QUIZ III

INDIVIDUAL ASSIGNMENT
COMPETITIVE DYNAMIC AND RIVALRY

GOOD STRATEGIES BUSINESS ON AIRASIA

Name

: Mohammad Haryo Nugroho

ID

: 1342980464

Good Strategy Business on AirAsia

Background
The first company with budget flight started on the seventies by Southwest
Airlines in America. The company is offering cheap airfares to consumers. The trend of
budget flight has been occurred in all around the world which was impacted for market
share of flag ship carriers or legacy airlines. The growth of passengers using budget
airlines is constantly inclining. In the current time, the effect of launched budget flight
created that passengers are concerning to choose budget flight for short distance such
as domestic routes and regional routes.,
When we look the growth of budget airlines in Asia is rapidly growing in which
supporting from population of Asians people. Especially in South East Asia has
witnessed explosive growth in the budget airline market since 2000. Air Asia took that
opportunity with budget flight in the region South East Asia.

History of AirAsia
Air Asia was established in 1994 and began operations on 18 November 1996. It
was founded by a government-owned conglomerate DRB-Hicom on 2 December 2001.
The company has heavily-indebted which was bought by former Time Wamer executive
Tony Fernandes. He was the founder of Tune Air Sdn Bhd for bought AirAsia only the
token sum of one ringgit (Approximately USD 0.26) Air Asia was the first successful low
cost airlines in the South East Asia Region. They has a slogan every one can fly that
built a strong image of low cost airlines of AirAsia which meaning that every people can
broad to all around the world through low cost flight.
The Kernel of Good Strategy
The theory that has been implied on AirAsia strategies is discovering power. The
best strategies that has a fresh perspective that uncovers the untapped power of the
organization. Meanwhile the source power to support good strategies are leverage,
proximate, objectives, chain-link systems, design, focus, growth, advantage, dynamics,
inertia and entropy.
The Analysis Discovering Power in AirAsia
AiraAsia is the first low cost airlines in South East Asia but in early company
established in 1994 and the operations started on November 1996 AirAsia does not
performance well. After that company has owned by Tony Fernades, he changed the
business strategy as low cost airlines.

According to the Kernel Theory, AirAsia applied good strategies on discovery

power, as follows:
A. Focus
The CEO of AirAsia Tony Fernandes has focusing in low cost airlines in Malaysia
to offer cheap flight to customers with give the options to customize for
convenience ways during customers abroad such as baggage, food and hot seat.
He wants to break the monopoly of Malaysia Airlines in 2002 after he take over
AsiaAsia. The proved that AirAsia focus as low cost airlines with best services is
the company got consecutively awards from skytrax started from 2009.
B. Growth
Airasia expressed growth since 2002 as low cost airplanes. The growth of
passengers and sales is increasing in every years. The company has been
growing to expanding their business to region South East Asia such as Thailand,
Indonesia, Singapore and Filipina. In other hand, the fleet of airplanes is also
increasing to serve a better service to customers. Moreover,

AirASia has

recorded as the airplanes with high accuracy of on-time both departure and
arrival.

C. Dynamics
In era modern as the current time, the market and customers habit are rapidly
changing. AirAsia as the company of airplanes, they can follow the current trends
of market in airplanes business with a tight competition. For example, AirAsia
provides check-in machine in boarding area that creates passengers get shortly
time to boarding time in airport because passengers just check in via online
check-in in internet and then the passengers just scan barcode in check-in
machines to print the boarding pass.

Conclusion
In airplanes business which has a tight competitive. AirAsia become a first mover
for budget airlines in South East Asia Region, AirAsia has successful to being a leader
of cheap airlines. The company constantly focuses to growing and expanding their
business which also concern in the quality for customers. The good strategies been
implied on AirAsia business such as growth, focus and dynamics. Those strategies are
bringing AirAsia to be successful company in airplanes business.