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Organisational logistics and organizational management - Essay Example

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Executive Summary AirAsia is a regional airline serving Malaysia and south-east Asian destinations. In this report a strategic analysis of AirAsia has been done to provide recommendations to company for its future business growth and success. To analyze the current issues and challenges faced by the company, McKinsey’s 7S framework has been used…
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Organisational logistics and organizational management
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Download file to see previous pages Low-cost philosophy and family culture are two major shared values of the organization and these values are reflected in all the processes and systems of the organization. The company has a flat structure which allows job sharing, high employee motivation and low labor costs. The company’s adherence to low-cost carrier model appears to be a distinctive organization skill which allows the company to focus on its future growth strategies. PESTLE framework has been used to analyze the external business environment of AirAsia including the political, economic, social, technological, legal and environmental factors that influence the business. The analysis shows that political factors like increased government investments and supportive regulatory environment are favorable for the company whereas, increasing foreign government restrictions hinder future growth strategy of AirAsia. The current economic downturn, increasing fuel costs and volatile exchange rates are creating challenges for the company however, the increasing trade within and into Asia creates opportunities for company. Social factors including population growth, customers’ willingness to accept low-cost air travel and increasing tourism positively influence the operations of AirAsia. The technological developments allow AirAsia to improve its services by providing more convenience to customers. Although AirAsia faces strong environment challenges however, adherence of company to legal requirements allows company to meet all these challenges. Following this a SWOT analysis has been done to analyze the current strengths, weaknesses, opportunities and threats of AirAsia. The successful implementation of low-cost business model, specific growth strategies, government support and skilled staff are few major strengths of AirAsia whereas, increased operational complexity, poor decision-making and cost-focused human resource management system are major weaknesses of the company. It has been identified that increasing travel demand as a result of increasing population growth and tourism, Open Skies Agreement and influence of social media in industry are major opportunities for AirAsia. Nevertheless, new entrants, over capacity, price war, fuel prices volatility and environmental concerns pose major threats for the company. Following SOWT analysis, four solutions have been identified for AirAsia including fuel hedging, new and standardized aircraft fleet, airport ownership and long-haul travel. Finally recommendations relevant to employee management and motivation and customer relationship management have been provided to AairAsia. Introduction AirAsia is a Malaysian low-cost airline which offers low cost travel to its customers. The company has adopted a low-cost business model and it is the Asia’s largest airline which offers no-frill services (Kurlantzick, 2007). The company was established with an aim to make flying affordable for everyone and today its network covers more than 20 countries. The company has been able to achieve success in the highly competitive low cost aviation industry through efficient procedures and systems, innovative solutions and passionate approach towards business processes ( AirAsia Group consists of associated companies which have same strategies and approach. These associated companies include AirAsia X, Indonesia AirAsia and Thai AirAsia. By ...Download file to see next pagesRead More
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