Essay About Strategic Position Of Airasia X And Value Chain Analysis

The Strategic Position of Airasia X – Can the Low Cost Model Go Long Haul?
UNIVERSITY OF EAST LONDONThe Strategic Position of AirAsia XAirAsia X: Can the low cost model go long haul?Word Count: 195111/9/2012Executive SummaryThe purpose of this report is to investigate the possibility of AirAsia X sustaining their low cost long haul business venture, in reference to a case study on AirAsia X. Research for this report included the use of Porter’s five forces, study of the macro-environment, and a Value Chain analysis, to identify the key success factors of AirAsia X. The major findings show that AirAsia X achievements is primarily due to its focus on cost reduction and product differentiation. While it is clear that there is a market for running a long haul low cost airline, this report recommends that AirAsia X continues to maintain their customer-orientated approach in planning and innovation, if it wishes to survive the predicted competitive market, where challenges such as; staff grievances, political interference, and an unstable economic condition will upset the market.Table of ContentsINTRODUCTION        AIRASIA X’s BUSINESS ENVIRONMENT        PORTER FORCES ANALYSIS        BARGAINING POWER OF SUPPLIERS        BARGAINING POWER OF THE BUYER        THREAT OF SUBSTITUTION FOR AIRLINES        THREAT OF ENTRY        RIVALRY AMONG EXISTING COMPETITORS        AIRASIA X MACRO-ENVIRONMENTAL FACTORS        LACK OF GOVERNMENT SUPPORT        CREDIT CRUNCH AND RECESSION        EMPLOYEE AWARENESS        THE VALUE CHAIN ANALYSIS        USING THE VALUE CHAIN ANALYSIS TO EXPLORE AIRASIA Xs’ COST-SAVING        INTRODUCTIONThis report will investigate the strategic position of AirAsia X, applying the porter forces to analyse its business environment, and the impact of emerging trends from the macro-environment, using the relevant PEST analysis. This report will also explore AirAsia X’s low cost approach using the value chain to analyse the strategy being implemented by AirAsia X, and how its low cost model and product/ service differentiation complements the business growth and competitive advantage in the industry. To conclude, a critical appraisal of AirAsia X’s low cost strategy will be provided, using results from the previous industry/environmental analysis to assess the sustainability of the AirAsia X’s competitive advantage in the future.