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Requirement
1- Write a report containing "AIRASIA X: CAN THE LOW-COST MODEL GO LONG HAUL?" in approx 500 words with reference to MLA.
Solution
Introduction
The analysis will be performed on one of the biggest air airlines companies AirAsia. It was the most successful airlines by budget since 2007. It dominated the market of southeast Asia and successfully entered India and china. It was poised to make its significance potion in the market and has decided to start a new venture in the as long haul which was nicknamed as X. in early 2010 it has captured 11 aircraft and has 15 destinations to fly off. This was present in 3 continents. There has been a problem started with meeting the requirement of the short-haul and long-haul operating systems. Thus, the company officially decided to separate X from AirAsia. It has been suggested from the industryinsidersthat this activity could be abandoned and short to medium distance service could be focused on the new venture. There was no proper meeting up the requirement of both the short and long run haul.
There will be analysis made with the VRIO framework that includes the valuable, rare, cost imitate and organised to capture aspects. There has problem formulation that will signify the reasons for the failure of the plan. Recommended actions for the same will be provided in the paper.
Analysing VRIO framework
VRIO framework could be useful in determining the link between the internal characteristics of the firm and its performance. It does not use external factures like the competitors to determine the profit of the company. Thus, it could be a relevant way to assess the performance of the company based on the results of its own initiative(Rodríguez and O’Connell 64-78). This could show how relevant is the company in managinggovernanceactivities.
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V – Valuable: This states that at least one of the resources could be of considerable value. This could provide a competitive advantage to AirAsia. It has been found that the aircraft of the company were significantly managed. There were 11 aircraft managed by the firm. The company has the potential to gather the financial resources in order to inject capital in the new venture. However, later it has not been able to manage the short-haul and long-haulrequirements(Gudmundsson)
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R – Rare: The second thing in this framework, resources needs to be rare. This needs to be present in one or a few companies. This needs to be done because all marketers have the same kind of resources; they could exploit the resources in the same manner. This has not been considered by AirAsia. This is because they were only concerned about the expansion, and there was not any significant concern given to this part of the new venture (De Poret, O'Connell and Warnock-Smith 272-281). There were some kind of air rafts, and the expansion strategy was no suitable for the company. There were suggestions for not undertaking the long-haul expansion strategy rather than focusing on same short to medium and regional service. The idea of competing with the large firms was not profitable for the company.
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I – Costly to Imitate: Finding rare resources could not be a profitable approach. This is because it could be imitable by the competitors. Thus, there is a requirement for finding such resources which are cost and har to imitate. There could be ambiguity in the resources. Thiscould not be imitable as it is controlled by the (focal company) understanding the sustainable competitive advantage is not easy(Hunt and Truong 170-184). This was not found in resources of the AirAsia as there no influences given on the resources.
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O – Organised to Capture (the value of the resource/capability): Resources are going to going to create value from their own. It is the tendency of the firm to adequately exploit it in an organised way. There needs to be capable of coordinating and assembling the resources(Anderson et al.).
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Problem formulation
The major problem with the company is that it has not the resources to manage to operate of both the short-haul and long haul. There were other problems like:
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Leverage the extensive network and choosing the profitable destination for the extended company X.
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Raising the revenue by not increasing the prices of the tickets.
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Positioning the airline's brands in the market of non-Asian countries(Buaphiban and Truong 124-133).
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The marketing team has the mentality of a start-up, which needs to be set away.
Recommended actions
There need to be reporting structure, budgeting system, compensation policies and management control system in order to manage or organise the resources. Distinctive competence could be achieved if the company has managed all the four attributes in its resources. There need to be casual ambiguity, social complexity and unique historical conditions. All four attributes in the resources could help the companies. The resources need to be valuable. NPV could be calculated in order to provide a better competitive advantage.
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Place Your OrderWorks cited
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Rodríguez, Andrea M(Rodríguez and O’Connell 64-78)artín, and John F O’Connell. "Can Low-Cost Long-Haul Carriers Replace Charter Airlines In The Long-Haul Market? A European Perspective." Tourism Economics 24.1 (2017): 64-78. Web.
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Gudmundsson, Sveinn Vidar. "Limits To The Low-Cost Niche? Finding Sustainable Strategies For Low-Cost Long-Haul Airlines." SSRN Electronic Journal (2015): n. pag. Web.
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De Poret, M., J.F. O'Connell, and D. Warnock-Smith. "The Economic Viability Of Long-Haul Low Cost Operations: Evidence From The Transatlantic Market." Journal of Air Transport Management 42 (2015): 272-281. Web.
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Hunt, Jennifer, and Dothang Truong. "Low-Fare Flights Across The Atlantic: Impact Of Low-Cost, Long-Haul Trans-Atlantic Flights On Passenger Choice Of Carrier." Journal of Air Transport Management 75 (2019): 170-184. Web.
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Anderson, Carolina et al. "Impact Of US Low Cost Carriers Entrance To The Airline Market In Colombia, South America." International Journal of Aviation, Aeronautics, and Aerospace (2017): n. pag. Web.
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Buaphiban, Thapanat, and Dothang Truong. "Evaluation Of Passengers' Buying Behaviors Toward Low Cost Carriers In Southeast Asia." Journal of Air Transport Management 59 (2017): 124-133. Web.
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