Assignment.docx

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

PREFACE

‫ سيدنا وحبيبنا وشفيعنا محمد وآله وصحبه‬,‫الحمد هلل رب العالمين والصالة والسالم على أشرف األنبياء والمرسلين‬ ‫أجمعين ومن تبعهم باءحسان الى يوم الدين أما بعد ؛‬ In the name of Allah, most Gracious, most Merciful. The praises to Allah, the Lord of the worlds, and the sequel is for those who keep their duty unto Him, further, here will be no hostility except against wrongdoers. Blessing and solution be upon the most honorable prophet and messenger, His family all His disciples, and those who follow them in goodness till the Day of Judgment. And we offer our expression of gratitude to Allah, due to His favor and charity, so, I have finished writing this assignment .This assignment is submitted to Encik Mohamad Fazali bin Ghazali in partial fulfillment of the requirements. After making a great effort, I finally completed his assignment. However, I realize that there are still many shortcomings in this assignment. Therefore I enthusiastically welcome the objective criticism and constructive suggestion for the improvement of this assignment .Finally, I hopes that this paper will be useful not only for ourselves but also for the readers.

“Subhana Rabbika Rabbil 'Izzati 'Amma Yasifun. Wa Salamun 'Alal-Mursalin. Wal Hamdu Lillahi Rabbil 'Alamin.” – 6 March 2018.

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TABLE OF CONTENT NO

TITLE

1.0

CHAPTER ONE: INTRODUCTION 1.1 HISTORY OF COMPANY

3

1.2 MISSION AND VISION

4

2.0

3.0

4.0

5.0

PAGE

CHAPTER TWO: BUSINESS STRATEGY 2.1 PORTER’S FIVE MODEL

6

2.2 SWOT ANALYSIS

10

2.3 CPM

20

2.4 IFE

20

2.5 EFE

22 CHAPTER THREE: BUSINESS MATRIX

3.1 SPACE MATRIX

24

3.2 BCG MATRIX

28

3.3 IE MATRIX

30

3.4 GRAND STRATEGY MATRIX

32

3.5 QSPM MATRIX

34

CHAPTER FOUR: AIR ASIA VS MALAYSIA AIRLINE 4.1 COMPARISON & CONCLUSION

40

REFERENCES

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CHAPTER ONE: INTRODUCTION 1.1 HISTORY OF COMPANY AIR ASIA AirAsia Berhad is part of the AirAsia Group, a world-famous low cost airline that operates extensive networks both domestically and internationally. AirAsia pioneered low cost airfares in Asia and is now currently the largest low fare, no-frills airline in Asia. It is also one of the largest airlines in all of Asia in terms of passengers carried. AirAsia has also been voted the World’s Best Low Cost Airline in 2009 and 2010. AirAsia Berhad is currently based in the Low Cost Carrier Terminal (LCCT), Kuala Lumpur International Airport (KLIA), Sepang. Its associate airline - AirAsiaX, is also located at the LCCT and shares operational facilities with AirAsia Berhad. The airline was established by a Malaysian conglomerate in 1993 and commenced operations in 1996. In December 2001, with the airline heavily in debt, AirAsia was purchased by Tony Fernandes of Tune Air Sdn. Bhd. for the price of RM1. As part of the purchase, Tony also took up the RM40million debt. Under the leadership of Tony Fernandes, the airline was flying high in 2002 and launched its new route that year. In 2003, a second hub was opened in Senai International Airport, Johor Bahru, as well as the airline’s maiden international flight to Bangkok. After that the only place AirAsia was heading for is up, as the Thai and Indonesian subsidiaries were set up as well as the commencement of flights to Indonesia, Macau, China, Philippines, Vietnam and Cambodia in 2005. AirAsia now flies to all ASEAN countries,a great portion of Asian countries that include India, Iran, Sri Lanka and Bangladesh; as well as to the United Kingdom, France, Japan, Korea and Australia via AirAsiaX. In 2011, we are setting up another AirAsia hub in the Philippines and are well on the way in setting up other similar operations elsewhere in the region soon after. MALAYSIA AIRLINE Malaysia Airlines is the flag carrier of Malaysia and a member of the oneworld airline alliance. The company, Malaysia Airlines Berhad (MAB) commenced operations as the national carrier

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on 1 September 2015 when Malaysian Airline System (MAS) was dissolved from Bursa Malaysia in 2014 and subsequently ceased operations on August 31, 2015. The airline began as Malayan Airways Limited, and flew its first commercial flight in 1947. It was then renamed as Malaysian Airways after the formation of the Federation of Malaysia in 1963. In 1966, the airline was renamed Malaysia Singapore Airlines (MSA) and in 1972 Malaysian Airline System (MAS). Malaysia Airlines has a long and proud history of a product and brand synonymous with outstanding, warm hospitality. The national flag carrier has won numerous awards from the aviation industry, being crowned 'The World's 5-Star Airline' by Skytrax multiple times (2009, 2012 and 2013) and recognition from the World Travel Awards as 'Asia's Leading Airline' (2010, 2011 and 2013). It has an impeccable track record of contributing to national development and has been a talent factory for skilled employees, especially its engineers, pilots and cabin crew. The airline has served as a critical enabler to connect Malaysia to the world, while simultaneously integrating the nation. As a global network, it offers the best way to fly to, from and around Malaysia. Serving more than 50 destinations worldwide and operating over 300 flights a day, Malaysia Airlines is part of the Malaysia Aviation Group (MAG). As a member of oneworld®, Malaysia Airlines offers the best connectivity with seamless journeys to more than 1000 destinations across 150 plus countries and access to over 650 airport lounges worldwide Malaysia Airlines operates flights from its home base, Kuala Lumpur International Airport, and offers connectivity across the globe, including Europe, the Middle East, Australasia, North and South Asia, and Southeast Asia. 1.2 VISION AND MISSION AIR ASIA Air Asia vision is to be the largest low cost airline in Asia so that we can provide a low cost service that will allow the three billion people to fly to more destinations across the region. We aim to be a truly ASEAN airline corporation as we look out for every country’s best interest. Page 4

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While the mission is to be the top company to work in, where employees are treated like family, also to create a globally recognized ASEAN brand, attain the lowest cost of any airline, so that everyone can fly with them, maintain the highest quality, to embrace technology, cost reduction, alleviate service levels and provide our guests with a “WOW” experience. MALAYSIA AIRLINE Malaysia Airline vision is an airline uniquely renowned for its personal touch, warmth and efficiency while the company mission is to provide air travel and transport service that rank among the best in terms of safety, comfort and punctuality.

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CHAPTER TWO: BUSINESS STRATEGY 2.1 PORTER’S FIVE MODEL Porter's Five Forces is a business analysis model that helps to explain why different industries are able to sustain different levels of profitability. The model was originally published in Michael Porter's book, "Competitive Strategy: Techniques for Analyzing Industries and Competitors" in 1980. The model is widely used to analyze the industry structure of a company as well as its corporate strategy. Porter identified five undeniable forces that play a part in shaping every market and industry in the world. The forces are frequently used to measure competition intensity, attractiveness and profitability of an industry or market. AIR ASIA INTERNAL RIVALRY According to the geographic and product market, Lion Air, Batavia Air, Mandala Air, Sriwijaya Indonesia and even Garuda Indonesia are Air Asia’s competitors. They also provide cheap prices and numerous flight routes in South Asia. All these flight companies compete in price except Garuda Indonesia which has a different strategy. As consumer of Garuda, we will get a valueadded. Air Asia claims that they have no Admin fees but in reality, there are many additional fees which don’t exist in other flight companies. Which is free for some companies is not for other ones. For instance, we can speak about booking seats fees or luggage fees. This is definitely the price dimension which matters on this specific market. Thus the firms struggle on their costs. For instance Air Asia is well-known for the considerable development of its Information Technology. Thanks to the considerable use of the IT, they get low costs and are then able to offer low prices. In Asian developing countries, the middle class is growing up. This creates huge opportunities for the airlines. The companies will have to fight to get some market shares because customers are not loyal and switch easily from one company to another.

ENTRY Brand awareness is quite important in this industry. To enter this industry not only is required high capital but also brand image. Most of the time consumers choose the product or service they

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really trust. New entrants have to create brand loyalty by making huge investments to establish their reputation.

The government legislation is one of the barriers for entering airlines industry. Therefore it is very difficult getting a new flight route from the government. If Air Asia doesn’t get any more flight-routes, it may affect their profit because they need to extend their network. Hopefully Air Asia has always been close to the governments in South Asia. For instance in Thailand, Shin Corp formerly owned by the family of former Thai Prime Minister, Thaksin Shinawatra, holds a 50% stake in Thai Air Asia. This helped Air Asia to open up and capture a sizeable market in Thailand. Government policies have limited new entrances, which is a good thing for Air Asia because they are already settled on the market.

Key inputs as technological know-how, raw materials, distribution or locations may also limit the access to the market. But when a company already established creates its own low cost firm, the key inputs are not a problem anymore. Tiger Airways which has been created by Singapore Airlines is one of the most dangerous competitors of Air Asia.

SUPPLIERS POWER In airline industry, the power of suppliers is quite high. First there are only two major planes suppliers which are Airbus and Boeing. However both suppliers provide almost the same standard aircrafts, so that the possibility of consumers to switch is low. Moreover Air Asia ordered large amounts from Airbus in order to expand its routes to international routes. They built a strong relationship and Air Asia managed to get big discounts.

Then Air Asia uses the fuel supplier (AVTUR) from Pertamina which prices are very sensitive. It may affect the ticket price. Moreover Air Asia, as Lion Air or Mandala, doesn’t use catering suppliers. They only offer snacks on flight and this is not for free. Lastly, Air Asia doesn’t have its own maintenance, repair and overhaul (MRO) facility. If this was not a problem before when they only started in Malaysia, now with three hubs and an important fleet of aircraft it might be too expensive. Air Asia must pay attention to this, not having its own MRO facility is a competitive disadvantage. Page 7

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BUYERS POWER Nowadays, buyers are much more informed and high-educated. That’s why they are very sensitive to the price not matter the product or the service. Even if Air Asia always provides the lowest price to the costumer, they still will make a comparison between the different airlines. Besides it is very easy and costless for the customer to switch from one company to another one because many are offering the same service. Moreover Air Asia often gives a bad image to the costumers because of their chronic flight delays. People could choose for another company to be sure being on time.

SUBSTITUTES AND COMPLEMENTS Sometimes the consumer is not so much interested in the main product for some reasons. On the low cost market, the main reason will be the price which he judges too expensive. Then he will look for substitutes. In the airline industry, we can meet two types of substitutes, the direct ones and the indirect ones. If the customer is looking for transportation for a short distance, he can look for indirect substitutes such as bus, train or ship. But travelling will take a longer time. He has to make a strategic choice between time and money. In Indonesia, the railroad industry is monopolized by PT.KAI so there is no competition. Regarding the bus and the ship, there are many companies so many choices. Some are the property of the government, some are private. If he is travelling on a longer distance, he will look for a direct substitute, that is to say other airlines. Teleconferencing and other type of business communications may also be substitutes to air travel. Then they would affect the demand for airplanes.

MALAYSIA AIRLINE INDUSTRY COMPETITORS There are many airlines in the airline industries. However, there are a few local competitors to Malaysia Airline such as Air Asia, Firefly, and many mores. As for international competitors for the company are Singapore Airlines, Garuda, Cathay Pacific, Thai International Airways. Also

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some other low cost airline such as Compass, Tiger Airways, Cebu Pacific, Jetstar Asia Airways, Impulse, Virgin blue Airlines. The number of competitors is very high and with the emergence of low cost carrier and deregulation the internal competition has increased and the only reason that reduces it is the low and highly volatile profitability. SUPPLIERS POWER There are some suppliers factor that can be include in five porter’s model which are fuel prices are ever increasing affecting the cost so the supplier power is high. Also the Asian airline industry is very optimistic about the growth potential of the Asian aviation industry so is placing huge aircraft orders thereby increasing the bargaining power of the suppliers again. The civil aircraft industry is monopolized by two major aircrafts manufacturers. Thus, large capital required so the leasing companies come into picture. Moreover, it is highly specialized and professional employees are required to maintain the status of five star carrier services. The recent crisis in the overall airline industry has to some extend lead to a reduction in the prices of the aircrafts. BUYER’S POWER Demand and supply are simply normal in economic. Demand is refer to buying power of a consumer. Malaysia Airline has a certain demand among local population (Malaysian) and also some of them from southeast population which are from Indonesia, Thailand, and Singapore. There is no switching cost as the buyer can easily switch from one airline to another so the power of the buyers increases. There is a very low product differentiation so to succeed providing either services at very low cost or give a five star experience so that customer pays the price for the superior services offered. The availability of information is really high and with the emergence of travel portals who guarantee that they can search for the lowest fares out of all the options available and book it for the client with just a click which even provides the ease of purchase, the bargaining power of the buyer is increasing. Frequent flyer program and online duty free purchase services can create customer loyalty and reduce the threat of customer switching over to other airlines to some extent. Low buyer concentration can also reduce the power of buyers. Page 9

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POTENTIAL ENTRANTS Airline industry has a high barrier to entry and exit as once an airline is operative then exist from the industry would amount to huge amount of loss. Licensing is one of the major barriers for the industry. Joint venture and partnership is the most recent trend in the industry which has increased the threat to this industry. High unit cost makes the entry to the industry unattractive. There are no economies of scale and scope available. Deregulation has to some extend reduced the restriction to the entry in the industry. Internet has again increased the new entrant possibility in the industry. THE SUBSTITUTE The surface transport can be substitute. With the advancement in technology for many things travelling personally is not important as with the help of web conferencing and services like online counselling the need for travel is reduced. The customer can switch to modes which are reasonable in terms of fare as air travel to some extend is expensive as compared to other modes of travel. The factor which alone reduces the attractiveness of the substitutes in the minds of the travelers is the fastness and reliability of air travel. 2.2 SWOT ANALYSIS SWOT Analysis is a useful technique for understanding company strengths and weaknesses, and for identifying both the opportunities open to the company and the threats the company face. Used in a business context, it helps the company carve a sustainable niche in your market. Used in a personal context, it helps the company develop their career in a way that takes best advantage of their talents, abilities and opportunities. AIR ASIA STRENGTH The first phase of the SWOT analysis is the strengths analysis for Air Asia. There are some unique strengths of Air Asia that others company could not defeat them. First and foremost, Air Asia has a very cooperative and strong management team with strong connections with the

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government and the airline industry leaders. This is because Air Asia consists of different background of executive management member’s team from different kinds of industry professionals and ex-top government officials. For an example, Shin Corp in the past which owned by the family of former Thai Prime minister which name Thaksin Shinawatra have hold around a fifty percent of shares in the Air Asia branch which situated in the Thailand. Due to this reason, it has help to create and explore up yet attract a sizeable market in Thailand. Besides that, Air Asia have a strong working relationship with Air bus which help them to purchase aircraft for discount and this air craft can save more fuel which is fuel efficient compared to Boeing 737 planes that many airlines company are using currently.

Besides that, Air Asia management team is also famous in strategy formulation and execution. The strategy that they have created at the beginnings was a brilliant blend of strategies that have proven by other low cost airlines which situated in US and Europe. Those strategies include Ryanair's operational strategy which is mean no frills or landing in secondary airport, second is the Southwest's people strategy which also named as employee come first strategy, third is the Easy jet's branding strategy which means a link between other service providers such as hotels, car rental and so on. On the other hand AirAsia's brand name is well established in Asia Pacific. Ignoring the common print media advertising and promotions, Air Asia's top executives also expert in making promotions through news with their slogan of 'media friendly' and provide free sharing and advertisement of the latest updated information of Air Asia which include current packages, fees, discounts and the others. On the other hand, Air Asia have a good partnership relationship with the other service industry such as hotels, hostels, car rental firms, medical tourism such as hospitals, buses, taxis and others. Meanwhile, Air Asia also have partner with Citibank to create an Air Asia Citibank Card and have master and visa card. This have really convenient the tourism and hence create a very special image among the travelers. Air Asia also have alliance with Galileo Global Distribution System that convenient the travel and tourism agents internationally to check the flight information such as the flight fees and schedule and make booking which also consequence strengthen Air Asia string brand name. Moreover, Air Asia has some strong branch in other country such as Indonesia Air Asia and Thailand Air Asia have successfully improve the brand to become a regional brand and can compete with Malaysia

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branch of Air Asia. Air Asia also has invited one of the world's famous football team Manchester United and the AT&T Williams Formula One team to advertise and increase the quality reorganization image to a greater extend.

Meanwhile, AirAsia is the low cost leader in Asia. Through Air Asia Academy, Air Asia has successfully produced a low cost airline mentality and image among their working environment and workforce. This workforce is very important, flexible and high competence and promises in letting Air Asia become the leadership of low cost airlines in Asia. This low cost leadership can let all various income customers to have enjoyed the affordable air fees.With the excellent utilization of IT and technology, Air Asia can directly involved in their promotional activities which include email to customers and desktop widget which was partner developed with Microsoft for new promotions, with over three millions hits per month and the most famous surfed booking engines internationally brand building activities and also maintaining their low cost strategy through enable customers directly purchase tickets and hence can save the airline agent fees. The main vision of the Air Asia that have make Air Asia being successful is the logo of "A low cost carrier which offers five-star service where everybody can fly."

Furthermore, Air Asia has provided various local Malaysia foods for all the Malaysian customers’ and offers in-flight services that promote Malaysian hospitality with their friendly and warm welcoming service. Besides of providing a good hostility service, Air Asia also has provided internet and mobile services as mediums for check-in and booking. Customers can always use their mobile phone to serve internet and online booking the seats or reserves. Moreover, it is quite convenience for customers is, Air Asia provide fly schedule and the prices from Malaysia to other countries or other countries to Malaysia price. Besides, customers can easily check out the time of fly schedule of Air Asia. With all the convenient, Air Asia become the most favorite airline in Malaysia for the customers. On the other hand, Air Asia provides comfortable seats, secure safety and a cleanliness environment for the customer so those customers feel comfortable during their fly times with the low price.

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Furthermore, Air Asia has a very strong promoter and media of advertising. Air Asia always has promotions that attract customer’s interests. Besides that, Air Asia have good marketing skills employees and technology of advertising which can influence customers attractions and choice of purchase. Moreover, Air Asia is a well-established LCC operating out of South East Asia and it has operations in over 25 countries and over 400 international and national destinations, and the most famous destination is Bali- Indonesia, Thailand - Bangkok, Korea-Seoul, Japan- Tokyo and Nagasaki, Taiwan and the other. Meanwhile, it has subsidiaries in Indonesia, Thai, Philippines, Japan and it has a fleet size of nearly 300 aircrafts. WEAKNESSES Air Asia does not have its own maintenance, repair and overhaul (MRO) facility. Although it is a good strategy with the hub and few planes only need to maintain when Air Asia getting their first journey which only in Malaysia. However, with those few hubs that only situated in Malaysia, Thailand and Indonesia with over 100 planes that owned by Air Asia currently and another 100 planes which intended to be received in future next few years, Air Asia have to take proper actions of confirmation such as continuous of maintenance of planes with maintaining the overall costs low. This is a competitive disadvantage that Air Asia do not have its own belonging of MRO facility which cause many difficulties.

Meanwhile, AirAsia receives lot complaints from customers on their service. Examples of complaints are around flight delays, being charged for a lot of things and not able to change flight or get a refund if customers could not make it. It is crucial for Air Asia to have a good customer service and management when the market competition is more and more intense. Besides, this is also due to do not have too many routes as compared to market leader. Which mean Air Asia can't provide many fly schedule compared to the MAS for example. And Air Asia has a very stiff competition in its sector. OPPORTUNITIES First and foremost, there are 2 major events that are taking place. First of all, is the ever increasing oil price. Secondly, is the "ASEAN OpenSkies" agreement that has been reached. Page 13

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Fuel price that have been increase in society and competitors eyes may seem like a threat for Air Asia. But yet Air Asia is a low cost leader, it cost will still remain as the lowest among the other regional airlines this is because Air Asia is an upper hand among the others. Hence, Air Asia have a great chances to attract parts of the existing consumers of full service and customers that prefer low cost from other airlines. However, there will be also some decrease in overall travel performance which includes casual or budget travelers. The "ASEAN Open Skies" allows unlimited flights among ASEAN's regional air carriers beginning December 2008. Due to this factor, Air Asia can remain competence and defeat the other regional airlines. However, this agreement can be seen as more of an opportunity with the "first mover" advantage as well as its strengths in management, strategy formulation, strategy execution, strong brand and "low-cost" culture among its workforce. Besides that, Air Asia have created some opportunity to partner with other low cost airlines as Virgin to tap into their existing strengths or competitive advantages such as brand name, landing rights and landing slots in other meaning is time to land on ground. Meanwhile, the population of middle class consumers has being continuously increased and hence creates a larger market and a huge opportunity for all low cost airlines in this region including AirAsia.

On the other hand, Air Asia will have the opportunity to promote Malaysian tourism, which in return will increase the company's revenue. This is due to Air Asia has a good government and citizen relationship of Malaysia. Furthermore, Air Asia have contract with Malaysia in the 'CutiCuti Malaysia' and the entire customer that relate to the 'Cuti-Cuti Malaysia' will promote the Air Asia fly.

Meanwhile, within the South-East region there are lots of potential customers that consist of foreign workers from neighboring countries which include Indonesia, Myanmar, Philippines, and Vietnam which allow Air Asia to grab huge opportunities and hence also increasing the travel from India and the Indians customers normally prefer cheap and budget airlines as they are very particular about the airlines fees.

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THREATS There are some of the threats that face by the Air Asia Sdn Bhd, firstly, the Air Asia faced certain rates like airport departure, security charges and landing charges are beyond the control of airline operators. These costs that have been mention is a serious threat towards the airlines that intention to maintain their low cost strategy. For example, Changi airport in Singapore charges SGD21 for every person who departs from Singapore. Besides, AirAsia's profit margin is about 30% and this has already attracted many competitors. Furthermore, lots of the small airlines competitors provide full service airlines have or planning to create a low cost subsidiary to beat down AirAsia. For example, Singapore Airlines has created a low cost carrier Tiger Airways. On the other hand, Air Asia users' perception that budget airlines may compromise safety to keep costs low.

Moreover, Air Asia faced the threat of rising fuel cost and labor costs. The price of the fuel that keep on increase caused the Air Asia can't be able to have low cost production and expense high, consequence either increase price or reduce the fly route. Meanwhile, the employees of the Air Asia demand of the high salary and the increase cost of the training and staff welfare cause Air Asia expenses have been increased. MALAYSIA AIRLINE STRENGTH Strengths reflect Malaysia Airlines (MAS) competencies and capabilities of their core business which differentiate the company itself with other service company based on value, price and services. As we have reviewed and analyzed the strength of MAS, there are some sub points that can show the sequences of the strengths in Malaysia Airlines. Malaysia Airlines is one of the service companies that established for more than 70 years and its brand image has been highly recognized. Malaysia Airlines had put their full effort on their branding and publicity and it have revolved primarily around flight crew, different with most other airlines which tend to emphasize aircraft and an extensive route network. Malaysia Airlines have their own branding strategy that involves its flight attendants to promote the airline. This strategy seeks to portray cabin crews of Malaysia Airlines as representative of Malaysian hospitality and friendliness. During the late Page 15

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1990s to year 2007, Malaysia Airlines has been decided to use the “Going Beyond Expectations” slogan to brand itself internationally by heavily promoting its service excellence. In a way to transform their business plan Malaysia Airlines have come out with the new branding strategy slogan which is “MH is Malaysian Hospitality”. It is to emphasize the hospitality of its cabin crew instead of the airline’s extensive network and its premium cabin and economy class cabin products.

To ensure the customers are having the best service experience by all the crew and staff, Malaysia Airlines runs a training program for cabin and flight crew. The airline holds a lengthy record of service and best practices excellence, having received more than 100 awards in the last 10 years. The most notable ones include being the first airline with the "World's Best Cabin Crew" by Skytrax UK consecutively from 2001 until 2004, "5-star Airline" in 2005 and 2006, as well as No.1 for "Economy Class Onboard Excellence 2006" – also by Skytrax UK.

Malaysia Airlines have strong and well-designed organizational structure. Its talented management team always plays the most important role in planning and controlling every single action in their service system to perform the best brand experience. Although Malaysia Airlines management had face difficulties and losses in several times, the management team always have their own strategies to make sure that they are able to take this challenge as their opportunity to enhance their reputation and quality of the service. On 1 December 2005, Idris Jala has been appointed as the new CEO to execute changes in operations and corporate culture. Under his leadership, Malaysia Airlines unveiled its Business Turnaround Plan (BTP) in February 2006 which highlighted low yield, an efficient network and low productivity. Apart from airline services, Malaysia Airlines is also involved in cargo and maintenance services. It has operations in six continents and covers over 100 different locations. It shows that Malaysia Airlines is a service company that has strong platform in the business industry.

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WEAKNESSES A company’s weaknesses are the things it does not do well or that other companies are doing better. From our evaluation, we found that although Malaysia Airlines had its humble beginning in the golden age of travel but this company is still having some weaknesses as what every business have.

As we know Malaysia Airlines or better known as MAS is one of service companies that providing airline services to its customers. On the other hand, Malaysia now needs to compete with other 2 airline companies in Malaysia, Air Asia and Berjaya-Air. Both companies providing different kind of services with their customer’s different needs. Despite the fact where Malaysia Airlines does provides domestic and international flight services, majority of the customers of Malaysia Airline are international flight customers. If we compared with other airline companies, the cost offered by Malaysia Airlines is more expensive than others.

As a 5 stars airline company, the costs needed for the maintenance and convenience by Malaysia Airlines are quite high. Thus, it will effect the real cost that will be purchased by the customers. It is actually show that Malaysia Airlines have a certain target market with high income. Based on some research that we have made, the cost of living in Malaysia is not really high compared to other country like Japan. There just a few groups of people in Malaysia who can effort to pay for the cost to fly because of the high rate of airlines tickets.

Every business may go through many losses and difficulties in related industries. Malaysia Airlines is providing services that need a big capital to run its business effectively. Thus, the risk that might be happened in the future is too high. From our evaluation on Malaysia Airlines, the management team has set their objectives clearly and has the best strategies to obtain their objectives but at the same time, they did not know exactly how to implement the strategies effectively. That is why Malaysia Airlines has met many difficulties and losses in their business

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and need to turnaround the business to recover the problems and sometimes it needs high turnover rate among employees.

Several weaknesses in airline operations were identified as the causes of the RM1.3 billion loss. These included escalating fuel prices, increased maintenance and repair costs, staff costs, low yield per available seat kilometer ("ASK") via poor yield management and an inefficient route network. Another factor for the losses was high operating costs. Malaysia Airlines substantially lagged its peers on yield. Some of this gap is due to differences in traffic mix, (less business traffic to and from Malaysia than to and from Singapore), but much of it was due to weaknesses in pricing and revenue management, sales and distribution, brand presence in foreign markets, and alliance base.

Moreover, some weaknesses that have occurred in the operation of their services are caused by some underdeveloped channels and distribution system. It is because Malaysia Airlines need to expand their business widely throughout the region. Beginning in 2008, the airline operates new destinations, with Macau and Yogyakarta being the latest additions to its list of destinations. Besides, this service airline company growth post-recovery because of the trimming of the airline since year 2000.

OPPORTUNITIES Opportunities are the openings in the industry which could be utilized by the company in order to make it much more favorable in the market. The areas of opportunities are higher customer satisfaction and the changes in customer preference. Customers have different needs and desires in term of purchasing. It is because of the factors like demographic, psychographic, and geographic factor. In a way to obtain a certain objective, Malaysian Airlines should be able to introduce a new concept of flying with Malaysia Airlines. It is because customers are human beings that can easily having a change in their life. They can be influenced by many aspect of their life including the way of their lifestyle. Due to that, Malaysia Airlines is continuously Page 18

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innovating in all aspects of their services and products in their transformation journey to be a Five-Star Value Carrier.

Based on the survey and research that have been done by their team, Malaysia Airlines is introducing hot meal boxes which offer favorites such as nasi lemak and nasi goreng kampung as well as the introduction of new varieties in a move to respond to customer preferences while continuing to optimize aircraft utilization in line with its Business Transformation Plan. In addition, Malaysia Airlines has more menu options available and customers can now choose between an Asian or western meal. A total of 37 menus are on offer over an 8 week cycle rotation to ensure that frequent travelers will be able to enjoy a variety of meals. New offerings include nasi impit with lontong, black pepper chicken balls with spaghetti, and waffles with fruit fillings. A permanent feature of this new menu is the option of western meals. Passengers will continue to enjoy unlimited in-flight beverages such as coffee, tea and fruit juices. New kiddy and special meals including vegetarian are also progressively being developed.

THREAT Threats are the elements from outside of the organization which could have negative effect on the company. There are some threats that will affect Malaysia Airlines such as economy, competitors, terrorism, and technology. Changes in economy will directly affect every business positively and negatively in many aspects. If the economy are having crisis, it will affect the whole business globally. As one of the company airlines, Malaysia Airlines has many connections through out the world and it will give a big impact to the company if there are any changes in economy level. Thus, it is important for the organization to prepare some alternatives to overcome this problem because these unpredictable problems may occur anytime.

Terrorism is leading to decrease tourism and confidence in the airlines. It might happen in many ways of terrorism either in certain countries or it might happen in the plane itself. As example, we know that Malaysia Airlines flies to 88 destinations. In cooperation with code-share partner Page 19

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airlines, the airline serves more than one hundred destinations worldwide. If there is terrorism happen in the area of Southeast Asia, Malaysia Airlines need to stop their flight destination to the Southeast Asia for a certain time. It is because it will be too dangerous to the people and the whole crew as well as the plane. At the same time it will decrease the confidence in the airlines. 2.3 CPM CPM, or the CPM Matrix, stands for Competitive Profile Matrix and is a powerful strategic analysis tool. CPM allows business owners, stockholders and other interested parties to see the strengths and weaknesses of all major competitors in an industry on a single page. This helps visualize and communicate the competitive landscape. Air Asia FACTORS

WEIGHTE

SCORE

D (W)

(S)

Advertising

0.05

5

Market Share

0.30

Safety

Malaysia Airline WEIGHTE

SCOR

D (W)

E (S)

0.25

0.05

3

0.15

4

1.2

0.30

3

0.9

0.10

2

0.2

0.10

3

0.3

Punctuality

0.15

3

0.45

0.15

4

0.6

Fare charges

0.05

5

0.25

0.05

2

0.1

Customer Expectations

0.10

4

0.4

0.10

4

0.4

Management

0.05

4

0.2

0.05

3

0.15

Reliability

0.05

3

0.15

0.05

3

0.15

Resources

0.10

4

0.4

0.10

5

0.5

Technology

0.05

3

0.15

0.05

5

0.25

1

37

3.65

1

35

3.5

TOTAL

W*S

W*S

Table 2.3.1 CPM of Air Asia and Malaysia Airline 2.4 IFE IFE is a strategy tool used to evaluate firm’s internal environment and to reveal its strengths as well as weaknesses. Page 20

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

AIR ASIA KEY INTERNAL FACTOR STRENGTH Point to point frequency Border target market First movers (experience advantage) Brand image Huge destination coverage State to the art fleet Financial resources Competitive staff Monopoly WEAKNESS Corruption Dysfunctional structure Strong domestic competition with airlines Non professionalism Strong union hold Bad location of resources Government influence Over staffing Low awards and appraisals Debt TOTAL

Weights 0.0 to 1.0

Rating

Weighted score

0.07 0.08 0.02 0.2 0.04 0.07 0.08 0.02 0.06

3 3 4 5 4 4 4 4 3

0.21 0.24 0.08 1 0.16 0.28 0.32 0.08 0.18

0.05 0.04 0.04 0.05 0.04 0.05 0.02 0.03 0.02 0.02 1

2 3 4 2 3 3 1 1 1 3

0.1 0.12 0.16 0.1 0.12 0.15 0.02 0.03 0.02 0.06 3.43

Weights 0.0 to 1.0

Rating

Weighted score

0.07 0.08 0.02 0.2 0.04 0.07 0.08 0.02 0.06

2 3 3 3 4 3 3 3 4

0.14 0.24 0.06 0.6 0.16 0.21 0.24 0.06 0.24

0.05

4

0.2

Table 2.4.2 IFE of Air Asia MALAYSIA AIRLINE KEY INTERNAL FACTOR STRENGTH Point to point frequency Border target market First movers (experience advantage) Brand image Huge destination coverage State to the art fleet Financial resources Competitive staff Monopoly WEAKNESS Corruption

Page 21

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

Dysfunctional structure Strong domestic competition with airlines Non professionalism Strong union hold Bad location of resources Government influence Over staffing Low awards and appraisals Debt TOTAL

0.04 0.04 0.05 0.04 0.05 0.02 0.03 0.02 0.02 1

3 3 3 2 3 2 3 4 4

0.12 0.12 0.15 0.08 0.15 0.04 0.09 0.08 0.08 3.06

Table 2.4.1 IFE of Malaysia Airline 2.5 EFE EFE Matrix is an analytical technique related to the SWOT analysis. EFE is an acronym of the External Factor Evaluation. EFE Matrix evaluates the external position of the organization or its strategic intents. AIR ASIA KEY EXTERNAL FACTOR OPPORTUNITIES Subsidy on oil prices Ability to have maximum fleet and route Increasing number of airport Air crash of other airlines Changing customer trends Low cost barrier Industry recovery predicted Better recruitment policy Globalization of speed-ex THREAT Increase in interest rates Increasing oil prices globally New entrants Inflation Privatization Tourism threat Time consumed by embassy for the visa Devalue of currency TOTAL

Weights 0.0 to 1.0

Rating

Weighted score

0.03 0.02 0.01 0.05 0.10 0.01 0.05 0.03 0.02

3 4 4 4 3 5 3 3 3

0.09 0.08 0.04 0.2 0.3 0.05 0.15 0.09 0.06

0.04 0.20 0.02 0.20 0.07 0.03 0.02 0.10 1

2 3 2 3 2 3 2 3

0.08 0.6 0.04 0.6 0.14 0.09 0.04 0.3 2.95 Page 22

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

Table 2.5.1 EFE of Air Asia MALAYSIA AIRLINE KEY EXTERNAL FACTOR OPPORTUNITIES Subsidy on oil prices Ability to have maximum fleet and route Increasing number of airport Air crash of other airlines Changing customer trends Low cost barrier Industry recovery predicted Better recruitment policy Globalization of speed-ex THREAT Increase in interest rates Increasing oil prices globally New entrants Inflation Privatization Tourism threat Time consumed by embassy for the visa Devalue of currency TOTAL

Weights 0.0 to 1.0

Rating

Weighted score

0.03 0.02 0.01 0.05 0.10 0.01 0.05 0.03 0.02

2 3 3 3 3 4 3 3 3

0.06 0.06 0.03 0.15 0.3 0.04 0.15 0.09 0.06

0.04 0.20 0.02 0.20 0.07 0.03 0.02 0.10 1

1 3 2 2 2 3 2 3

0.04 0.6 0.04 0.4 0.14 0.09 0.04 0.3 2.59

Table 2.5.2 EFE of Malaysia Airline

Page 23

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

CHAPTER THREE: BUSINESS MATRIX 3.1 SPACE MATRIX The SPACE matrix is a management tool used to analyze a company. It is used to determine what type of a strategy a company should undertake. The Strategic Position & Action Evaluation matrix or short a SPACE matrix is a strategic management tool that focuses on strategy formulation especially as related to the competitive position of an organization. AIR ASIA FINANCIAL STRENGTH (FS)

RATINGS

Return on Asset

1

Leverage

1

Net Income

2

Net Asset

2

Return on Equity

1

FINANCIAL STRENGTH

ENVIRONMENTAL STABILITY (ES)

1.4

RATINGS

Rate of Inflation

-4

Technological Changes

-3

Price Elasticity of Demand

-3

Competitive Pressure

-6

Barrier to entry into the Market

-2

ENVIRONMENTAL STABILITY

-3.6

Page 24

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE COMPETITIVE ADVANTAGES (CA)

RATINGS

Market Share

-3

Product Quality

-2

Customer Loyalty

-2

Technological Know-How

-1

Control Over Supplier and Distributor

-2

COMPETITIVE ADVANTAGES

-2

INDUSTRY STRENGTH (IS)

RATINGS

Growth Potential

5

Financial Stability

3

Ease of entry into the Market

6

Resources Utilization

3

Profit Potential

4

INDUSTRY STRENGTH

4.2

X – axis (CA + IS)

(-2) + 4.2 =

2.2

Y – axis (ES + FS)

(-3.6) + 1.4 =

-2.2

Page 25

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

Graph 3.1.1 SPACE Matrix of Air Asia MALAYSIA AIRLINE FINANCIAL STRENGTH (FS)

RATINGS

Return on Asset

1

Leverage

1

Net Income

1

Net Asset

1

Return on Equity

1

FINANCIAL STRENGTH

0.9

Page 26

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE ENVIRONMENTAL STABILITY (ES)

RATINGS

Rate of Inflation

-2

Technological Changes

-2

Price Elasticity of Demand

-2

Competitive Pressure

-4

Barrier to entry into the Market

-1

ENVIRONMENTAL STABILITY

COMPETITIVE ADVANTAGES (CA)

-2.5

RATINGS

Market Share

-2

Product Quality

-1

Customer Loyalty

-1

Technological Know-How

-1

Control Over Supplier and Distributor

-3

COMPETITIVE ADVANTAGES

-1

INDUSTRY STRENGTH (IS)

RATINGS

Growth Potential

4

Financial Stability

2

Ease of entry into the Market

5

Resources Utilization

2

Profit Potential

3

INDUSTRY STRENGTH

3.5

Page 27

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE X – axis (CA + IS)

(-1) + 3.5 =

2.5

Y – axis (ES + FS)

(-2.5) + 0.9 =

-1.6

Graph 3.1.2 SPACE Matrix of Malaysia Airline 3.2 BCG MATRIX BCG matrix (or growth-share matrix) is a corporate planning tool, which is used to portray firm’s brand portfolio or SBUs on a quadrant along relative market share axis (horizontal axis) and speed of market growth (vertical axis) axis.

Page 28

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

Figure 3.2.1 BCG Matrix of Air Asia and Malaysia Airline Based on Figure 3.2.1, it shows the BCG Matrix of Air Asia and Malaysia Airline. On Air Asia company, the market share is high along with it business growth rate which is also is growing. While on Malaysia Airline company, the market share is high but the business growth rate is low. This is because Malaysia Airline is company own by government, which is a benchmark airline of Malaysian country, that’s why the company already get a high market share. However, the existing of many competitors, such as Air Asia, makes Malaysia Airline become more lower in business growth market.

Page 29

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

3.3 IE MATRIX The Internal-External (IE) matrix is another strategic management tool used to analyze working conditions and strategic position of a business. The Internal External Matrix or short IE matrix is based on an analysis of internal and external business factors which are combined into one suggestive model. AIR ASIA Internal Factor Evaluation (IFE)

3.43

External Factor Evaluation (EFE)

2.95

Figure 3.3.1 IE Matrix of Air Asia Based on the figure above, Air Asia company is at IV column which mean that the company is still growing and building.

Page 30

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

MALAYSIA AIRLINE Internal Factor Evaluation (IFE)

3.06

External Factor Evaluation (EFE)

2.59

Figure 3.3.2 IE Matrix of Malaysia Airline Based on the figure above, Malaysia Airline company is at IV column which mean that the company is still growing and building same as Air Asia company.

Page 31

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

3.4 GRAND STRATEGY MATRIX A grand strategy matrix consists of a four-quadrant graph, similar to a SWOT matrix, which lists strategic options for companies in either strong or weak competitive positions in industries experiencing either rapid or slow growth. Unlike a SWOT matrix, a grand strategy matrix reveals strategic options for virtually any business in a given industry within any stage of the industry's life cycle. In the quadrant corresponding to slow industry growth and a strong competitive position, for example, options such as new-product development and merging with other companies can be listed, but these options will not apply to companies with weaker competitive positions. Accurately gauging a company's competitive strength and the growth rate of its industry is a key to gaining the most relevant insights from this tool. At the same time, the quadrants that do not apply to a specific company can still be useful, as they can reveal the strategic options available to stronger or weaker competitors or the options available to a company if it enters a different industry. AIR ASIA

Page 32

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

Figure 3.4.1 Grand Strategy Matrix of Air Asia Based on the Grand Strategy Matrix of Air Asia company, it can be said that Air Asia has strong competitive position and rapid market growth, where the company is at quadrant 1. It has product and market development, market penetration, backward integration, forward integration and concentric diversification. MALAYSIA AIRLINE

Figure 3.4.2 Grand Strategy Matrix of Malaysia Airline Based on the Grand Strategy Matrix of Malaysia Airline company, it can be said that Malaysia Airline has strong competitive position and rapid market growth, where the company is at quadrant 1. It has product and market development, market penetration, backward integration, forward integration and concentric diversification.

Page 33

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

3.5 QSPM MATRIX The Quantitative Strategic Planning Matrix is a strategic tool which is used to evaluate alternative set of strategies. The QSPM incorporate earlier stage details in an organize way to calculate the score of multiple strategies in order to find the best match strategy for the organization. The QSPM comes under the third stage of strategy formulation which is called “The Decision Stage” and also the final stage of this process. The best thing about QSPM is that it never insist the strategist to enter the information on assumptions, it extract the information from stage 1 The Input Stage and stage 2 the matching stage. The input stage is based on EFE Matrix, IFE Matrix and CPM and stage 2 made up of TOWS matrix, SPACE Matrix, BCG Matrix, IE Matrix, Grand Strategy Matrix. The QSPM combine the intuitive thinking of managers with the analytical process to decide the best strategy for the organization success. AIR ASIA Market Development Key Factors

Market Penetration

Weight

AS

TAS

AS

TAS

Subsidy on oil prices

0.03

3

0.09

4

0.12

Ability to have maximum fleet and route

0.02

4

0.08

2

0.04

Increasing number of airport

0.01

4

0.04

3

0.03

Air crash of other airlines

0.05

4

0.2

4

0.2

Changing customer trends

0.10

3

0.3

3

0.3

Low cost barrier

0.01

5

0.05

2

0.02

Industry recovery predicted

0.05

3

0.15

1

0.05

OPPORTUNITIES

Page 34

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

Better recruitment policy

0.03

3

0.09

3

0.09

Globalization of speed-ex

0.02

3

0.06

2

0.04

Increase in interest rates

0.04

2

0.08

1

0.04

Increasing oil prices globally

0.20

3

0.6

2

0.4

New entrants

0.02

2

0.04

2

0.04

Inflation

0.20

3

0.6

3

0.6

Privatization

0.07

2

0.14

4

0.28

Tourism threat

0.03

3

0.09

4

0.12

Time consumed by embassy for the visa

0.02

2

0.04

3

0.06

Devalue of currency

0.10

3

0.3

2

0.2

THREATS

SUB-TOTAL

Key Factors

1.00

2.63

2.95

Weight

AS

TAS

AS

TAS

Point to point frequency

0.07

3

0.21

3

0.21

Border target market

0.08

3

0.24

4

0.32

First movers (experience advantage)

0.02

4

0.08

3

0.06

Brand image

0.2

5

1

3

0.6

Huge destination coverage

0.04

4

0.16

3

0.12

STRENGTH

Page 35

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

State to the art fleet

0.07

4

0.28

5

0.35

Financial resources

0.08

4

0.32

5

0.4

Competitive staff

0.02

4

0.08

3

0.06

Monopoly

0.06

3

0.18

4

0.24

Corruption

0.05

2

0.1

2

0.1

Dysfunctional structure

0.04

3

0.12

1

0.04

Strong domestic competition with airlines

0.04

4

0.16

4

0.16

Non professionalism

0.05

2

0.1

3

0.15

Strong union hold

0.04

3

0.12

2

0.08

Bad location of resources

0.05

3

0.15

3

0.15

Government influence

0.02

1

0.02

1

0.02

Over staffing

0.03

1

0.03

3

0.09

Low awards and appraisals

0.02

1

0.02

2

0.04

Debt

0.02

3

0.06

2

0.04

WEAKNESESS

SUB-TOTAL

1.00

3.43

3.23

Table 3.5.1 QSPM Matrix of Air Asia

Page 36

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

MALAYSIA AIRLINE Market Development Key Factors

Market Penetration

Weight

AS

TAS

AS

TAS

Subsidy on oil prices

0.03

2

0.06

1

0.03

Ability to have maximum fleet and route

0.02

3

0.06

2

0.04

Increasing number of airport

0.01

3

0.03

2

0.02

Air crash of other airlines

0.05

3

0.15

2

0.1

Changing customer trends

0.10

3

0.3

2

0.2

Low cost barrier

0.01

4

0.04

3

0.03

Industry recovery predicted

0.05

3

0.15

2

0.1

Better recruitment policy

0.03

3

0.09

2

0.06

Globalization of speed-ex

0.02

3

0.06

2

0.04

Increase in interest rates

0.04

1

0.04

2

0.08

Increasing oil prices globally

0.20

3

0.6

3

0.6

New entrants

0.02

2

0.04

1

0.02

Inflation

0.20

2

0.4

2

0.4

Privatization

0.07

2

0.14

1

0.07

Tourism threat

0.03

3

0.09

2

0.06

OPPORTUNITIES

THREATS

Page 37

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

Time consumed by embassy for the visa

0.02

2

0.04

3

0.06

Devalue of currency

0.10

3

0.3

2

0.2

SUB-TOTAL

Key Factors

1.00

Weight

2.11

2.59

AS

TAS

AS

TAS

STRENGTH Point to point frequency

0.07

2

0.14

1

0.07

Border target market

0.08

3

0.24

2

0.16

First movers (experience advantage)

0.02

3

0.06

2

0.04

Brand image

0.2

3

0.6

2

0.4

Huge destination coverage

0.04

4

0.16

3

0.12

State to the art fleet

0.07

3

0.21

2

0.14

Financial resources

0.08

3

0.24

2

0.16

Competitive staff

0.02

3

0.06

2

0.04

Monopoly

0.06

4

0.24

3

0.18

Corruption

0.05

4

0.2

3

0.15

Dysfunctional structure

0.04

3

0.12

2

0.08

WEAKNESESS

Page 38

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

Strong domestic competition with airlines

0.04

3

0.12

2

0.08

Non professionalism

0.05

3

0.15

2

0.1

Strong union hold

0.04

2

0.08

1

0.04

Bad location of resources

0.05

3

0.15

2

0.1

Government influence

0.02

2

0.04

1

0.02

Over staffing

0.03

3

0.09

2

0.06

Low awards and appraisals

0.02

4

0.08

3

0.06

Debt

0.02

4

0.08

3

0.06

SUB-TOTAL

1.00

3.06

2.06

Table 3.5.2 QSPM Matrix of Malaysia Airline

Page 39

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

CHAPTER FOUR: AIR ASIA VS MALAYSIA AIRLINE 4.1 COMPARISON & CONCLUSION Based on the Porter’s Five Model, SWOT Analysis, CPM, IFE, EFE, SPACE Matrix, BCG Matrix, IE Matrix, Grand Strategy Matrix, and QSPM Matrix, it can be conclude that Air Asia company having a great strategy company to Malaysia Airline. This can be justify by the result on every strategy that being implemented on all of the assignment content. Malaysia Airline precisely a main airline in Malaysian country. However, Tony Fernandes practically can manage Air Asia brand into a main competitor towards Malaysia Airline. By having a low cost air fare, they gain many demand among customers who loves to travel in a budget. They also have their class by dividing a standard if the passenger wanted a business class treatment like Malaysia Airline.

All of these strategies can be used by the top management to organize their company very well in the future. On Porter’s Five Model, technically it compare on Air Asia and Malaysia Airline on their competition intensity, attractiveness and profitability of an industry or market which is can be said that Air Asia mostly more competition intensity, attractive and profitable compare to Malaysia Airline.

On the SWOT Analysis, it is being list on the strength, weakness, threat and opportunities of each of company. Each of Air Asia and Malaysia Airline company having their own company SWOT that can be measure in order to achieve a competitive advantages in the future.

Page 40

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

Looked onto CPM, IFE and EFE weighted score, Air Asia respectively have the highest score in all the CPM, IFE, EFE which is 3.65, 3.43 and 2.95. Compare to Malaysia Airline which is the weighted score only 3.5, 3.06 and 2.59. So based on the weighted score on every evaluation, it can be said that Air Asia is most compatible compare to Malaysia Airline.

Move into the matrix, based on the SPACE Matrix, BCG Matrix, IE Matrix, Grand Strategy Matrix, and QSPM Matrix. Each of the company which is Air Asia and Malaysia Airline, is likely the same because both of the company are very high developing and high building from time to time. However Malaysia Airline a little bit slower compare to Air Asia which is fast moving brand name which already being awarded as best ASEAN Airline company.

Malaysia Airline need to find out on the Air Asia strategy by looking into their company weaknesses so that they can back on track by competing with Air Asia. By buying a Fireflyz which is a small airplane to compete on Air Asia low cost, it is one of the best Malaysia Airline strategy. However, they still behind on the line because Air Asia having a strategy on giving a free seat, and very cheaper cost compare to Fireflyz also.

Page 41

BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

5.0 REFERENCES

BIBLIOGRAPHY

Resourcing Team, People Department. (2011, April.). Jumpstart Malaysia, The Air Asia Definitive

Guide

To

Malaysia,

Truly

Asia.

Retrieved

from

Air

Asia

Portal:

https://www.airasia.com/common/pdf/JusmStart-Malaysia.pdf Our

Story.

(n.d.).

Retrieved

from

Malaysia

Airline::

https://www.malaysiaairlines.com/in/en/about-us/our-story.html Porter, M.E. (2008). The Five Competitive Forces That Shape Strategy. Harvard Business Review.

Retrieved

from

https://www.strategicmanagementinsight.com/tools/porters-five-

forces.html SWOT Analysis For Air Asia Strength Management Essay (2015, March 23). Retrieved from https://www.ukessays.com/essays/management/swot-analysis-for-air-asia-strengthsmanagement-essay.php Critical

Path

Method

(CPM).

(2015,

January).

Retrieved

from

http://whatis.techtarget.com/definition/critical-path-method-CPM Ovidijus

Jurevicius.

(2015,

January).

IFE

&

EFE

Matrices.

Retrieved

from

Retrieved

from

https://www.strategicmanagementinsight.com/tools/ife-efe-matrix.html Ovidijus

Jurevicius.

(2013,

May

1).

BCG

growth-share

matrix.

https://www.strategicmanagementinsight.com/tools/bcg-matrix-growth-share.html SPACE Matrix Strategic Management Method. (n.d). Retrieved from http://www.maxipedia.com/space+matrix+model+strategic+management+method Internal-External

(IE)

Matrix.

(n.d).

Retrieved

from

http://www.maxi-

pedia.com/internal+external+ie+matrix

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BUSINESS STRATEGY AIR ASIA VERSUS MALAYSIA AIRLINE

David Ingram. (n.d). Link Between the SWOT Matrix & the Grand Strategy Matrix. Retrieved from http://smallbusiness.chron.com/between-swot-matrix-grand-strategy-matrix-77953.html Arthur A. Thompson. Margaret A. Peteraf. John E. Gamble. A.J. Strickland III. McGraw Hill Education. (2016). Crafting and Executing Strategy. The Quest For Competitive Advantage. Concept and Cases.

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