Strengths And Weakness Of Airasia Strategy And Business Strategy

The word ‘strategy’ is an ambiguous one when it comes to describing from a business perspective or in a business setting. It can easily refer to having a plan or deliberately intended course of action for the execution of business ideas needed to keep a business functional. However, Mintzberg (1987), in his investigation of the complex nature of finding a suitable definition for ‘strategy’ has taken a more eclectic approach, by describing strategy not just as a plan, but also as a ploy, pattern, position, and perspective. As a ploy, strategy can be described as a particular maneuver over a series of actions to outwit the competition, and as a pattern, strategy can be seen as either an intended or unintended consistency in organizational behavior …show more content…
One of the strengths of AirAsia is its ability as first mover in the low-fare market on the Asian continent to scale faster than the competition in the same niche. With the rapidly growing brand, the company was able to add more aircraft to its fleet of aircrafts and consequently increase passenger capacity, which led to a further decrease in the cost per seat, thanks to its economies of scale. The implication of this was that the airline was able to charge lower fares and attract more customers, thereby increasing the prospects for market dominance on the continent. Scaling up operations and expansion is one of the operational maneuvers that could easily backfire in the airline industry (Lawton & Doh, 2011). The fact that AirAsia was able to achieve this feat is an indication of the strengths of the organization. Another major strength of the company is the brand name it has managed to build for itself over the years. They have taken advantage of their positioning in the market to establish themselves as a strong brand as far as flying on the continent is …show more content…
The generic strategy that applies to AirAsia is its cost leadership. In the airline industry, it is difficult, if not impossible to achieve product differentiation because the services being rendered are the same. Although AirAsia started out as the first low cost airline in the region, it has not remained so; otherwise, product differentiation would have been seen as a generic strategy. Focusing on a given market is also not a generic strategy in this case as customers cannot be stratified, having their corporate strategy in mind. However, as a cost leader, they have been able to target customers that are sensitive to pricing and have made flying affordable for everyone. They have been able to create a strong brand for themselves and have increased their fleet, the routes they cover, as well as the number of passengers that they convey on a daily basis. This has reflected in their earnings before and after tax and gave made a profit that had heavy debts upon inception to be debt