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Strategic Marketing Plan - Research Paper Example

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Air Asia is currently going through the preliminary merger processes with Malaysian Airlines and Air Asia X, as the business attempts to diversify its competitive advantages. Air Asia X is currently a low-performing carrier in its operating market and the intent of this merger is to consolidate technological and maintenance expertise to achieve short-run cost savings synergies. The Malaysian scenario, in its early stages, is a strategic alliance which will be providing Air Asia with shared resources, including staff and fleet, that will expand its brand presence in new markets for a new customer base that is intended to ultimately be a full-fledged merger with this competitor. The synergies achieved through the Air Asia X and Malaysian Airlines merger should save the firm 165 million Euros by consolidating maintenance (Mukim, 10). SITUATION ANALYSIS Air Asia, the world’s lowest cost airline company, is currently operating in an oligopolistic market. This is one that is characterized by the presence of few firms and where there is heavy reliance on branding and promotion to sustain competitive advantage. ...
Furthermore, since 2001, Air Asia has found considerable cost savings and competitive analysis in its market by offering no frills, low cost dynamic pricing structures that provide customers with low ticket prices and is modeled against a lean philosophy of supply and labor. However, in recent years, market entry barriers have been breaking down which is providing more competitive risks for new companies that are modeling their business models against a low-cost, no frills concept. Feng Chia University (2010) describes one of Porter’s Five Forces as the potential risks of high bargaining power of suppliers. In the case of Air Asia, Boeing company, its main supplier of airline fleet power, has very low switching costs due to the oligopoly and can therefore provide high prices for procurement and determine deadlines with Air Asia having little influence or authority in this process. This leads to high prices in the supply chain for fleet procurement. MARKETING STRATEGIES Post-merger, Air Asia needs to alter its promotional philosophy in order to become more competitive. It will now have shared resources with Air Asia X and Malaysia, thus providing more advertising expertise and resources to ensure successful delivery in this capital investment. Currently, Air Asia does not promote its strong organizational culture in any of its marketing, an opportunity for improved visibility and connection with consumers at the psychographic level. To investors, cultural issues are a very attractive benefit within a company as it leads to human capital advantages and ultimately competitive advantages (or even comparative advantages) in key profitable markets (Very, Lubatkin, Calori and Veiga, 167). The business should model new ...Show more
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YOUR NAME HERE YOUR COURSE HERE YOUR TUTOR HERE DATE HERE EXECUTIVE SUMMARY Air Asia is one of the highest performing, competitive companies in its Malaysian and Indonesian markets. The business operates with a dynamic, lean model of business by which customers receive low ticket prices for a no frills flight experience (Air Asia, 2005; O’Connell & Williams, 260)…
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