Strategy Alternatives

This is the alternative strategies that can be conducted by Air Asia

to improve their business operation and gain profitable returns:
1. Intensive Strategy (Market Penetration)
Market penetration is one of the intensive strategy under the
business competitive strategy. Intensive strategy refer to
those strategies that require intensive efforts on the part of
the organisation to improve its competitive position in the
industry. Market penetration refers to the strategy that Air
Asia can search to improve the market share of their current
services that their offer in the market through greater
marketing efforts. This strategy should be implement by Air
Asia when they realize that the current market size is not
saturated and has growth potential in future. This is also a
good strategy when the market shares of competitors are
falling behind, and when the increase in the number of new
customers

is

favourable.

Market

penetration

should

be

considered when there is a relationship between marketing

expenses and sales revenue growth, and the organisation can
gain economies of scale and competitive advantage position.
2. Intensive Strategy (Product Development)
Product development is also one of the intensive strategy
under the business competitive strategy. Intensive strategy
refer to those strategies that require intensive efforts on the
part of the organisation to improve its competitive position in
the industry. Product development refers to the strategy that
Air Asia can do which is introducing the new services to its
existing market. This strategy should be implement when Air
Asia realize that the existing services has reached the
maturity stage and a renewed services is necessary to sustain
the company position in the industry.
3. Intensive Strategy (Market Development)

Market development also one of the intensive strategy under

the business competitive strategy. Intensive strategy refer to
those strategies that require intensive efforts on the part of
the organisation to improve its competitive position in the
industry. Market development refers to the strategy that Air
Asia can do which is introducing their current services to a
new market. This strategy can be implement by Air Asia when
their financial and human capital are able to support the new
market needs. The goal of market development strategy is to
expand the business into new markets. These potential
customer groups in new market maybe already be served by
competitors or may not yet be served by anyone for the
services.
4. Diversification Strategy (Concentric Diversification)
Concentric diversification is one of the diversification strategy
under the corporate growth strategy. Diversification strategies
refer to those activities in which an organisation gets involved
in areas of businesses which are related or unrelated to the
original (core) business activities of the organisation. Air Asia
can apply concentric diversification strategy which is refers to
business activities of diversification in new but related service
areas. By adding a new services, it could enhance the profit of
the existing services. This strategy could be selected if the Air
Asia has a strong team of management to support this
strategy.
Recommended Strategy
This is are the recommended alternative strategies that can be
implemented by Air Asia from all available alternative strategies:
1. Intensive Strategy (Product Development)
In Air Asia context the product is a services that Air Asia can
develop for their existing market include a process of

designing, creating and marketing new services to benefit

customers.
2. Intensive Strategy (Market Development)
The market development in Air Asia context is expansion of
the total market for Air Asia Company by entering new
segments of the market, and converting non users into users
of Air Asia services.
Implementations
This is how Air Asia will implement the recommended alternative
strategy in detail and with proper explanation:
1. Product Development
In order to produce more attractive products and services, Air
Asia could either modify it existing products or services or
produce new products or services to its existing market. Air
Asia booking system are mainly through internet, as we know
not everyone of its customer know how to use internet
booking system so not every customers can enjoy this
services, therefore Air Asia can invent another way to promote
it product to it customer. Beside call centre to take the
booking, Air Asia can make a publicity with the help of some
radio station or television station to promote it products for
example Astro or ERA FM. This will advertise Air Asia products
or services globally. New products and services could be
inventing to suit the advertisement so that it will attract the
customers. This could be a very expensive to bear but it can
be overcome if they could come out with a barter agreement
with the media station like they can use Air Asia as
transportation in exchange for the advertisement base on
contract terms. Air Asia also can develop new services line
that new to the provider as opposed to the market place or be
additional to the services that already on offer. For example,
Air Asia can provide service such as van and buses to pick up

customer from certain location for example KL Sentral and

Terminal Bersepadu Selatan (TBS) to airport or having travel
tour in stop destination for customer during the waiting time
in local destination. This develop new lines in Air Asia service
and other development can Air Asia done such as selling
Insurance cover to the passenger.
2. Market Development
Using market development

it

involves

offering

existing

products or services to new market. Air Asia would need to

look at products or services in the terms of packaging or
service. It might take three forms:
New segment - Air Asia could offer it products and
services into hospitality service or training centre for
people who want to have knowledge on airline business.
As we know Air Asia have Air Asia Academy which is
establish

to

provide

quality

training

and

people

development for Air Asia employees. This academy offer

One Stop Regional Training Centre, Type Rating Training
Organization, State of the art Full Flight Simulators,
Maintenance

Flight

Training

Device,

Emergency

Evacuation Training, Engineering School and much

more. Rather than provide this to only Air Asia
employees, Air Asia can make it open to public and
operate as an educational business in increase their
profit. Air Asia can offer certificate for recognition to the
graduates, the certificate can be used to seek a job in

airline industry.
New Users - Air Asia's customer target majority are price
aware customer and customer who are looking for low
cost fare. Air Asia could target higher end customer such
as high income people like corporate company executive
with an attractive fare package. Such as company tours
or company trip either to short haul or long haul
holidays. High income people usually did not choose Air

Asia as their primary choices, their usually choose for

example Malaysia Airlines which provide more exclusive
experience in their business class. Air Asia only provide
business class on Air Asia X but very limited seat which
is only 12 seat in business class for each aircraft of Air
Asia X and just for long haul only. To attract this high
income people to use Air Asia they have to provide
business class services in each of Air Asia aircraft,
doesnt need to have high number of premium seat as
long its there in every aircraft whether short haul or
long haul. This will lead high income people such as
corporate people who want to travel with Air Asia and
want a little bit more exclusivity will get it. Air Asia can
also offer the premium seat with advantage of unlimited
flight change, priority check-in and boarding, premium
lounge, 40kg baggage or extra, priority baggage,
premium meal and drink, inflight entertainment and
much more to gain interest of this new user.
Product development could be a may not be easy to
implement as it need big investment to do research it market.
This would involve lots of research to input data on the
acceptability from it customer, other country policy and
government rules and cost incurred to create or tailored the
products or services.