PAST YEAR EXAMINATION

OCTOBER 2009 (PART D)

1) Identify five (5) of competitive advantages used by AirAsia?  (5 marks)
     - Developing new products or services.
     - Entering new markets.
     - Increasing customer loyalty.
     - Decreasing costs.
     - Attracting new customers.

2) Which of the Porter's generic strategies were applied by AirAsia in the case study and
     explain with example. (6 marks)
    

     The Porter's generic strategies were applied by AirAsia is cost leardership.Cost leadership is  has

     a low cost and broad market.AirAsia competes by offering a broad range of products at low price.

     Its business strategy is to be low-cost provider of goods for the cost-conscious consumer.For

     example,AirAsia operates scheduled domestic and international flights and Asia's largest low

     fare,no frills airline.AirAsia pioneered low cost trvelling in Asia. 

 

3) Based on Porter's Five Force Model,analyze AirAsia buyer power and supplier power.(9 

    marks)

 

   Porter's Five Force Model divided by five is buyer power,supplier power,threat of substitute

   product or services,threat new entarant and rivalry among existing competitors.

 

  Buyer power is the ability of buyer to affect the price they must pay for an item.For

  example,AirAsia operates with the world's lowest unit cost of US$ 0.023/ASK(available set per

  kilometer) and a passenger break-even load factor of 52% .

 

 Supplier power is the suppliers' ability to influence the prices they charge for supplies(including  

 materials,labour,and services).For example,AirAsia currently the main customer of the Airbus

 A320.The company has placed and order of 175 units of the same plane to service its routes.