Airasia Value Chain Analysis

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Before 2001, AirAsia failed to attract new customers because of the poor management. And after bought by Tony Fernandes, AirAsia was re-launched in late of 2001 with low cost domestic airlines. Value chain helps managers for identifying activities that are important for competitiveness and attainment of company’s overall strategy.
Porter’s value chain can be divided in two categories:
i. Primary Activities
a. Inbound Logistics
Involves the activity of how to schedule flights, how to plan routes, how to cut off fuel costs, and competitor monitoring. Inbound logistics are also concern about the land terminal acquisition, aircraft purchasing and aircraft parts. AirAsia currently only runs Airbus planes which can save cost on training and focus
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c. Human Resource Management
HR Department will hire employees with multiple skills to increase the quality and effectiveness of the job done. Meanwhile, it will also reduce the cost for training development.
d. Firm Infrastructure
AirAsia focuses on goal which is to provide the lowest deal to customers which makes the decision making simpler.
MIS is used in all areas of the value chain as mentioned above, from the primary activities to the supportive activities, each area requires technology to run. The very obvious part is the technology area which require most of the system. Outbound logistics also require system so that everything can be organized for customers to book. Even though it is not obvious in the area such as human resource management, firm infrastructure and inbound logistics, and the other four areas but they are connected to the system and thus the system can work effectively.
SWOT of AirAsia:
Strength Weakness
 Have strong relationship with government and political leaders to help the smooth operation of the business.
 Good management of IT team to make sure the easiest method is used to make customers convenient in booking with
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What makes customer think the next when buying tickets are the punctual time to take-off, the staff performance, etc.
When customers book AirAsia in last minute, the price is no different with the other full service airlines, which will cause customers choosing the other airlines.
5. Power of Supplier
Due to few suppliers in the market has increased the bargaining power of supplier. Such as aircraft supplier, namely Airbus and Boeing have the most bargain power.
AirAsia now has switched the aircraft from Boeing to Airbus, but if AirAsia wants to switch back to Boeing, it will require hight cost to train the staff.
From MIS perspective, many airlines nowadays have already provided the same reservation system as AirAsia (online booking), which is a threat for AirAsia if does not make any improvements. But still, customer can print boarding pass directly from websites and also show the barcode by phone while check-in which are only AirAsia doing, will be a plus point in customer’s perspective.


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