AirAsia X - Sustainable International Business
The Company’s Initial Foreign Market Entry Strategy and How It Has Evolved over Time
AirAsia X is currently the sole Long haul corporation whose flying operations are based on the European-Asia Pacific Corridor. Similar to other businesses the company has not achieved its current success without the challenges related to operations and competition (Lee and Carter 2012). AirAsia X designed its business operation strategy with the focus on Long-haul, low-cost airline. The effectiveness of the company’s business strategy is mainly achieved through the use of customized market segmentation by mainly targeting the wider populace that is highly enticed by low-cost flight services. The company’s primary objective is to increase its market share, sustain competitive ability while increasing its revenue generations. The airline is a subordinate of the largest Asia’s Short-haul, affordable or cost leader corporation the AirAsia (Fu, Oum and Zhang 2010). The company’s main foreign entry strategy is cost leadership. In that, the company is guided by the philosophy of saving money for its customers an aspect that has been essential in attracting and retaining consumers. Due to the increased competition that is driven by the well-established airlines in the international business the company undertook the cost leadership approach as a means of differentiating itself from all other companies.
Cost leadership as its entry strategy has categorized the airline as different and favorable both for long and short flight travels. In the contemporary society, consumers are not only becoming sensitive to the provided services but also the cost of these services. AirAsia X upholds the values of quality, affordability as well as travel convenience to its target which makes it more favorable (Fu, Oum and Zhang 2010). The company is able to sustain its affordable pricing approach by ensuring that its operating expenses are minimal. In 2010 the company emerged as the sole and most efficient airline post a restructuring that detached it from AirAsia company’s short-haul operations. This rearrangement meant that the company holds a different management to all its operations, and premises but it continues to utilize the AirAsia brand given that it is popular and well recognized globally (Lee and Carter 2012). The thought behind the strategy is to consistently drive movement for both short and long-haul relationships while sharing their marketing approaches. In addition, the company also focusses on partnerships such as with Malaysia National Carrier (MAS) with the aim of increasing its market share and increasing its competitive capabilities. In timely periods, AirAsia creates a number of modifications in the quest of meeting the changing demands from its consumers and market operations trends by creating new flight destinations, upgrading to meet foreign governments policies as well as economic restructuring by getting rid of flights that have proved to be ineffective.
Retrieved from https://www.slideshare.net/razlim/entry-strategy-of-air-asia-dubai
The Structure of the Company and How It Integrates Its International Activities into That Structure
AirAsia X operates in Partnership with AirAsia short-haul Corporation despite their separation in July 2010 (Berkhout et al 2010). In that, the company operates on its own but mainly depends on AirAsia’s operation brand, promotions, marketing and website in their symbiotic association that seeks to drive consumer traffic. As an associate, the company mainly benefits from the well-established and accepted brand in the global market. Its associate structure also extends based on its collaboration with large international flight companies such as Virgin, Air Canada among other different shareholders with the objective of acquiring support as well as a partnership with respect to international flights (Adler et al 2014). Through the partnership structure, the company integrates its global operations by utilizing the brands and marketing grounds to gather more consumers and establish itself in different markets effectively without affecting its operations and revenue gains (Wang et al 2016).
Retrieved from https://www.airasia.com/vn/en/inflight-comforts/seat-options.page
Retrieved from https://www.airasia.com/vn/en/inflight-comforts/seat-options.page
References
Adler, N., Fu, X., Oum, T.H. and Yu, C., 2014. Air transport liberalization and airport slot allocation: The case of the Northeast Asian transport market. Transportation Research Part A: Policy and Practice, 62, pp.3-19.
Berkhout, F., Verbong, G., Wieczorek, A.J., Raven, R., Lebel, L. and Bai, X., 2010. Sustainability experiments in Asia: innovations shaping alternative development pathways. Environmental science & policy, 13(4), pp.261-271.
Fu, X., Oum, T.H. and Zhang, A., 2010. Air transport liberalization and its impacts on airline competition and air passenger traffic. Transportation Journal, pp.24-41.
Lee, K., and Carter, S, 2012. Global marketing management: changes, new challenges, and strategies. Oxford, Oxford University Press.
Wang, K., Tsui, K.W.H., Liang, L. and Fu, X., 2016. Entry patterns of low-cost carriers in Hong Kong and implications to the regional market. Journal of Air Transport Management.
