Management Factor: Strategic Management: Airasa Airline

2.1 INTERNAL ENVIRONMENT FACTOR: STRATEGIC MANAGEMENT

Strategic management is the continuous planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals and objectives.

The strategic management process involves analyzing cross-functional business decision prior to implementing them. Strategic management typically involves:

Analyzing internal and external strengths and weaknesses.

Formulating action plans.

Executing action plans.

Evaluating to what degree action plans have been successful and making changes when desired results are not being produced.

Supported Airline: AirAsia Airline “Without strategy, the organization is like a ship without rudder, going around in circles.” –(Joel Ross

AirAsia with its ordinary symbol but strong brand, “Now Everyone Can Fly” nowadays has been a phenomena in the airline industry. They are one of the airline companies who are more focused with the strategy; how to reduce inefficiency and make the cheapest possible fare in the world. Currently AirAsia is more focused on reducing the fare to compete with similar organizations in the industry. They believe that they can grow in the airline business if they can control their cost. It must be efficient and reliable. Everything that counts as inefficiencies must be reduced and be possibly eliminated.

Furthermore, based on the environmental scanning performed, the demand for low cost carrier (LCC) industry will keep growing rapidly. The LCC industry’s attractiveness and profitability will attract many full serviced airlines to launch its version adding to the degree of rivalry in this industry. As the implication, AirAsia, the current market leader of LCC in Malaysia, Thailand, and Indonesia, will face competition from both existing and new players. In order to sustain its competitive advantages, they need to make considerations to be the lowest cost carrier in the airline industry. When the demand for lowest cost carrier goes up rapidly, it can be the great opportunity for AirAsia to run their

The first reason is because AirAsia needs to come out with the greatest strategy to compete with their rivals in the same industry. Without the right strategic management, it is possible AirAsia could not be able to compete with the complex business environment in the airline industry.

The second reason why AirAsia need to consider a strategic management is because in a company nowadays, general management (which is the process of achieving organizational goals by engaging in the four major functions of planning, organizing, leading, and controlling) may not be sufficient and supportive for the organization to succeed in the world of complex environments because they perform only similar activities better than competitors but do not create distinctive competitiveness.

The third reason is because of the globalization and the rapid development of E-Commerce. It causes the more competitive environment either for the airline industry or the other industries.

AirAsia Strategic