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Assignment Received By: Date:

CHINDWIN COLLEGEBTEC HND IN BUSINESS (MANAGEMENT)

ASSIGNMENT COVER SHEET

NAME OF STUDENTREGISTRATION NO.UNIT TITLE Unit 7 Business StrategyASSIGNMENT TITLE Air Asia Strategic PlanningASSIGNMENT NO 1 of 2NAME OF ASSESSORSUBMISSION DEADLINE

I, !ere"y confirm t!at t!is assignment is my o#n #or$ and notco%ied or %lagiari&ed from any source' I !ave referenced t!e sources from #!ic! information iso"tained "y me for t!is assignment'

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Signature Date

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Assi*nment

3 4 5ell6structured Reference is done %ro%erly 8 s!ould "e done 3if any4

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A e"s fo im( ovement/

ASSESSOR SIGNATURE DATE 0 0

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STUDENT SIGNATURE DATE 0 0

NAME / ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

FOR INTERNAL USE ONL3;.RI*I.D . : ''''''''''''''''''''''''''''''''''''''''' ''''''''''''''''''''''''''''''' '''

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>!e follo#ing case is for individual %ur%ose and individual use' Its sole %ur%ose is for t!e individual student s assignment' >!e case reference is ta$en from T!in$ASEAN6 Ret!in$ing +ar$eting to#ard AS.A= )ommunity 2 1@ #ritten "y P!ili%otler, erma#an arta aya and ooi Den uan and %u"lis!ed "y +cCra# ill'

>ony *ernandes, t!e )!ief ./ecutive 9fficer of AirAsia, is t!e undenia"le %ersonalityand icon for lo#6cost carriers 3 ))s4 in Asia' After graduating from t!e ondonSc!ool of .conomics in 1EF7, t!e 2?6year6old +alaysian #or$ed as an accountantfor Ric!ard BransonGs ;irgin Records and #ent on to "ecome ;ice6President for 5arner +usic Crou% Sout!east Asia until 2 I "efore reali&ing !is c!ild!ood dreamof running an airline' 5it!out any %rior involvement #it! airlines #!atsoever, t!ec!arismatic entre%reneur !ad only t#o ualifications6$no#ing #!at "udget air travellers #ant and $no#ing e/actly #!at ma$es a "usiness %rofita"le'

In 9cto"er 2 1, *ernandes successfully convinced t!en Prime +inister +a!at!ir +o!amad to start +alaysiaGs first discount airline t!at could revolutioni&e Sout!east

Asian air travel and "oost tourism at a time #!en t!e travel industry #as strugglingfrom t!e im%act of t!e Se%tem"er 11 terrorist attac$s' >!roug! !is ne#lyincor%orated com%any, >une Air Sdn' B!d', *ernandes %aid a to$en USD 27 centsfor "an$ru%t government6o#ned AirAsia #it! t#o aging Boeing ets and USD 11million in de"t'

AirAsiaGs re6entry into t!e mar$et #as a real test of guts #!en esta"lis!ed airlines

#ere retrenc!ing staff and reducing routes due to s%iralling o%erations costs and adro% in t!e num"er of air travellers' *ernandes, !o#ever, sa# t!is as %erfect timing6aircraft leasing costs #ere do#n - H airline layoffs meant e/%erienced staff #asreadily availa"le and travellers #ould em"race a cut6rate air service t!at #ill savetime and money in a tig!t economy' >!e "udget airlineGs mission #as to ma$e flyingafforda"le for everyone, somet!ing un!eard of in t!e region' At t!at time, t!e aviationindustry #as dominated "y traditional full6cost carriers 3*))s4 #!ic! com%eted on"igger seats, #ider leg room, e/otic cuisines, and state6of6t!e6art in6flig!tentertainment' But t!e unimagina"le !a%%ened6#it!in t#o years of o%eration, AirAsia

s!o#ed %rofits for t!e first time and %roved t!at a no6frills airline model actually#or$s'

5it! t!e c!anging demands of consumers, AirAsia !as s$ilfully created ne#unta%%ed mar$ets of travellers #!o could not afford to fly "efore' Due to rising livingstandards and !ouse!old incomes, t!e %resence of ))s ma$es air travelaccessi"le to t!e #ider %u"lic' Being t!e first to introduce lo# fares, AirAsiagenerates #ides%read good#ill as a "earer of good ne#s to many travellers' >o datet!e AirAsia grou% !as carried over 1 million %assengers and is e/%ected to carryeig!t million %assengers in 2 G alone' 5it! one6#ay fares as lo# as USJ2'@ ,t!ousands of Asians #!o in t!e %ast #ould !ave ta$en a "us, train, or "oat, are no#%ersuaded to fly'

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*ernandesG "iggest ac!ievement !as "een to turn AirAsia into a regional lo#6costcarrier' Before !e arrived on t!e scene, countries in t!e region never !ad any $ind of o%en6s$ies agreement' In mid62 ?, *ernandesG lo""ying %us!ed +a!at!ir to raiset!e idea #it! t!e leaders of neig!"ouring >!ailand and Indonesia' As a result, t!ese

countries !ave granted landing rig!ts to AirAsia and ot!er discount carriers' AirAsia!as effectively c!anged t!e airline industry in t!e Asia Pacific' It no# o%erates moret!an 1 domestic and international flig!ts daily to @2 areas in +alaysia and eig!tot!er Asian countries6>!ailand, Indonesia, t!e P!ili%%ines, Singa%ore, Brunei,)am"odia, +acau, and )!ina' >!e fleet of aircraft !as e/%anded from t!e originalt#o to -1'

>o raise funds for future e/%ansion, t!e energetic airline successfully raisedR+717'- million 3USJ1E7 million4 in a %u"lic listing on t!e +alaysia Stoc$ ./c!ange3Bursa +alaysia4 in 2 -' In line #it! its gro#t! %lans, AirAsia secured a 1 6aircraftcommitment from Air"us for its A?2 s 3 firm orders, - o%tions4, #!ic! #ill %lacet!e "udget carrier as t!e single largest customer for t!e aircraft in t!e Asia Pacific,and %otentially one of t!e largest airline fleets in t!e region' >!e ne# aircraft #ouldgradually re%lace AirAsiaGs e/isting Boeing 7?76? s'

In 2 -, AirAsia formed a %artners!i% #it! one of >!ailandGs largest conglomerates,S!in )or%oration, to develo% a lo#6fare carrier, >!ai AirAsia "ased in Bang$o$'Besides serving t!e domestic routes, t!e >!ai o%erations introduced a flig!t fromBang$o$ to t!e S%ecial Administrative Region 3SAR4 of +acau' Su"se uently AirAsia

launc!ed its maiden service to +acau from its !u" in uala um%ur, t!e first lo#6fareairline to do so' In t!e same year, it "oug!t a sta$e in an Indonesian %rivate airline,P> A5AIR, and launc!ed Indonesian AirAsia for domestic routes to Bali, +edan, andPadang from t!e Soe$arno6 atta International Air%ort in Ka$arta'

AirAsia $e%t its costs lo# #it! s!ort6!aul flig!ts, a !ig! rate of aircraft utili&ation, anda fast turnaround rate' Income is derived from t!e sales of tic$ets and food anddrin$s on "oard, a lucrative cargo service, and mar$eting tie6u%s #it! ot!er com%anies' >!e lo#6fare no6frills airline recorded %rofits of USJ@'2 million #it!in 2

mont!s of o%eration, USJ1?'@ million in 2 -, and USJ? ' million in 2 @'

A ne# "udget terminal, t!e first of its $ind in Sout!east Asia, o%ened in Se%ang near uala um%ur on +arc! 2?, 2 ' Built at a cost of R+1 F million 3USJ2E'2 million4and s%anning ?@, s 'm, it !as t!e ca%acity to !andle ? , %assengers dailyand is t!e ne# !ome for AirAsia'

>!e %!enomenal gro#t! of AirAsia reflects its vision to "ecome an AS.A= "rand "y"eing t!e e%itome of AS.A= #it! its ric! cultures and #ealt! of resources' In

AirAsia, "randing starts internally #it! t!e staff' >!e com%any feels t!at #it!out t!estaff understanding t!e "randing of a com%any, it is unli$ely t!at e/ternally focused"randing e/ercises #ould #or$' All AirAsia staff must first $no# t!e com%anyGs

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to fly' .veryt!ing AirAsia does, from securing t!e lo#est landing fees to !edgingagainst fluctuating fuel %rices, is to ma$e t!is conce%t %ossi"le "y offering t!e lo#estfares to its customers' >!at is t!e %!iloso%!y of t!e com%any and t!e integrity "e!ind

AirAsiaGs "rand name'

5it! its s%ot6on %ositioning as AS.A=Gs no6frills and fun lo#6cost carrier, AirAsia !ass$ilfully targeted t!e lo#6"udget travellers in t!e travel segment' >!is is easilya%%lied at !ome as #ell as t!e neig!"ouring countries #!ere t!e customer needsand traveling %rofiles are similar' >o differentiate from t!e more so"er full6costcarriers, AirAsia %resents a fun image from a c!eerful aircraft interior to an informal,friendly service for all travellers' Its %a%erless %urc!asing system offers !assle6free"oo$ing #!ic! "enefits t!e airline and its customers "y reducing administration andcommunications costs #!ic! in turn results in com%etitive lo# cost %ricing' >!eonline system also allo#s yield management of seat and flig!t availa"ility as t!edemand can "e monitored in real time and t!e most com%etitive %ricing can "ecom%uted'

>o #in t!e !earts of customers outside +alaysia, AirAsia ma$es every effort to "randitself as a locali&ed airline #it! >!ai AirAsia in >!ailand and Indonesian AirAsia inIndonesia' Its #e" site Ns%ea$sN t!e native language of t!e country it o%erates in,#!ic! "oasts of "eing t!e first in Asia to offer multi6AS.A= language service,"esides .nglis! and )!inese'

*or a young carrier #it! an am"itious AS.A= vision, AirAsia !as strived to %rove

itself as t!e airline #it! an AS.A= ;ision and local action'

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GRADING

9"ss is ac!ieved "y meeting all t!e re uirements defined in t!e assessmentcriteria'

Me it Identify and a%%ly strategies to find a%%ro%riate solutions 3+14Characteristics / Possible Evidence 0 effective udgements !ave "eenmade on t!e %rocess of strategic %lanning #it! an effective a%%roac! tostudy and researc! a%%lied to strategic %lanning systems and issues at

Air Asia'

Select and a%%ly a%%ro%riate tec!ni ues' 3+24

Characteristics / Possible Evidence 0 Indication of relevant t!eory andtec!ni ues #it! effective udgements "eing made' >!is can include useof environment audit models suc! as S59>, P.S> ., Potter s @forces, value c!ain, etc'

Present and communicate a%%ro%riate findings 3+?4

Characteristics / Possible Evidence 0 A%%lication of a range of met!odsand sources of information used' Used of models suc! as Ansoffsmatri/, gro#t!, sta"ility, %rofita"ility, s%ace and %osition matri/' >!e

selection of met!ods ustified'

Distinction Use critical reflection to evaluate o#n #or$ and ustify valid conclusions3D14

Characteristics / Possible Evidence 0 >!e validity of t!e result udgedindividually as sound and relevant #it! self criticism of a%%roac!'Indicate t!roug! future directions in relation #it! com%etitor, customersand clients, industry and economy' Some of t!ese models includedmay"e Ansoffs, %ortfolio matri/, %lanning systems, etc'

Demonstrate convergent, lateral and creative t!in$ing 3D?4

Characteristics / Possible Evidence 0 >!e a"ility to indicate t!at ideasgenerated and decisions considered #it! convergent and lateralt!in$ing' >!ere is evidence of realistic, logical and systematic a%%roac!to t!e strategic %lanning %rocess' A clear evidence of good use of $no#ledge, a%%lication and understanding #it! strategic %lanningtec!ni ue used'

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9RESENTATION

1' >!e assignment s!ould !ave a cover %age t!at includes t!e assignment title,assignment num"er, course title, module title, ecturer8tutor name andstudent s name' Attac! all t!e %ages of assignment "rief8cover s!eet #it! your re%ort and leave t!em "lan$ for official use'

2' .nsure t!at aut!enticity declaration !as "een signed'

?' >!is is an individual assignment'

-' )ontent s!eet #it! a list of all !eadings and %age num"ers'

@' A fully ty%ed u% %rofessionally %resented re%ort document' Use 12 %oint Arialor >imes =e# Roman scri%t'

'

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Bs a1 Qcf March 2014 Cdc