Mgmt 6010 - Airasia Corporate Strategy

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ASSIGNMENT 2                  NEWS CRITIQUE

MGMT6010 Corporate Strategy

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The sources which published news on this item:

1. AirAsia India to begin overseas operations by Jan 2019: MD & CEO Amar Abrol. The Economic Times, March 4, 2018.
2. AirAsia India to begin overseas operations by Jan 2019, says CEO. Business Standard, March 4, 2018.
3. AirAsia India to begin overseas operations by January 2019: MD&CEO Amar Abrol. The Financial Express, March 4, 2018.
4. AirAsia India to begin overseas operations by Jan 2019: MD&CEO. Zee Business, March 4, 2018.

A brief summary of the event: (The Economic Times 2018)

Well-known for being one of the most coveted airline company and for its low-cost ticketing services, the joint venture of AirAsia and Tata Group, AirAsia India, created back then in 2013 is continuing to show its promises. The expansion plans is now targeting tier II (50000-100000) and III (20000-50000) overseas cities (Bangladesh, Nepal, etc.) by January 2019, after the latest addition of Indore (population of approximately 2 million) and Nagpur (population of approximately 2.5 million) as India’s main destinations. Announced by the Managing Director and CEO, Amar Abrol himself, it shows the continuous progress of the airline company since the creation of the joint-venture. They are currently waiting for the acquisition of 20 more airplanes before proceeding with flights towards the targeted cities. Expansion focusing on domestic operations have been the key to success of a long-term planning by the top officials of AirAsia India. The prospect of linking India to the rest of the South East Asian countries has been put forward as one of the most fundamental advancement for the company. Exploring markets were other entities such as AirAsia Malaysia, AirAsia Indonesia and AirAsia Thailand are already operating will be a huge bonus. Considerably increasing air connectivity among tier II and III cities at an affordable price of Rs.2500 per hour flight is also one of its main goals.

How does a news item illustrate the topic assigned for your presentation?

The assigned topic for this presentation is ‘Evaluating a firm’s External & Industry Advantage’. The selected news item focuses a lot on the whole title itself, that is, AirAsia already being a success in its industry (low-cost airline company) has a considerable industry advantage compared to other airline companies having destinations to South East Asian cities and in India as well. The strategy of the entity being AirAsia India has settled itself in the Asian Market since its joint-venture between the main company AirAsia and Tata Group. A very fundamental aspect of this article is the mentioning of the MD & CEO, Amar Abrol, as the one making the announcement in the press which proves that strategic decisions come from the top management who have the most influence that lower-positioned management in the media.

When talking about airline companies, it is seldom related to the external environment. The positioning of the main company having started in Malaysia and its expansion of services via strategic corporations such as AirAsia Indonesia, AirAsia Thailand and the latest one being AirAsia India, is the proof that the corporate strategy of AirAsia is the same for its other branches overseas. The corporate strategy for all of the entities is the same; low-cost airline services and promoting air-connectivity towards its destinations. The external environment of such groups have definitely their advantages as well as drawbacks.

It is the job of the top management to carefully analyse the situation in other markets by applying some key analysis such as PESTEL or Porter’s Five Forces. Political, Economical, Social, Technological, Environmental and Legal (PESTEL) issues have a definite impact on the operations which a group wants to carry out by expanding its services overseas. It is often regarded for the success of an industry to be able to effectively and efficiently export its operations and services in as many countries as possible. It is a very obvious fact that the AirAsia India conglomerate has chosen overseas cities which are close to India (South East Asian cities) as this is a very familiar environment to AirAsia. It has been proven that the firm’s external and industry advantage is in their grasps for AirAsia India to having set sights on nearby cities, where the tier II and III population will benefit from its services.