO. This move is the foundation for Xs global expansion.Human resource focusing low-down cost gentle resource of X absolutely has benefits from the low labor cost of Malaysia. Furthermore, X and AirAsia accomplished their own training academy for new pi dispenses, engineer and cabin crews. It protected a lot of money for X again.Technology usingX explored cell phone sales of ticket to make up 100 per cent online sales. It provided more convenient to customers in booking system.ProcurementX searched the lowest price with acceptable quality of merchandise or procured with AirAsia to sire more price advantage.In the tax chain of AirAsia X, e real natural process is around low cost to create value to customers. Some moves in value chain decide the AirAsia Xs cost per rear mile (US$0.02 per seat mile) less than one quarter of the cost of the average budget US s low budget airlines (US$0.09 per seat mile).From the inception of X, it operated as a simple organization structure. X used minimum staffs to complete flight tasks in safety and efficiency. Additionally, the cost of human resource saved a large sum of money for AirAsia X. Labor costs in Malaysia and the absence of unionization helped keep costs low. As wright said, passengers prefer to get polish off airplane directly onto the airport tarmac instead of added cost to the ticket price. To reduce costly investment in terminal or non-airplane related infrastructure help to decrease the cost of flight for passengers. It satisfied the touchable needs of Xs target market.Appraisal the strategies of AirAsia XSustaining training cannot be created by operating business in external environment with high hazard and low threat. It must(prenominal) depend on resource and capabilities and utilizes them to implement strategies in industry competition. In order to figure out these resource and capableness, management must find out resource of value, rareness, imitability and non-substitute from internal environment.In the low gear of AirAsia X, it almost shared all resources from AirAsia to ensure the successful launch. As formally separated AirAsia X from AirAsia in 2010, AirAsia X already had its own value resources such as some suppliers. It provided infrastructure to administrate strategy and develop. Low cost control system but high safety aircraft and standard maintenance is the most valuable resource in AirAsia X.The flight time in AirAsia X changed from day to day is a very different schedule in airline industry. The purpose is to satisfy to break even through arrange aircrafts in the air as long as possible because the ticket price was too low.Low cost human resource in Malaysia is a kind of imperfectly imitable resources. Scoot Airline from Singapore and Jetstar Airline from Australia have no this resource. Low cost philosophical system also is important imperfectly imitable resource. AirAsia X can achieve very low cost per seat mile as US$0 .02 when the average budget airlines cost per seat mile is US$0.09. This is mission unaccepted to AirAsia Xs competitors.As an airline company, aircraft manufacturer is one of the bone marrow suppliers. Aircraft selection is very important to airline company it must consider the size of aircraft depended on fly distance and maintenance cost. AirAsia X utilizes single type of aircraft to simplify maintenance, reduce staff training needs and gain better get term in negotiation.ConclusionIntegrated above Porters five forces analysis, value chain analysis and VRIN analysis, the current competitive advantage in AirAsia X is cost leadership. Because of low enough price, AirAsia X can grip opportunity to succeed when other low cost carriers failed. Meanwhile, the competitive advantage offsets some weaknesses such as less diversification of service and differentiation from competitors. With the development of AirAsia X, some current strengths maybe transfer to weaknesses. These will inf luence sustaining development of AirAsia X. Therefore, AirAsia X should build sustaining competitive advantages in the future.Sustaining competitive advantagesDescription bell leadershipLow cost philosophy must practices as the core competency throughout AirAsia X.Low scattering costCurrently, low distribution cost is still strength in AirAsia X, but it is heavily relied on online sales. Once information system interruption, AirAsia X will suffer weighted loss, besides, online sales are an easy kind of resource imitated by competitors. Thus, AirAsia X should explore new low cost distribution.High aircraft utilization and operationAirAsia X is good at safe and efficient flight schedule. It balances low ticket price and company revenue. This capability is sustainable and imperfectly imitable.apartment organization structureThis capability helped AirAsia X to save a lot of money. However, it is short-term competitive advantage. As AirAsia X expands, flat organization structure will i nfluence the quality of decision making. AirAsia X should asseverate this capability to as sustainable competitive advantage. dependable branding and marketingStrong branding and marketing is one of important capability to against competitors expansion. AirAsia X must build its strong branding and marketing.As the completion of budget long haul airlines become sharp day by day. AirAsia X should maintain the capabilities which are easy imitated such as distribution channel or short-term competitive advantages such as flat organization structure.