Value Chain Analysis - Airasia Essay

2207 Words Apr 12th, 2011 9 Pages
Value Chain Analysis of AirAsia
The value chain analysis is used to evaluate the value of each particular functional activity that is added to the organisation’s products or services as seen in Diagram 1
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a)
Logistics
This involves all areas of receiving, storing of inputs when producing outputs. So far, AirAsia only operates on a single type of aircraft, the Boeing 737-300. Based on a report published by Aero Connections in 2004, that particular model was the best selling commercial jet of all times due to its efficiency and cost effectiveness. AirAsia also has
1382 employees and they received proper on-the-job training workshops so that they can perform multiple roles effectively within a simple and flat organisation
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As the lowest cost operator, AirAsia is able to continue to survive in a price war as its low-cost position is a valuable defence against any rivals.
c)
Reliability
AirAsia also chose more consistently secondary and regional airport destinations instead of busy and congested main airports. Generally, less busy airports can be expected to provide higher rates of on-time departures. Besides, without the need to load and unload any cargoes, the turnaround time of an aircraft can be reduced greatly –
AirAsia clocked the regions fastest turnaround time at only 25 minutes. As a result, travellers can expert and look forward to more frequent and puncture flights.
d)
Higher Frequency of Service
Predominantly, AirAsia offers point-to-point flights on short-haul routes – less than 4 hours flight time. The company is also able to achieve higher plane utilisation due to short turnaround time and as mentioned point-to-point routes. The ability to provide higher frequency service to justify the smaller capacity of a LCC is another key to
AirAsia’s success. In some instances, such high frequency of services can also attract business travellers since most of the time they are able to save time and catch their connecting flights on time
a)
Low Fare, No Frills
AirAsia’s intense focus on providing air travel with no frills leads to substantial costs saving. The absence of

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