Air Asia Essay

2485 WordsJul 28, 201210 Pages
Air Asia was first established in the year of 1993 and the airline started its operation in late 1996 by a government-owned conglomerate DRB-Hicom. However, in the year 2001, the airline was hit with heavy debts and was eventually purchased by Tony Fernandes’s company, True Air Sdn. Bhd. for just RM1. That proved to be turning point for Air Asia, as Tony Fernandes remarkably turned Air Asia into an award winning and largest low cost carrier in Asia. Air Asia has positioned itself in the market as a low cost carrier in the airline market to give themselves an advantage over other competitors who provide the same service. The airline’s target customers are the people that are underserved with poor connectivity and high fares, which were stated in their vision (Air Asia 2007). In today’s competitive world, many companies have made use of Information Technology (IT) to become more competitive in their fields. The best known framework to analyze competitiveness is Michael Porter’s competitive forces model, as it demonstrates how IT can play a role to increase a company’s competitiveness. Porter’s model explains the nature and the increase of competition between airlines, which impacts Air Asia’s profitability in various ways (Turban, Rainer & Potter 2007). However, strategies can be developed to counter Porter’s five forces. (210 words) Porter’s Competitive Forces Model The threat of entry of new competitors The first force of Porter’s model is the threat of new competitors. Another upcoming low cost carrier in the country is Firefly which has been introduced by the main National Carrier, Malaysia Airlines. Also known as the community airline of Malaysia, Firefly has also a website of their own which displays their variety of their very own products and services. The obvious threat is that Firefly offers various products, services and attractions on their website

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