FACULTY OF BUSINESS ADMINSTRATION

STRATEGIC MANAGEMENT

MGT657
COMPANY REVIEW

PREPARED BY:
MIRRAH NAHZIHA BINTI MOHD NAZIR (2018817872)
NURUL AMIRA BINTI MOKTAR (2018448786)
RASYIDAH BINTI ABDUL RAHIM (2018889474
SITI NURAISHAH BINTI OTHMAN (2018638752)
SYAHIRA NADHIRA BINTI SAIFENI (2018651774)

PREPARED FOR:
SIR JUAN RIZAL HJ SA’ARI
DATE OF SUBMISSION:
20 JUL 2021
ACKNOWLEDGEMENT

It is always a pleasure to remain the fine people for their sincere guidance we
received. First of all, thanks to our parents for giving encouragement, enthusiasm and
invaluable assistance to us. Without all this, we might not be able to complete this subject
properly.

The success and final outcome of this assignment required a lot of guidance and
assistance from many people and we extremely fortunate to have got this all along the
completion of our assignment work. Whatever we have done is only due to such guidance
and assistance and we would not forget to thanks them.

We respect and thank to Mr. Juan Rizal bin Sa’ari, our Learning Facilitator, for giving
us an opportunity to do this assignment work and providing us all support and guidance
which made we complete this assignment on time. We extremely grateful to her for providing
such a nice support and guidance.

We really grateful because we managed to complete this assignment within the time
given by Mr. Mr. Juan Rizal bin Sa’ari,. This assignment also cannot be completed without
the effort and co-operation from all members. Last but not least, we would like to express our
gratitude to University Technology Mara for giving us place to future study.

Finally we apologize all other unnamed who helped us in various ways to completed this
report

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TABLE OF CONTENT

TITLE PAGE

ACKNOWLEDGEMENT 1

TABLE OF CONTENT 2

EXECUTIVE SUMMARY 3

COMPANY REVIEW 4-10

STRATEGIC PLAN 11-17

FINDINGS AND DISCUSSION 18- 23

CONCLUSION 24-25

REFERENCES 26

APPENDICES 27-28

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EXECUTIVE SUMMARY

Air Asia Airline was synonym with their tagline which is “Everyone Can Fly” and
they making flying possible for all sections of society from the middle-income to the upper
class.it also has been name as the world’s best low-cost airline, in order to maintain the low-
cost carrier Air Asia must be able to complete with competitors by doing some strategies.

Next, Air Asia has their own vision and mission of the company and this will help
each member who works day and night will be given an award that they have achieved in line
with the vision and mission of the company, so that they are more committed in their daily
work and then Air Asia can maintain their achievement in future. Air Asia will always be
ready to face any problems in terms of their operations and will come out with new strategies
and more careful planning to solve each problem.

The strategy-formulation analytical framework from the organization, we have

identified the strategies tools which are SWOT analysis, Internal and External Factor
Evaluation Matrix, Competitive Profile Matrix (CPM) and also Quantitative Strategic
Planning Matrix (QSPM) to analyze Air Asia strengths, weaknesses, opportunities and
threats, in this way Air Asia can detect differentiation and continued competitive advantage.

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2.0 COMPANY REVIEW

2.1 BACKGROUND

Air Asia Berhad is established in 1993 and started tasks in 18 November 1996. Principally,
this carrier was set up by the public authority possessed DRB-Hicom aggregate. Nonetheless,
on 8 September 2001, Tune Air Sdn Bhd the carrier was purchased by Tony Fernandes'
partnership from DRB-Hicom. Tony Fernandes' organization able to purchase Air Asia
organization at an impossible cost of RM 1 during 2001, yet he should assume control more
than 50% of the net liabilities of Air Asia around RM 40 million worth of obligations together.
Air Asia constantly ascending every now and then to be one of the best minimal expense
carriers in the business.

One of the triumphant honors of Air Asia is with most elevated minimal expense carriers in
Asia which is bit by bit expanding since 2001. With various 72 airplane, Air Asia conducts
more than 400 booked departures from centers in Malaysia, Thailand and Indonesia to more
than 61 worldwide and homegrown objections with 108 courses. The Low-Cost Carrier
Terminal (LCCT) at Kuala Lumpur International Airport is Air Asia's first and head center
point, while Senai International Airport, Kota Kinabalu International Airport and Penang
International Airport have become the optional centers. It is said that the LCCT conveys
roughly 10 million travelers every year. For a very long time, Skytrax has reliably named Air
Asia as the best minimal expense aircraft on the planet in global travel and carrier contests,
including the freshest honor for 2019. This achievement unmistakably shows that Air Asia
endeavors to hold its business and look for new methodology to draw in more individuals to
utilize its administration.

At present, Air Asia has flown more than 55 million vacationers from across the area and
keeps on fostering a more extensive organization of courses through its related organizations.
Air Asia has acquired a transformation aircraft travel through the corporate trademark that
"Presently Everyone Can Fly", with much more individuals the nation over choosing Air Asia
as their favored vehicle determinations. With regards to flight range, Air Asia has effectively
placed its image in the client's psyche. Air Asia is notable as a minimal expense Malaysian
aircraft and surprisingly Asia's greatest minimal expense carrier, nitty gritty in the Southeast
Asian locale. The carriers pronounce 'No Admin Fee' except for have a few expenses for other
aircraft's administrations that are for nothing. AirAsia has its enrolled office in Petaling Jaya,
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Selangor, and the settle is situated in Sepang, Selangor, on the grounds of KLIA. Moreover,
Air Asia is one of the main organizations that has completely accepted expense authority
through the quality and execution of activities. In particular, Air Asia has effectively penetrated
travel norms all throughout the planet and has become the main carrier on the world.

2.2 VISION AND MISSION

Vision

 To be the largest low cost Airline in Asia and serving the 3 billion people who are
currently underserved with poor connectivity and high fares.

Mission

 To achieve a positive and empowered workforce and developing close relationships

between staff and top management.
 Improving and implementing the technology to achieve Air Asia's targets all the time,
reducing the cost to the lowest.
 Maintaining the highest quality product, implementing cost reduction technologies
and improving service levels.

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2.3 ORGANIZATIONAL STRUCTURE OF AIR ASIA

Air Asia is the aircraft business that presented about the minimal expense transporter
(LCC) idea in Malaysia. In light of the authoritative construction of Air Asia, Air Asia is the
organization that have brought together association. In view of the exploration, Air Asia is
concentrated association, incorporated association have every specific of division that should
have follow all choices that made by the top administration (Barnwell, 2006).The top
administration should have the pioneer which is Chief Executive Officer (CEO). Chief should
need to settled on choice to all division in light of the fact that there have own to deal with all
choices under that position.

Then, organizational structure of Air Asia is based on the functional structure.

According to Robbins (2006), functional structure can be described as organization that have
people. Their group which is have the same skill and knowledge that contribute to work
together for specific activity in organization. As example, the situation of functional structure
that can be related is Air Asia company who have a various and different department, so that
the different department must being divided based on the knowledge and capabilities that
they owned. In addition, each head of the department had the authority for staff working
under the head of department, and. Departmental heads are all under the guidance of the
CEO. When reporting, the subordinates will inform and make report to their own
departmental head. So that, the departmental head sends a message to the CEO.

Lastly, Air Asia additionally was presented the geological design. Hierarchical
construction of Air Asia shows that geological design is have the specialists that come from
topographical regions and its branch activities have their own various pieces of that
topographical regions. As model, Air Asia organization has stretched out its branches to cover
the whole landmass, for example, into the diverse of geographic regions. Other than that, this
topographical design additionally can apply to the nations, religions and different things that
can relate with this construction. Likewise, geographic design additionally can be
characterized as coordination of laborers inside the unit or where various parts are answerable
for every association or movement inside the specific geological region. (Abraham, 2019)

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2.4 THE MAIN BUSINESS (PRODUCT OR SERVICES) OFFERED BY THE
COMPANY

We are on the whole mindful that Air Asia is a minimal expense aircraft to any areas
across Asia situated in Kuala Lumpur, Malaysia, yet beside that Air Asia likewise notable as
conveying inventive, customized items and administrations, that satisfy needs and needs of
their clients. Air Asia offer the best item and administrations to clients since Air Asia needed
to satisfy client needs and increment the interest of clients. In this manner, to draw in more
clients and persuade more steadfast clients, Air Asia needs to ensure that the items and
administrations offered are pertinent and meet the specific requirements of clients. There are
a ton of difficulties that Air Asia needs to look to stand where there are today. With a ton of
assurance and empathy Tony Fernandes has effectively convey the best item and
administrations towards the entirety of his travelers.

Air Asia offer products through Air Asia shop. The products enable customers to buy
authentic duty-free products which will be send right away to customer’s doorstep. For the
products offer such as chocolate and drinks, skincare and cosmetics, health and wellness
products, gadget, kid’s products and also fresh groceries. The reasons why Air Asia offerings
products are because Air Asia wants to see the local economy growing and society also are
able to support by purchasing local products with good value. Range of fresh groceries offers
by Air Asia include essential needs and also frozen meal. According to Tony Fernandes, CEO
of Air Asia Group BHD they are so blessed and grateful to make a big transformation to the
business to Air Asia Shop which is the effective and creative business division in Air Asia
Group.

Meanwhile, as for the services, Air Asia offer airline services, hotel services, car rental
services, delivery services and insurance services. Air Asia also offering "Santan" in-flight
menu, with variety of options to purchase on board which are food, beverages, merchandise
and duty free for transactions. Santan is the first restaurant that serves in-flight meals. This is
to make sure every passenger enjoys the delicious food while on board. Air Asia is certified
by Bursa Malaysia's KL Syariah Index and does not provide alcoholic drinks or pork in
compliance with Shariah standards. The services offered by Air Asia is to make sure any
passengers that fly with Air Asia will be protected and feel convenient along the way to their
destination.(refer to exhibit,1 and exhibit 2) .

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2.5 AIRASIA SWOT ANALYSIS

STRENGTHS WEAKNESSES
 Low profits
 Low-cost airlines
 Poor in service
 Has many destination
 The facilities at the airport
 AirAsia is the lowest leader in Asia
 No MRO facility (maintenance, repair,
 High in technologies
overhaul)
 Good marketing campaign
 Apply autocratic management

OPPORTUNITIES THREATS
 Demographic advantages  Increasing competition
 Growing of middle class  Maintenance cost high
 Increase abroad  Increasing oil price
 Government support  System disruption
 Technology advance  Uneasy feeling and bad perceptions

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STRENGTHS

Air Asia is a minimal expense carrier with the slogan "Everybody can fly" which it
offers the best cost and giving chance for all individuals to encounter loading onto a plane.
This will make individuals ready to go with the most minimal conceivable toll even with the
lower financial plan. Furthermore, they likewise give a decent activity where there give
numerous objections. For example, they have in excess of 20 nations for the course
organization like United Kingdom, China, New Zealand, and France.

Aside from that, Air Asia is the least transporter pioneer in Asia where they are
worried to be the most minimal expense aircrafts in Asia. They likewise effectively made the
mindset where all labor force was exceptionally dedicated and basically thinking in giving
minimal expense aircrafts in Asia. Another strength of Air Asia is their high in innovations.
This can be said where their top notch of usage of IT assist with accomplishing objective for
their special exercises and brand building. This is on the grounds that their new advancements
updates will be in email alarm and work area gadget which they were mutually with
Microsoft. Additionally, Air Asia likewise give week by week trips to Kuala Lumpur,
Singapore and Bangkok where they understand numerous explorers are from Trichy to
Chennai with the most reduced return costs contrasted with different aircrafts.

WEAKNESSES

One of the disadvantages of Air Asia is they receive a lot of complaints regarding their
poor services. The services provided may not satisfy customer’s need where they complaints
about the delay of the flights and the charges they need to pay for their things. Also, most of
the customers are complaining about the ticket that cannot be refund and a long line just to
buy the ticket. In addition, there are no maintenance, repair or overhaul facility operations
where they need to cut the cost in order to achieve the low-cost airlines services and may give
advantage to other airlines services.
Additionally, the weakness of Air Asia is the longer waiting period. For instance, the
customers need to wait for too long because sometimes the time between check in and
departure may take time for about 2 hours even though it is for the international departure.
Next, the decision and the opinion are based from the top management where all the
suggestions, opinions and decision that comes from their worker will not considered.

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 Other than that, in order to maintain their low-cost airlines services, they need to face the
low return in profits as well as reducing continuously in revenue inflows as they keeps their
price as low as possible.

OPPORTUNITIES

There are numerous chances that can be carried out via Air Asia. One of them is when Air
Asia acquire an abrupt increment during a get-away seasons where numerous individuals will
take some time off and pick Bangkok, Malaysia and Singapore as their objections. This is a
chance for Air Asia in light of the fact that the picked objections is the popular traveler spot
and freedoms to benefit from.

Likewise, they are advance in innovation. They applying an "e-ticket" for client where it
easy them to purchase the ticket without need to stroll in or line up at the counter. Likewise, it
will diminish delaying and simple individuals who occupied with their work. Then, at that
point, geological design of Asia is one of the chances for Air Asia. For example, prepares and
delivers is the substitute for planes. Notwithstanding, with the geological construction of Asia
make the movement via planes are more productive and advantageous.

Besides, the political associations between home nation and others will give openings for
Air Asia to acquire benefits and draw in clients either for home nation or other country.
Finally, when the monetary in great condition, it is a chance for Air Asia to build their deals
while keeping up with their minimal expense aircrafts administrations.

THREATS

Threats is the biggest issue that Air Asia need to face which is growth in other budget
airlines. When there are many other budget airlines growth, it will hard for Air Asia to be the
best low-cost airlines service because other budget airlines may come out with their best deal
in order to beat Air Asia. Besides, in order to maintain the low- cost airlines services,
customers may assume that Air Asia will not giving the attention on the safety of the
airplanes as they can see there are no maintenance or repair provided. Also, they may feel
insecure to board the budget airplanes since the prices is low. In the meantime, the fluctuation
in price of fuel will affect the management of cost where they need to maintain and provide
the low-cost airlines services. It will give difficulties for them in managing or assume the
price of oil in the meantime.

Next, one of the threats is technology problem. For instance, when there is a hacker
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who tries to hack their website with overload information or alter the original appearance of
Air Asia. Thus, this will give a bad impact and bad perceptions toward the airlines services.
Lastly, the threats is natural disaster. When disaster happen, all airlines are affected. Thus,
this cannot be predicted by anyone which whenever the disaster happen, the airline need to
face the losses and it may affect the business.

2.6 HIGHLIGHT OF MAIN INTERNAL RESOURCES AND DISTINCTIVE

Based on the SWOT analysis that we have conclude above, the main internal
resources for Air Asia can be found on their lowest carrier leader in Asia especially for the
low-cost airline provided. As we mentioned before, Air Asia is well known airline company
because they provide a low-cost airline and targeting customers who willingly travel with an
average service provided.

In our opinion, it is an upper hand for Air Asia since they are the person who give a
minimal expense carrier administration. With the high in innovation, Air Asia ready to
accomplish their objective for special exercises and make the Air Asia a surely understand
Airline Company. Additionally, Air Asia likewise give a week after week flight excursion to
clients and have numerous options of objections, likewise guarantee to be the least transporter
pioneer in Asia.

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3.0 STRATEGIC PLAN

Today, competition among airplane industries is very tough, all airplanes company in
the world is trying to conduct strategies to compete each other’s. each airplanes company
come with different of strategies to make sure they are better from their competitor. To be
successful, a company needs to make a strategy to achieve their objective and successful in
their business.

To remain relevant in the industry and compete with other airline, Air Asia need to
create new strategies. Air Asia can use strategic plan. Air Asia can use strategic plan.
Strategic plan has 3 steps in strategic management.

Firstly, Input Stage. In this stage have External Factor Evaluation (EFE), Competitive
Profile Matrix (CPM) and Internal Factor Evaluation (IFE). Weighted scores and ratings are
the two essential factors in IFE and EFE matrix. In the IFE and EFE matrix, companies give a
weight of 0.0 to 1.0 to each internal and external factor. Weights show the relative importance
of the variable to the performance of the company.

Next is stage 2 (two), also called the matching stages. This stages more focus on upon
generating feasible strategies combining key strategic variables. This stage includes SWOT
Matrix, portfolio analysis. These tools give information derived from input stage to match
external opportunity and threat with weakness and internal strength.

Finally, is stage 3 (three). This stage called the decision stage. In this stage we need to
do Quantitative Strategic Planning Matrix (QSPM). A QSPM uses input data from stage 1
(one) to evaluate strategies that identified in stage 2 (two)

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 STAGE 1
3.1 EXTERNAL FACTOR EVALUATION (EFE
No. Key external factor Weight Rating Weighted score

Opportunities

1 Demographic advantages 0.03 2 0.06

2 Growing of middle class 0.11 4 0.44

3 Increase abroad 0.12 3 0.36

4 Government support 0.15 4 0.6

5 Technology advance 0.09 3 0.27

Threats 0

1 Increasing competition 0.09 2 0.18

2 Maintenance cost high 0.13 3 0.39

3 Increasing oil price 0.07 2 0.14

4 System disruption 0.06 2 0.12

5 Uneasy feeling and bad perceptions 0.04 1 0.04

total 1 2.6

Rating indicator:
4- Major strength
3-Minor strength
2-Minor weakness
1-Major weakness
Weighted score indicator:
Ranges from 0.00 (not important) to 1.00 (all important)

The EFE matrix is EFE Matrix is a strategy tool used to examine the external
environment of the company and to identify the opportunities and threats available.
According to EFE matrix, the overall weightage score is 2.6 by adding all the weightage
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 score of Air Asia opportunities and threats. The highest of total weightage score possible is
4.0, meanwhile the lowest weightage is 1.0

The EFE matrix of Air Asia shows that is government support are the most important
factors in Air Asia as the aviation company, the rating given is 4. Another superior response
that given a rating of 4 is ‘Growing of middle class and government support. The rating 3
indicates that response is increase abroad, technology advance. The rating 2 is Demographic
advantage. Next for threats is the rating given 3 is maintenance cost high, the rating 2 is
increasing competition, increasing oil price and system disruption. The lowest rating for
treats is 1, that is uneasy feeling and bad perceptions.

NTERNAL FACTOR EVALUATION (IFE)

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 No. Key external factor Weight Rating Weighted score

Strengths

1 Low-cost airlines 0.15 3 0.45

2 Has many destination 0.12 3 0.36

3 AirAsia is the lowest leader in Asia 0.14 4 0.56

4 High in technologies 0.07 3 0.21

5 Good marketing campaign 0.05 3 0.15

Weaknesses 0

1 Low profits 0.06 2 0.12

2 Poor in service 0.1 2 0.2

3 The facilities at the airport 0.07 1 0.07

4 No MRO facility (maintenance, 0.17 2 0.34

repair, overhaul)
5 Apply autocratic management 0.09 2 0.18

TOTAL 1 2.64

Rating indicator:
4- Major strength
3-Minor strength
2-Minor weakness
1-Major weakness
Weighted score indicator:
Ranges from 0.00 (not important) to 1.00 (all important)

The IFE matrix is a strategic management is a tool used to analyses the current
position of the divisions and to suggest strategies for the future. A weight starting from 0.0
(low importance) to 1.0 should be allocated to every main element (high importance).
Quantity reflects the importance of the aspect if a business wants to survive on the market.
The total weights must be equal to 1.0. The ratings within the internal matrix show how weak
or strong each element within the organization is. The rating from 4 to 1, where 4 is major
strength, 3 is moderate strength, 2 will be a minor weakness and 1 will be a major weakness.
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 According to the IFE Matrix schedule for the companies in Air Asia set out above, the
best strength rating of 4 is for factors like AirAsia is the lowest leader in Asia, for another
rating is three that is Low-cost airlines, Has many destination, High in technologies and Good
marketing campaign. Next for the weakness, the lowest rating is 1 that is the facilities at the
airport, the rating for 2 is low profits, poor in service ,No MRO facility (maintenance, repair,
overhaul) and apply autocratic management.

The overall score of two is a median score. The total weighting score for Air Asia
companies is above the common rating of 2.64. This means that the organization's approach
is successful in seizing the opportunities.

STAGE 2

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3.1 SWOT MATRIX STRENGTHS WEAKNESSES
1.Low-cost airlines 1.Low profits
2.Has many destination 2.Poor in service
3.AirAsia is the lowest leader 3.The facilities at the airport
in Asia 4.No MRO facility
4.High in technologies (maintenance, repair,
5.Good marketing campaign overhaul)
5.Apply autocratic
management
OPPORTUNITIES SO STRATEGIES WO STRATEGIES
1.Demographic advantages 1.(SI, O1) Air Asia is provide 1.(W1, W3, O2) to growing
2.Growing of middle class the low-cost airlines service, the middle class in airlines
3.Increase abroad it will have the demographic company their need to
4.Government support advantages in Asian market. improve their facilities at the
5.Technology advance 2.(S4, O2) Air Asia uses the airport.
high in technology in their 2. (W5, O1, O5) with the
airlines and at the same time technology advance their
it will growth the middle have it will attract the user
class of airlines in the world.
THREATS ST STRATEGIES WT STRATEGIES
1.Increasing competition 1.(S3, S5, T1) To maintain 1.(W1, W2, T2) By offer the
2.Maintenance cost high Air Asia is the lowest airlines good services to the
3.Increasing oil price in Asian the increasing of customers their need to
4.System disruption competition will happen but always maintenance the
5.Uneasy feeling and bad Air Asia need to come out service even if it has the high
perceptions with good marketing cost
campaign in order to maintain
their strategy

2.(S1, T3) The increase in the

price of oil in aviation is very
troublesome to ensure that 2. (W5, T3)
Air Asia continues to To ensure that Air Asia
maintain with the tagline low- moving forward in industry
cost airlines is certainly airlines it should not be apply
difficult and needs more autocratic management and
research and various also have to take the views all
17
alternatives need to be parties and division because
implemented. is more skilled in their field.
S-O STRATEGIES

S-O strategies pursue opportunities that are a good fit to the company’s strength. This
is the strength of the company in order to take advantages of the opportunities. Based on the
SWOT MATRIX that we already identified two S-O strategies according strength and
weakness in swot analysis.

The first thing is Air Asia provide the low-cost airlines services to attract more
customer to choose Air Asia as their main flight because most of them have minimum budget
or specific budget their target for transportations especially during vacation seasons. By
providing the lowest flight prices this can also increase the interest of tourist to continue used
Air Asia. Because of this it will also have the demographic advantages in Asian market
because Air Asia target their customers population mostly in Asia country.

W-O STRATEGIES

W-O strategies is to overcome the weakness to pursue opportunities. W-O strategies is

the weakness and opportunities of the company where may the company use to take the
advantages of the opportunities. Based on the SWOT MATRIX that we already identified two
W-O strategies according strength and weakness in swot analysis.

The first W-O strategies that we have identified is to growing the middle class in
airlines company. In ensuring that is happen, Air Asia needs to improve public facilities for
customers. For example, implementation of a wider waiting area to accommodate the number
of customers who have chosen Air Asia. This is also to ensure new customers as well as
existing customers to remain loyal to use their airlines services. Next, with advance
technology Air Asia can meet their customers need. It can overcome the weakness by follow
the new era technology and apply in their systems.

S-T STRATEGIES

S-T strategies is a strength and threats of the company. It is the way to identify ways
that the company can use its strengths to reduce its vulnerability to external threats. Based on
the SWOT MATRIX above, we have identified two S-T strategies based on the strengths and
threats in SWOT analysis.

The first is Air Asia is the lowest leader in Asia. However, in the field of Asian
aviation Air Asia is not the only company that offer the lowest ticket prices for the customers

18
 but there are several other airlines also give the lowest ticket price. This is definitely
worrying Air Asia company because it has increased competition in attracting customers to
continue chosen Air Asia as their first flight.

Therefore, to ensure that Air Asia remains committed to being the airline of choice in
the Asian, it cannot only rely on promoting low ticket price but also need to have a good
marketing campaign such as provide the weekly flight and voucher campaign to attract
people to use Air Asia.

W-T STRATEGIES

W-T strategies establish a defensive plan to prevent the company weaknesses from
making it highly susceptible to external threats. This strategies is created to minimize
weaknesses or reduce weaknesses of the company and also avoiding the threats. Based on the
SWOT matrix above, we have identified two W-T strategies based on the weaknesses and
threats in SWOT analysis.

First is Air Asia will be able to be the low-cost airlines service and may increase the
profits. In order to increase the profit, Air Asia need to avoid paying to high cost of
maintenance. Therefore, by offer the good services to the customers and meet the customers
need Air Asia must to overcome with their poor service and always take action on customers
complain. This will get worse when they faced a bad perception and gain no trust from
customers.

STAGE 3

No. Key external factor Weight Amend/ Boost Marketing Release product to
enhance Activities New Market
current
Service
AS TAS AS TAS AS TAS

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Opportunities
1 Demographic advantages 0.03 2 0.06 2 0.06 3 0.09

2 Growing of middle class 0.11 3 0.33 - - 2 0.22

3 Increase abroad 0.12 3 0.36 2 0.24 - -

4 Government support 0.15 2 0.30 2 0.30 3 0.45
5 Technology advance 0.09 3 0.27 3 0.27 3 0.27

Threats
1 Increasing competition 0.09 - - 2 0.18 3 0.27
2 Maintenance cost high 0.13 - - - - 2 0.27
3 Increasing oil price 0.07 2 0.14 2 0.14 - -
4 System disruption 0.06 - - - - - -
5 Uneasy feeling and bad 0.04 - - - - - -
perceptions
TOTAL 1 1.46 1.19 1.57
AS TAS AS TAS AS TAS
No. Key external factor Amend Boost Marketing Release product to
/enhance Activities New Market
current
service

Strengths
1 Low-cost airlines 0.15 2 0.30 3 0.45 2 0.30
2 Has many destination 0.12 4 0.48 2 0.24 2 0.24
3 AirAsia is the lowest 0.14 2 0.28 2 0.28 - -
leader in Asia
4 High in technologies 0.07 3 0.21 2 0.14 2 0.14
5 Good marketing campaign 0.05 2 0.10 2 0.10 2 0.10

TOTAL 1.37 1.21 0.78

No. Key external factor Amend Boost Marketing Release product to
/enhance Activities New Market
current
service
Weaknesses

AS TAS AS TAS AS TAS

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1 Low profits 0.06 1 0.06 - - - -
2 Poor in service 0.01 1 0.10 2 0.20 - -
3 The facilities at the airport 0.07 2 0.14 2 0.14 2 0.14

4 No MRO facility 0.17 3 0.51 - - - -

(maintenance, repair,
overhaul)
5 Apply autocratic 0.09 3 0.27 - - - -
management
TOTAL 1 1.08 0.34 0.14
TOTAL 3.91 2.74 2.49

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 4.0 FINDINGS AND DISCUSSION

Why strategic alternatives very importance for an organization or company? It’s to make the
organization or company to stay successful because the market always keeps changing. That’s
why it needs to keep changing its ways and develop new strategies to counter new behaviors.

Strategic alternatives are create to sets the direction that means for human and material
resources of business and it will be apply for big opportunity to achieving selecting goals.
Often used in different ways it’s the reason for comprehensive concept in the strategy.

For that reason, Air Asia appears with lot of potential alternatives strategies from the SWOT
matrix in arrange to obtain their own corporate goals. Therefore those strategies to enhances
the implementation of existing services or products in the market. Various types of strategies
should be examined base on the specific organization’s goal. There are 3 strategies that Air
Asia can surface with, those are:

 Amend or enhance current products or services

 Boost marketing activities
 Release product to new markets

4.1 Amend or enhance current products or services

Do some development and amend in the existing product or services is how to apply for
company goal. Frequently, the attempt product development strategies require large amount
of cost are the efforts of the strategy. Hence, for amend and enhance the current product or
services the company need to do some research and development activities.

Besides that, have several guidelines that must follow by company in applying this strategy in
order to make it efficient. At the beginning, this strategy can be use when the competitiors’
products are in higher quality and been provided in market with a valid price. In other words,
the company may create a new product to gain more demands as they might not be able to
compete with the current product in the current market to remain competitive. Furthermore,
the more expenditure of the production of new product surely needs to manage by company.
The existing sales and operations may not be able to be maintained if the company could not
manage to more expenditure of the new production of the new product. Apart from that, while
produce new products and also create improvement and amend in its existing products the
research and development department of the company must be good enough for that.

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Air Asia can follow this strategy to apply few improve and amend in its existing products in
order to remain competitive among the other competitors. Accordingly, to gain the positive
outcome and feedbacks the company need to do some research and development activities to
amend and enhance the products.

Boost marketing activities

To boost the market share is another company’s goal in this strategy. It’s for the efforts are
focusing on the marketing activities in the existing market not on the product or services
(such as release a new product or apply any amend on the existing products). In the findings,
the company will be increasing their sales volume and absolutely will increase their market
share. Some illustrations, it will be expending their advertising expenditure and activities,
increase the number of salespersons or agents and also enhance effective promotion offers
when the company apply this marketing efforts.

There exist a few standards to applying this strategy in order to make it efficient that need to
be follows by company. In the first place, the current market is not overcrowded with other
competitors. It is related to current market when it already overcrowded with other
competitors, the marketing attempt may seem not really efficient because other competitors
will also make the same marketing approaches to stay competitive. Further, the present
customer is increasingly positive from demand of current products. It is through, reducing
demand of the current product because of fail to earn more profit, and the company may
disclose to the risk of losing more profit of expenditure for marketing activities that have
been spent. In the end, the status of competitors’ market share falls, but sales in overall
industry in increase when apply this strategy more efficiency. Rise over the demand of the
current products in this indicates. Following from this, company need to take the benefits
from this strategy to maximize profit during enlarge their advertising expenditure and
activities and also increasing effective for promotion offers.

Air Asia need follow to this strategy to boost the market share. Air Asia need focus the efforts
are focusing on the marketing activities in the current market over than focus on the product
or services (like release a new product or apply any amend on the existing product. In other
terms, while follow this strategy will make rise up of their sales volume and moreover their
market share.

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Release product to new markets

Understanding what their market wants, making smart product progress, and evolving new
product and exceed their customers’ expectations that the innovative businesses thrive.

For this strategy, needs to distribute their products and services to a new market for the
company’s goal. in this strategy is enforced by release their existing products on the
geographical areas or new market and for the efforts also are not on the products or services
(such as release a new product or apply any amend on the current products) both this efforts
are dissimilar in their both strategies.

Another standard that company must to be followed are to make sure the company can
manage well, stable and successful in its current operations. Due to the fact that, that
strategies consumes more activities, funds, and efforts to expand the company’s market to the
new area or the new market. Therefore, this strategy can’t be apply if the company could not
manage their current operation well because it will give losses despite or profit company.
Moreover, it still available even though the other markets that not packed with other
competitors. That means, the company cannot to be able to survive and need to compete with
the other competitors. Likewise, when company can manage the extra production capacity is
the best way to apply in this strategy. It will give extra profit in the new market, and it also
can make the current and existing market stability like usually.

Lastly, that are another way that Air Asia can pursue to open up new routes to other places
than the current routes. Although, it give many opportunities while opening up more routes
but it also can consume more costs such as more aircrafts and pilots will be needed. Such
example, during pandemic its effect in airlines business so Air Asia take action to open reach
new market which is make a food delivery. So Air Asia prepared their logistics infrastructure
and technology to introduce a seamless, fuss-free and affordable solution for customers.

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 STAGE 3- Quantitative Strategic Planning ( QSPM ) for best strategies.

Quantitative Strategic Planning Matrix ( QSPM ), Which begin of stage 3 strategy

formulation analytical framework, the purpose shown this alternative strategy is the best. The
QSPM are combination of Stage 1 and matching result from Stage 2.

Regarding the information, Stage 1 has shown on the EFE Matrix and IFE Matrix, which
coupled with SWOT Matrix, Space Matrix,BCG Matrix, and Grand Strategy Matrix that
comprised Stage 2. The result of Stage 1 and Stage 2 has provide the needed information for
setting the QSPM ( Stage 3).

QSPM allows strategic to value alternative strategies purposed based on previous identified
external and internal key success factors ( Fred R.David,2017). Below is the QSPM for Air
Asia company. The table has illustrated all the point of the QSPM which represents the
strategic alternatives, key factor, weights, attractiveness (AS ), Total attractiveness score
(TAS) and the sum total attractiveness score.

No. Key external factor Weight Amend/ Boost Marketing Release product to
enhance Activities New Market
current
Service
AS TAS AS TAS AS TAS

Opportunities
1 Demographic advantages 0.03 2 0.06 2 0.06 3 0.09

2 Growing of middle class 0.11 3 0.33 - - 2 0.22

3 Increase abroad 0.12 3 0.36 2 0.24 - -

4 Government support 0.15 2 0.30 2 0.30 3 0.45
5 Technology advance 0.09 3 0.27 3 0.27 3 0.27

Threats
1 Increasing competition 0.09 - - 2 0.18 3 0.27
2 Maintenance cost high 0.13 - - - - 2 0.27
3 Increasing oil price 0.07 2 0.14 2 0.14 - -
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4 System disruption 0.06 - - - - - -
5 Uneasy feeling and bad 0.04 - - - - - -
perceptions
TOTAL 1 1.46 1.19 1.57
AS TAS AS TAS AS TAS
No. Key external factor Amend Boost Marketing Release product to
/enhance Activities New Market
current
service

Strengths
1 Low-cost airlines 0.15 2 0.30 3 0.45 2 0.30
2 Has many destination 0.12 4 0.48 2 0.24 2 0.24
3 AirAsia is the lowest 0.14 2 0.28 2 0.28 - -
leader in Asia
4 High in technologies 0.07 3 0.21 2 0.14 2 0.14
5 Good marketing campaign 0.05 2 0.10 2 0.10 2 0.10

TOTAL 1.37 1.21 0.78

No. Key external factor Amend Boost Marketing Release product to
/enhance Activities New Market
current
service
Weaknesses

AS TAS AS TAS AS TAS

1 Low profits 0.06 1 0.06 - - - -
2 Poor in service 0.01 1 0.10 2 0.20 - -
3 The facilities at the airport 0.07 2 0.14 2 0.14 2 0.14

4 No MRO facility 0.17 3 0.51 - - - -

(maintenance, repair,
overhaul)
5 Apply autocratic 0.09 3 0.27 - - - -
management
TOTAL 1 1.08 0.34 0.14
TOTAL 3.91 2.74 2.49

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QSPM concluded that the best alternative strategy used by the Air Asia company is to pursue
the Amend or enhance current service which is strategic alternative 1. The sum total of
attractiveness score shown by the strategic alternative 1 which represents 3.91 is higher than
the strategic alternative 2 and 3. Strategic alternative 2 which is to Boost Marketing Activities
to a Release product new market while strategic alternative 3 is to apply some improvement
and modification in its existing products has representing the sum total of attractiveness score
of 2.74 and 2.49 each respectively. In these circumstances, by pursuing alternative 1 strategy,
Air Asia company will gain even more opportunities in order to rise the company’s revenues
from year to year. Hence, all the feedbacks, opinions and also perceptions from the wide
range of customers must be prioritize by the company itself for a better performance in future
and then will brings the company’s name into worldwide.

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5.0 CONCLUSION

Every enterprise should improve a clear vision and mission statements which each mission
and vision statements assist businesses to define performance requirements and metrics based
on the desires they want to achieve. They additionally provide personnel with a specific aim
to attain, promoting effectivity and productivity. Besides that, the mission and vision
statements can be used to draw media attention, goal particular patron groups and set up
business relationships with like-minded agencies as a public relations device (Ahmed, 2019).
The importance of the mission and imaginative and prescient towards the workable strategies
chosen due to the fact it must align with the organizational imaginative and prescient and
mission.

Generally, there are about three potential choice strategies chosen for these enterprise where
every of them is representing: increase advertising and marketing activities, launching
products to new markets and regulate or improve current products. In order to increase
advertising activities, the company have to make certain the current market is no longer
packed with other competitors, the demand of current products is more and more positive
from the existing customers, and the sales in basic industry is growing, the circumstance of
competitors' market share falls. Next, launching products to new markets’ targets to spread
their merchandise and services to a new market. In these situations, the business enterprise
needs to make sure that the company can manipulate well, stable and profitable in its current
operations, there are nonetheless other markets that are now not packed with other rivals and
the company can control the extra manufacturing capacity. Besides that, modify or enhance
existing products’ purpose is to apply some enchancment and modification in its present
products. This strategy is appropriate for the company to pursue when the competitors'
merchandise are in higher fine and been offered in the market with a lifelike price, when the
company can control the extra expenditure of the manufacturing of new products and when
the lookup and development branch of the company is correct enough to produce new
merchandise and also advance improvement and change in its existing products.

However, all these chosen choice strategies is aimed to make the rivals weaknesses as our
main electricity in order to improve the company’s popularity and to make it established and
well-known.

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Lastly, it can be stated that how strong is the organization, it is in reality hard for them to
preserve their business due to the fact there will always having a competitor in jogging a
business even a small one. In some cases, the organization itself need to assume of many
other techniques in order to maintain its title and well-established. The company ought to not
supply up early or otherwise it can motive the bankruptcy of the enterprise due to the lack of
proper management.

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References

Analysis of IFE, EFE and QSPM matrix on business development strategy. (2017, December 28).
Hotel Management. https://hotel-management.binus.ac.id/2017/12/28/analysis-of-ife-efe-
and-qspm-matrix-on-business-development-strategy/

EFE / IFE matrix. (2021, May 11). toolshero. https://www.toolshero.com/strategy/efe-ife-matrix/

External factor evaluation (EFE) for competitive analysis. (2021, January 9). Think Insights.
https://thinkinsights.net/strategy/efe-analysis/

How SWOT (Strength, weakness, opportunity, and threat) analysis works. (n.d.). Investopedia.
https://www.investopedia.com/terms/s/swot.asp

Internal factor evaluation (IFE) matrix. (2014, May 17). MBA Knowledge Base.
https://www.mbaknol.com/strategic-management/internal-factor-evaluation-ife-matrix/

What is strategic management, and why is it important? (2020, April 7). SearchCIO.
https://searchcio.techtarget.com/definition/strategic-management

Airasia. (n.d.). airasia | For Everyone | Flights, Hotels, Activities & More.
https://www.airasia.com/en/gb

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APPENDICES

Picture 1

Picture 2

Picture 3

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Picture 4

Picture 5

Picture 6

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