Review AirAsia: The World’s Lowest Cost Airline and discuss the concept of cost advantage. Review textbook Figure 7.10, Using the value chain in cost analysis.
A case study is a puzzle to be solved, so before reading and answering the specific questions, develop your proposed solution by following these five steps:
Read the case study to identify the key issues and underlying issues. These issues are the principles and concepts of the course area which apply to the situation described in the case study.
Record the facts from the case study which are relevant to the principles and concepts of the course area issues. The case may have extraneous information not relevant to the current course area. Your ability to differentiate between relevant and irrelevant information is an important aspect of case analysis, as it will inform the focus of your answers.
Describe in some detail the actions that would address or correct the situation.
Consider how you would support your solution with examples from experience or current real-life examples or cases from textbooks.
Complete this initial analysis and then read the discussion questions. Typically, you will already have the answers to the questions but with a broader consideration. At this point, you can add the details and/or analytical tools required to solve the case.
Case Study Questions:
Discuss how AirAsia achieves a cost advantage. Provide an in-depth analysis for AirAsia Construct and use a value chain to show how AirAsia achieves its multiple cost advantages.
Are AirAsia’s cost advantages imitable by other airlines? Why or why not?
Can AirAsia effectively compete in long-haul air travel given the nature of its existing strategy and the nature of the cost advantages that underpin AirAsia’s existing strategy?