Like Indonesia, India does not allow majority ownership in domestic Airlines. 2.6 Cultural factors Sporting cultural, Countries in the ASEAN region including Malaysia are deeply passionate about sports especially football. One of their main strategies in expanding their market is through joint venture in Thailand, Indonesia, Philippines, Japan and possibly India. Airasia is a low cost Malaysian airline that operates scheduled international and domestic flights. It was established initially by DRB-Hicom, a government owned- conglomerate. The Rise of Tony Fernandes and AirAsia in Malaysia.presented at the 18th Biennial Conference of the Asian Studies Association of Australia in Adelaide. They have so far managed to handle the macro-environment forces really well. The acronym PEST is used to describe a framework for the analysis of a range of macro environmental factors including the Political, Economical Social and Technological environment. To begin, a PESTEL framework will enable us to understand all the macro-environmental factors affecting AirAsia. Finally, this report will list three recommendations, to be evaluated by the AirAsia board of directors before implementation. our expert writers, Please indicate where to send you the sample, Hi, my name is Jenn The external environment of any organisation can be analyzed by carry oning a PEST analysis. AirAsia Company and Its Success Case Study What are the micro and macro-environmental components which have contributed to the early success of AirAsia? Indonesia laws disallow majority foreign ownership on domestic civil aviation operations. They engage with the general public and are responsive. But there may be an unrealistic price war in the future due to more competitors entering the market. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. AirAsia with its low operating costs has a competitive advantage over its rivals. The huge population with rise in middle class and a lot of disposable income together with the absence of affordable forms of transportation post a high demand for AirAsia as a low cost airline. Apart from that, such presence will create greater credibility and underscore the importance of Indonesia to AirAsia and leverage on its role as headquarters of ASEAN. This is in regards it had a rather influential joint venture partner at that time. Its joint venture in Thailand was a rather smooth sailing. This in turn dictates HR recruitment policy in hiring locals in cabin crew positions (Pilot Career Centre, 2010). The acronym PEST is used to depict a model for the analysis of a scope of macro environmental factors including the Political, Economical Social and Technological environment. Page 5 of 29 2. All you need to do is fill out a short form and submit an order. In the late 2001, when then executive of Warner Music wanted to established an airline in Malaysia, he went and meet with Tun Dr. Mahathir Mohammed (the fourth prime minister of Malaysia). This is reflected in AirAsia’s aggressive approach in expanding. The above quote by AirAsia X CEO, Azran Osman Rani embodies the importance in removing communication barrier between their staff and the broader consumer market and them. Deregulation and privatization present Air Asia with opportunities for new routes. Economist recently reported that AirAsia is in talks with a new joint venture partner in India to set-up India AirAsia. Currently, AirAsia flies to 85 destinations in the world, 55 of them are located in ASEAN. In 2004, online sales accounted for 43% but in 2009, online sales were at 76%. AIRASIA’S MATERIALITY MATRIX Materiality refers to issues that reflect an organisations’ most significant economic, environmental and social impacts (X-axis), and the concern of stakehoolders (Y-axis). While micro environment factors such as competition norms impact the competitive advantage of the firm. You can get your custom paper from It only needs to explore its macro environment and trade profitably. 1. Macro-Environment Analysis for AirAsia The factors of Macro-enviroment suggest that there is a huge scope of growth for AirAsia in Asia The huge population with rise in middle class and a lot of disposable income together with the absence of affordable forms of transportation post a high demand for AirAsia as a low cost airline. However due to this, AirAsia learned to adapt and the emphasize in building relationship with the powers to be. As a low cost carrier, AirAsia have aggressively and taken huge risk in leveraging on technology advancement in terms of marketing and building a brand. Retrieved from http://www.airasia.com/my/en/about-us/ir-annual-reports.page AirAsia Annual Report 2007. Micro factors that would affect AirAsia’s performance would be the offers in the domestic economy and market. This report is shared in order to give you an idea of what the complete SWOT & PESTLE analysis report will cover after purchase. 1. Discuss the micro and macro factors that would affect AirAsia's performance in the current competitive environment described in the case MACRO MICRO Rising fuel costs 2008 Global Financial Crisis Heavily regulated industry Open Skies agreement with Indonesia, India, Thailand, and Singapore Rising landing costs 3. 2.4 Technology Technology remains the most dominant force that affect the strategy decision making at AirAsia especially in regards to marketing. The companies though the nature of these influences are inextricably linked to social, legal and political factors. AirAsia first made its presence in Indonesia by acquiring 49% of Awair with remaining 51% by Fersindon Nesaperkasa. AirAsia slogan is “everybody can fly”. In addition, the same situation happened in Indonesia, whereby AirAsia bought the firm that was facing losses that converted it to indo-AirAsia. The Malaysian government policy restricts the employment of non-Malaysians to first officers (co pilots) positions. For example Thailand- Cambodia has rather incredible bureaucratic border controls making air travel the most viable travel plan. These allow them to cross promote routes and promote greater synergy between their subsidiaries. During the civil unrest in Thailand, AirAsia gained a lot of positive coverage when it launched a rescue mission for passengers stranded at the Swarnabhumi Airport. Additionally, it is quite easy and rather involves no cost to shange from one airline to another. The marketing mix’s 7 Ps model is a marketing strategy tool that is used in a business in order to gain the feedback from the market in relation to marketing objectives. The consumer-buying power also will influence the changing of consumer spending patterns. Include the page numbers (no 'pp. ') Most of Asia states realize the importance of protection for environment, with globalisation and development of engineering, the pollution rise and the life milieus are damaged. (AirAsia Financial Report 2008), From October 2012 onwards , AirAsia in a bid to save cost by avoiding high airport taxes shifted from Suvarnabhumi Airport back to Don Mueang International Airport. AirAsia Berhad dba AirAsia MYX: is a Malaysian low-cost airline. The external environment of any organisation can be analyzed by carry oning a PEST analysis. It started in the early stages of AirAsia whereby the anti-competitive legacy airline policy of the Malaysian 2.5.1 Malaysia Malaysia’s political and legal forces played a huge role in shaping AirAsia. © Free Essay Examples Database. 2.4.2 Social Media The brand is strengthened when it is underpinned by real life individuals and not a ‘monolithic corporate presence’. It been using Facebook since 20069, and it has a several corporate page. Fuel price will likely to remain to be a huge component of airline cost structure. Macro (external) environment – larger societal forces that affect the microenvironment. Flying outside Malaysia is hard. By using this model, it can be concluded that the overall supplier power is quite high due to limited number of suppliers and monopolization of the industry (by only Boeing and Airbus). Economic factors in decision making are undeniable. The micro- environmental analysis is done using the Porter’s Five Forces. Get Your Custom Essay on Air Asia Macro-Environment Just from $13,9/Page. Retrieved from http://www.airasia.com/my/en/about-us/ir-annual-reports.page AirAsia Annual Report 2008. Airasia 4782 Words | 20 Pages. Apart from that their CEOs have facebook and twitter presence and effectively use it to solve ground problems and to engage with consumers. AirAsia.com. AirAsia Financial Report 2012). 1. PEST Analysis for AirAsia: Political Flying outside Malaysia is difficult. Macro-Environment Analysis for AirAsia The factors of Macro-enviroment suggest that there is a huge scope of growth for AirAsia in Asia. 2.5 Political /Legal forces. In other words, profitability ratios can be used to judge whether companies are making enough operational profit from their assets. Which is almost half the world population, majority of them never flew before because of high travel cost. It has localized pages for countries like Indonesia, Hong Kong and UK, apart from the general AirAsia Facebook page. 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