Air Asia

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DOW University of Health Sciences, Karachi *

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MISC

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Business

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Nov 24, 2024

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docx

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Table of Contents Introduction .......................................................................................................................... 3 Company Background and Home Market Analysis ............................................................ 3 Market Expansion Opportunities ......................................................................................... 5 Development of Market Entry Strategy ............................................................................... 6 Implementation Plan ............................................................................................................ 7 Technical Skills Application ................................................................................................ 8 Problem Solving and Critical Reflection ............................................................................. 9 Conclusion ......................................................................................................................... 10 References .......................................................................................................................... 11

Introduction This reflection is being written with the intention of providing readers with an understanding of how Air Asia, a well-known airline with its headquarters in Malaysia, intends to grow into new nations and what considerations will be taken into account in the process. The recently appointed manager of market development is the one who will be responsible for devising and putting into action plans to expand the customer base of the organisation. Air Asia is aware that, despite its current dominance in the Asian market, it will need to expand into other markets if it is to maintain its rapid expansion. This is something that the company has come to terms with. A market development manager's responsibilities include the search for potentially lucrative new markets, the formulation of viable entry strategies, and the supervision of the strategies' actual implementation. This study was commissioned with the intention of examining both the expansion strategy of the organisation as well as the primary responsibilities of a market-development manager. This study will be utilised in the future in order to make judgements concerning the expansion strategy for the organisation. Company Background and Home Market Analysis In 1993, Malaysian businessman Tony Fernandes established the low-cost airline that is now known as Air Asia. As a result of its quick expansion, it has become one of the most successful low-cost airlines in the world. The mission of Air Asia is to facilitate easier access to air travel by reducing ticket rates without compromising on service standards. The end goal of the company is to establish itself as the low-cost airline that is the most widely used in Asia. Malaysia, the company's native market, is where Air Asia originally gained success, and it is now in a position of dominance within Malaysia's aviation industry. The airline has responded to the increased demand for low-cost airfare by increasing the number of destinations

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it services and lowering the pricing at which it offers those services. Because it can accommodate both leisure and corporate customers, Air Asia has seen a lot of success because to the services it provides. To evaluate its success on the domestic front, Air Asia looks at indicators such as revenue, market share, and overall customer satisfaction. Through consistent growth in quarterly sales, the company has demonstrated that it is capable of winning new customers and turning a profit. The long-established full-service carriers in the area are going to face competition from this company due to its consistent growth in market share. Air Asia has been commended for the level of service it delivers to its passengers and lauded for the level of commitment it demonstrates towards its clientele. The success that Air Asia has had in its native market can be traced to a number of different elements. To begin, it caters to tourists who are interested in saving money because it is able to supply inexpensive tickets due to the thrifty business style that it employs. Second, the airline flies to a variety of locations both in the United States and around the world, giving passengers a wider range of possibilities. Finally, Air Asia has taken use of current technology by streamlining a significant number of its internal procedures and making its online booking alternatives as easy to use as possible. On the other hand, Air Asia is also dealing with challenges on the domestic front. One of the most difficult issues is competing with low-cost airlines as well as luxury carriers. The level of competition is so intense that it poses a risk not just to profitability but also to market share. Another one of the company's flaws is that it is susceptible to the whims of external factors, such as shifts in the cost of gasoline or the introduction of new rules.

Market Expansion Opportunities It is possible to investigate the possibility of entering new markets with Air Asia's expansion. There must to be a rise in the number of individuals taking vacations via aeroplane, as well as supportive policies and chances for efficient management. Emerging economies in South Asia, such as India and Bangladesh, as well as those in Southeast Asia, such as Thailand and Indonesia, are examples of potential new customers for Air Asia. In these locations, there has been significant economic growth, an increase in the number of people who are members of the middle class, and an increase in the demand for air travel that is within a reasonable price range. It is essential to take into consideration the size of any potential market in addition to its growth potential. Think about topics like the size of the market, the growth rate of the GDP, the expansion of the population, the development of the infrastructure, and the patterns of tourists. Air Asia wants a slice of the Thai market for a number of reasons, including the fact that the country has a robust tourism economy and great public transport. Due to the country's large population and fast growing middle class, Indonesia has a significant amount of untapped economic potential. Air travel, on the other hand, is becoming increasingly common in India as a result of the country's expanding middle class and rising per capita income, which has led to the country's aviation industry experiencing robust growth. Taking a look at the competitive environment and the trends in the market in the locations where Air Asia plans to fly is one approach to determine how successful the firm will be in the future. When one examines the many low-cost carriers, full-service carriers, and other market competitors that are now active in the business, one can gain insight into market saturation, pricing strategies, and consumer preferences. You may overcome a significant number of the

difficulties that are associated with entering a new market if you have adequate preparation and are familiar with the local laws, norms, and bilateral pacts. In India, Air Asia would have to contend with intense competition from both well-established low-cost carriers such as IndiGo and SpiceJet, as well as full-service airlines such as Air India and Jet Airways. Development of Market Entry Strategy After researching possible new markets, AirAsia needs to decide which one will be the most successful for the company to join. The decision ought to be made with market size, development potential, competition, regulatory environment, and Air Asia's major competencies as the primary points of consideration. It is necessary for a firm to target a market that corresponds to the strengths of the organisation and provides an environment in which the business can make the most of its effective operations. If AirAsia wishes to expand, it is possible that the company will decide to concentrate on a market that offers the most potential for growth yet contains the fewest existing competitors. Once it has decided to enter a market, AirAsia will need to carefully analyse the many alternatives it has for doing so. Investing can be accomplished in a number of different ways, including purchasing an ownership stake in the firm, entering into a business partnership with the company's current owners, or taking part in a joint venture. Setting up a local subsidiary or local firm that is entirely owned by the parent company is one way to make a direct investment in the market being targeted. Air Asia is able to combine resources with those of other local airlines and businesses through the formation of partnerships and joint ventures. These resources include consumers, infrastructure, and understanding of the market. It is extremely advantageous for a target business or airline to already have a presence in the territory that is being acquired.

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As soon as AirAsia has decided on a market entry strategy, it must immediately begin formulating a detailed plan for breaking into the market. It is essential to have detailed plans for everything, including but not limited to advertising and promotion, product naming and price, distribution and customer service, route expansion and support, and so on. The plan that the company has devised is intended to assist it in achieving success and gaining an advantage over its competitors. Implementation Plan A well-developed plan is needed in order to enter a new market with any degree of success at all. This strategy needs to provide an extremely detailed breakdown of the steps that are to be done, the roles that are to be played, and the attack strategies. Important tasks include getting the necessary permits and licences, building an infrastructure, recruiting employees and providing them with training, introducing a new product, beginning a marketing campaign, and combining with other companies or buying them outright. For any new market entry strategy to be successful, careful planning and distribution of available resources is absolutely necessary. It is necessary for Air Asia to establish whether or not the expansion can be maintained in terms of both time and money. Some of the various operational costs that need to be accounted for in spending plans include advertising and public relations efforts, personnel pay and benefits, technological upgrades, and increasing physical facilities.

You'll be able to monitor progress and assign responsibility appropriately if you establish milestones, deadlines, and duties for the project. During the process of implementation, major successes or occurrences that have been reached are referred to as milestones. When creating timelines, make sure to include not just the beginning and end of each significant event, but also the activities that came before it. It is possible to guarantee that everyone is aware of their job and is able to contribute effectively by delegating tasks to either individuals or teams. Technical Skills Application A manager of market development needs to have technical skills in a wide variety of fields in order to do their job effectively. Examples of such skills include market analysis, strategic planning, marketing, branding, finance, the establishment of partnerships, project management, and similar areas of expertise. It is also crucial for this profession that you have the ability to communicate well both verbally and in writing. These are the kinds of technical talents that will be put to use in a myriad of different situations as the business moves into its expansion phase. A comprehensive market research and analysis is beneficial for a number of different reasons, including the evaluation of market attractiveness, the identification of promising markets, and the comprehension of consumer preferences. The process of strategic planning will assist you in determining where to concentrate your efforts, how to enter new markets, and how to allot your resources in the most productive manner. It is possible to gain insight into how specific technology capabilities have been successfully applied by studying case studies or looking back at earlier experiences. When seeking to demonstrate the efficacy of market research and analysis in reaching a market that had not been accessed before, a case study could be useful. Another case study might demonstrate

how Air Asia distinguished itself from its rivals by using marketing and strategic planning to appeal to a specific consumer base. This strategy was used to differentiate Air Asia from its competitors. Problem Solving and Critical Reflection The process of expanding the market is almost certain to be plagued with hurdles and complications at every turn. Some examples of such difficulties include severe competition in the target market, complex rules, economic uncertainty, linguistic and cultural obstacles, and operational hazards. Alterations in the preferences of consumers, political upheaval, and unanticipated shocks from the outside world are all examples of circumstances that have the potential to limit progress. It is prudent to consider different approaches to completing tasks and to prepare fallback plans just in case something unexpected occurs. This includes visualising possible outcomes and coming up with reactions to the events that are transpiring. Air Asia might differentiate itself in the competitive industry by focusing on providing attentive customer service, developing unique add-ons, and doing focused marketing in order to increase its chances of standing out from the competition. It is essential for personal development and learning on the fly to engage in critical reflection on your assumptions and decision-making processes on a regular basis. Taking a closer look at the assumptions that were built into the market expansion's strategy and implementation. It is beneficial to consider these presumptions in order to evaluate them, accept their biases and limitations, and take into account different points of view.

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Conclusion The most important aspects of Air Asia's decision to exit its native market in Malaysia have been discussed in this paper. In the study, a discussion of the history of the company, an analysis of the local market, and the identification of possible new markets were included. In- depth discussions were held on conducting research on the market, assessing the strength of the competition, and formulating a strategy in order to break into a new market. In addition, the significance of technical expertise, the ability to solve problems, and reflective thinking during the development process was explored. The findings will be used to inform the subsequent phases, which include determining the optimal target market, investigating the various choices for entering the market, and developing a rollout strategy. In order for growth to occur in a healthy and sustainable manner, it is vital to reflect on one's own presumptions and decision-making processes while also engaging in strategic resource allocation, goal-setting, and deadline-setting.

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Zhang, Y., & Findlay, C. (2014). Air transport policy and its impacts on passenger traffic and tourist flows. Journal of Air Transport Management , 34 , 42–48. https://doi.org/10.1016/j.jairtraman.2013.07.010

Air Asia

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