FUNDAMENTAL OF MANAGEMENT (FOM)

GROUP REPORT ASSIGNMENT

DDM0302

PREPARED BY

NO NAME NO ID SECTION
1 NUR SHARMINEE NATASHA BINTI MOHD IPN213110036 DDM0302
SHAMSUL SHAH
2 ALYA MAISARAH BINTI MOHAMAD IPN213110078 DDM0302
HALIM
3 AHMAD SAIFUDDIN BIIN RAZALI IPN213110078 DDM0302
4 MUHAMMAD ALIF HAFIZZAL BIN HILMY IPN213110044 DDM0302
5 HAIRI IZZUDIN BIN MOHD FAUZI IPN213110081 DDM0302

PREPARED FOR

MADAM FARAH BINTI ZULKIFLI

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 TOPIC OF CONTENT

1. INTRODUCTION………………………………………………………………... 3
2. BACKGROUND COMPANY………………………………………………….…3
3. SWOT………………………………………………………………………….…. 4
4. STRENGTH…………………………………………………………………….…5
4.1 STEADY AND CONSISTENT POSITIONING………………………….…5
4.2 WEEKLY FLIGHTS………………………………………………............... 5
4.3 EXTENSIVE COVERAGE IN INDIA ………………………………………5
4.4 INNOVATION IN SERVICE ………………………………………………. 5
4.5 SUCCESSFUL COST – CUTTING …………………………………….... 5
5. WEAKNESS……………………………………………………………………... 6
5.1 SUSTAINING COST……………………………………………..................6
5.2 LOW PROFITS …………………………………………………................. 6
5.3 CHALLENGES IN BALANCING SERVICE QUALITY ……...………….. 6

6. OPPORTUNITY…………………………………………………………………… 7

6.1 SURGE IN OVERSEAS TRAVEL………………………………………... 7

6.2 LLC POSITION……………………………………………………….……. 7

6.3 INDIAN MARKET…………………………………………………………... 7

7. THREAT……………………………………………………………………………. 8

7.1 COMPETITION…………………………………………………………….. 8

7.2 MANAGEMENT OF COSTS……………………………………………… 8

8. SUGGESTION/RECOMMENDATION…………………………………………… 9

8.1 DISPLAY INFORMATION………………………………………………… 9

8.2 PROVIDE BIGGER SPACE………………………………………………. 9

8.3 INFORMATION OF FLIGHT DELAYS…………………………………… 9

9. CONCLUSION………………………………………………………………………. 10

9.1 THEORIES…………………………………………………………………..

10. REFERENCES……………………………………………………………………… 10

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 1. INTRODUCTION

First and foremost, our group has decided to write about AirAsia for this group report. AirAsia
is a successful Malaysian airline that operates domestic and international passenger and
cargo flights. In this report, we will discuss the company's background and also apply SWOT
analysis to this company to analyse what their internal strengths and weaknesses are, as
well as their external opportunities and threats. And we'll talk about the suggestions or
recommendations we have for this company's upcoming or future improvements. For the
conclusion, we will apply some theories from the Fundamentals of Management chapter that
we have already learned in class.

2. BACKGROUND COMPANY

Air Asia established in 1993 with commenced operations in 1996. In 2001, Tune Air Sdn Bhd
(Tony Fernandes’s company) purchased this airline from DRB-Hicom. AirAsia never look
back after that. AirAsia’s first and main base is the Low Cost Carrier Terminal (LCCT) at
Kuala Lumpur International Airport, while its secondary hubs are at Kota Kinabalu
International Airport, Senai International Airport and Penang International Airport. AirAsia is
well known as Malaysian low cost airline and even Asia’a largest low fare, no frills airline.
The airlines claims ‘No Admin Fee’, but has some fees for services which are free on other
airlines. AirAsia slogan is ‘Now Everyone Can Fly’ .Being the home of AirAsia, the LCCT is
the budget terminal in KLIA, opened on 23 March 2006. LCCT is said to be carried about 10
million passengers a year. The AirAsia subsidiaries are the likes of Thai AirAsia, Indonesia
AirAsia, VietJet AirAsia and AirAsia RedTix. Meanwhile, AirAsia associate companies are
AirAsia X, Tune Hotel and Tune Money.

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 3. SWOT

What is SWOT Analysis

SWOT analysis is a technique developed at Stanford in the 1970s, frequently used in

strategic planning. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and
Threats and is a structured planning method that evaluates those four elements of an
organization, project or business venture. A SWOT analysis is a simple, but powerful,
framework for leveraging the organization's strengths, improving weaknesses, minimizing
threats, and taking the greatest possible advantage of opportunities. A SWOT involves
identifying the strengths and weaknesses of the organization, and opportunities and threats
present in the market that it operates in. It can be used for studying various situation of a
business

The SWOT analysis will help you understand the company's position which will encourages
ideas and decision-making on how to build on strengths, exploit opportunities, minimize
weaknesses and protect against threats.

SWOT analysis of Air Asia

Air Asia is a low-cost airline with its headquarters in Malaysia. In Kuala Lumpur. The biggest
airline in Malaysia the company is widely regarded as being highly focused on its
employees. Comparatively to its competitors, Air Asia is credited with having the lowest cost
operating at the cost per seat of US$0.023 per seat kilometer of available seats (ASK) and
an average load factor for passengers of 52 percent. Air Asia operates flights to
approximately 165 destinations, which include domestic as well as international flights with
the that is 92. The airline operates four subsidiaries which include Air Asia X, Indonesia Air
Asia X, Indonesia Air Asia, and Thai Air Asia.

The airline, which was put in 1993 began its operations in 1996. It is an extremely new
airline. It has been awarded numerous times. Air Asia has been consecutively recognized as
the most reputable low-cost airline across the Asian region. The company had annual
revenue that was USD 1.12 billion in 2017. Currently, it employs approximately 17,000
workers.

SWOT Analysis Of Air Asia is brand-based. SWOT Analysis of Air Asia evaluates the
brand’s strengths, weaknesses, opportunities, and threats. Advantages and disadvantages
can be attributed to internal factors while opportunities and threats can be attributed to
external factors. We will be discussing Air Asia’s SWOT Analysis. Below is the detailed
SWOT Analysis of Air Asia.

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 4. Strengths in the SWOT analysis of Air Asia

Strengths are defined as what each business does best in its gamut of operations which can
give it an upper hand over its competitors. The following are the strengths of Air Asia :

4.1 Steady and Consistent positioning

Air Asia has been positioned as a low-cost airline The airline has been successful in
ensuring that they consistently keep their operating costs as low as possible and this means
that the benefits of this trickle into the pricing.

4.2 Weekly flights

Through customer research, Air Asia realized that many customers travel from Trichy to
Chennai and then onward to Kuala Lumpur, Singapore, and Bangkok which was proving to
be expensive. This made the airlines start weekly flights to Kuala Lumpur priced as low as
Rs 12000 as return fare in comparison to Rs 21,000 of other airlines.

4.3 Extensive coverage in India

Air Asia was quick to realize the huge prospect that India offered and thus moved into the
region. The airline operates around 120 flights to India connecting various key destinations
and ensuring that economic travel option is offered to customers.

4.4 Innovation in service

Air Asia has been using cutting-edge technologies for innovation. Some of their service
innovation include online ticket reservation printing and even e-check-in. The airline has also
been streamlining costs by replacing human effort with technology through online services.

4.5 Successful cost-cutting

Air Asia is a low-cost airline and they have taken all possible measures to cut down on costs.
One strategy that has been followed by the airline is to transfer the onus of service to the
customer making most of the work as self-service.

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 5. Weaknesses in the SWOT analysis of Air Asia

Weaknesses are used to refer to areas where the business or the brand needs
improvement. Some of the key weaknesses of Air Asia are:

5.1 Sustaining costs

Air Asia is a low-cost airline and thus it is critical that the airlines keep its operating costs as
low as possible. With fluctuations in fuel costs and increase in service costs, the airlines find
it immensely challenging to keep their costs as low as possible.

5.2 Low Profits

In order to keep their positioning of a low-cost carrier Air Asia keeps their pricing as low as
possible and thus rely completely on volumes for their profits which in turn has resulted in
lowering the profits as well as reduced continuous revenue inflows.

5.3 Challenges in balancing service quality with pricing

The USP of Air Asia is the low-cost carrier image it carries. However, customers are not
willing to compromise on quality just because they charge low and satisfaction is based on
the quality of services. The airline thus finds it challenging to balance the quality with pricing
and it has been alleged that compromise on quality.

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6 Opportunities in the SWOT analysis of Air Asia

Opportunities refer to those avenues in the environment that surrounds the business on
which it can capitalize to increase its returns. Some of the opportunities include:

6.1 Surge in overseas travel

In Asia where Air Asia is based out of there has been a surge in business travel.
Destinations like Singapore, Malaysia, and Bangkok are popular in the world tourist map and
vacation seasons also see a surge in pleasure travel. These are opportunities that the airline
can capitalize on.

6.2 LLC POSITION

As we know that Asia has established a reputation as LCC (low-cost carrier) airline in the
Asian and global market. It would be a strong competitive edge to AirAsia after the pandemic
of covid-19 because the purchasing power of the people has dropped significantly. The
airline brand should exploit these circumstances.

6.3 INDIAN MARKET

The Indian market is highly price-conscious. The airline company has already got a
subsidiary AirAsia India for the local market. Now, the brand should amplify its marketing
and promotional campaigns to attract the Indian price-conscious market. Since AirAsia is a
low-cost airline and the Indian market is price-conscious, it would be a win-win situation for
both.

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7 Threats in the SWOT analysis of Air Asia

Threats are those factors in the environment which can be detrimental to the growth of the
business. Some of the threats include:

7.1 Competition

The company faces a lot of competition from brands such as Air India, Singapore Airlines,
Virgin Airlines

7.2 Management of costs

Air Asia is finding it immensely difficult to manage the fluctuations in costs of fuel and also to
maintain its vast fleet of aircraft. The management of costs across time is the most critical
challenge that the airline faces.

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8. SUGGESTION/RECOMMENDATION

8.1 Display information

Air Asia should display information on gate numbers for flight departures because it would
be useful for the notice boards to also display counter numbers for checking in as this would
greatly simplify and improve the efficiency of checking inthat causes inconvenience for
people due to overcrowding and general lack of space.

8.2 Provide bigger space

AirAsia’s seat is small, tight and very uncomfortable and it seems like they are trying to
install more seats into their planes by using smaller chairs so they can maximize their
income so, our suggestion is that they should provide bigger space and more comfortable
seat so that their customer is more comfortable while on plane.

8.3 Information of flight delays

We think that Air Asia should inform their customers on flight delays aslong journeys create
exhausting journey for customer. It will also lead to customer dissatisfaction if they delay the
flights without notifying their customers so, our suggestions for Air Asia to overcome this is to
inform customers beforehand via textmessages or e-mails.

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9. CONCLUSION

First and foremost, our group has decided to write about AirAsia for this group report. Air
Asia established in 1993 with commenced operations in 1996. AirAsia never look back after
that. SWOT analysis is a technique developed at Stanford in the 1970s, frequently used in
strategic planning. It can be used for studying various situation of a business. Air Asia is a
low-cost airline with its headquarters in Malaysia. In Kuala Lumpur. The airline, which was
put in 1993 began its operations in 1996. It is an extremely new airline. SWOT Analysis Of
Air Asia is brand-based. Strengths in the SWOT analysis of Air Asia. Strengths are defined
as what each business does best in its gamut of operations which can give it an upper hand
over its competitors. The following are the strengths of Air Asia :. Through customer
research, Air Asia realized that many customers travel from Trichy to Chennai and then
onward to Kuala Lumpur, Singapore, and Bangkok which was proving to be expensive. This
made the airlines start weekly flights to Kuala Lumpur priced as low as Rs 12000 as return
fare in comparison to Rs 21,000 of other airlines. Air Asia was quick to realize the huge
prospect that India offered and thus moved into the region. Air Asia has been using cutting-
edge technologies for innovation. Air Asia is a low-cost airline and they have taken all
possible measures to cut down on costs. Weaknesses in the SWOT analysis of Air Asia.
Weaknesses are used to refer to areas where the business or the brand needs
improvement. Some of the key weaknesses of Air Asia are:. Air Asia is a low-cost airline and
thus it is critical that the airlines keep its operating costs as low as possible. The USP of Air
Asia is the low-cost carrier image it carries. Opportunities refer to those avenues in the
environment that surrounds the business on which it can capitalize to increase its returns.
Some of the opportunities include:. In Asia where Air Asia is based out of there has been a
surge in business travel. These are opportunities that the airline can capitalize on. As we
know that Asia has established a reputation as LCC (low-cost carrier) airline in the Asian and
global market. The airline brand should exploit these circumstances. The Indian market is
highly price-conscious. Threats are those factors in the environment which can be
detrimental to the growth of the business. Some of the threats include:. Air Asia is finding it
immensely difficult to manage the fluctuations in costs of fuel and also to maintain its vast
fleet of aircraft. The management of costs across time is the most critical challenge that the
airline faces. We think that Air Asia should inform their customers on flight delays aslong
journeys create exhausting journey for customer.

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9.1 THEORIES

Theories/Models/Frameworks/Assumptions that related to Leadership in

OrganizationalSettings

Transformational Leadership Model

According to McShane & Von Glinow, transformational leadership is a leadership

perspective that describes how leaders modify teams by creating, communicating, and
modelling a vision for the organization and inspiring employees to fight for the vision. It
involves a committed relationship between leader and followers. There are 4 components in
this model which are idealized influence, inspirational motivation, intellectual stimulation, and
individualized consideration. In idealized influence, leaders act as role models to employees.
This can be shown through their willingness to take risks and follow a core set of values in
the action. The leader should build trust on his followers. As a result, followers will develop
confidence on their leaders. In intellectual stimulation, leaders value creativity and autonomy
of followers. Leaders should involve them in decision making process and stimulate their
creativity and innovative mind to identify solutions. They challenge assumptions from
followers and help followers by changing their way of thinking. For inspirational motivation,
leaders shall be able to inspire confidence, motivation and sense of purpose on followers.
Leaders shall articulate clear vision of future, communicate expectations and demonstrate
commitment to the goals set. This required excellent communication skills to spread his
ideas with precision and power. Lastly, in individualized consideration, leaders shall
recognize needs of followers through eavesdropping or observation. Opportunities for
customized training sessions for each individual member shall be provided through one-on-
one coaching and mentoring. These activities help members to grow and motivated.

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10. REFERENCES

https://www.marketing91.com/swot-analysis-of-air-asia/

https://swotandpestleanalysis.com/swot-analysis-of-airasia/

https://bsmarketingstrategy.com/air-asia-swot-analysis/

https://malaysia.search.yahoo.com/search?fr=mcafee-
malaysia&type=E211MY826G91666&p=what+is+swot+analysis

https://www.visual-paradigm.com/guide/strategic-analysis/what-is-swot-analysis/

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