AirAsia is a low-cost Malaysian airline company whose headquarter is near Kuala Lumpur. The airline is known as the largest in Malaysia because of destinations and fleet size. The company operates international and domestic flights to over 165 destinations in more than 25 countries across the world. Its hub is Klia2, which is low-cost carrier terminal in KLIA- Kuala Lumpur International Airport in Selangor, Sepang, Malaysia. It is considered as a market leader in airline industry in Malaysia. The company is widely known because of the best possible low fares (AirAsia, 2020).
VRIO analysis is a marketing model used for analyzing and evaluating the company’s resources and capabilities. The model focuses on four components: Value, Rarity, Imitability, and Organization. These components help the company in achieving competitive advantage which can be further exploited to mitigate the threats and strengthens position. Here is the detailed VRIO analysis of AirAsia.
Value
“Value” is the first component of the VRIO analysis. This component helps the company in identifying the valuable resources of the company that will help in availing the opportunities. AirAsia is one of a famous airline in Asia and is able to offer low fares to passengers. This could be done by hedging the low fuel prices, energy and fuel consumption management systems and cost savings from the single aircraft operations.
However, this is not exclusive capability and competitors can achieve it, but it is time consuming. Therefore, this becomes the competitive parity for the company. Moreover, the leading position in the market is valuable for AirAsia, as it can use the brand image and brand equity to attract more consumers (Tan, 2017).
Rarity
“Rarity” is the second component of the VRIO analysis, as this helps in determining the rare resources of the company which are not easily available in the market or very few competitors have it. Most of the airlines are using differentiated pricing strategies, this involves selling tickets in different prices to different business segments. This price discrimination increases if market becomes competitive. AirAsia has kept its prices as low as possible for all the business segments. Its main aim is to make the travel experience affordable for the consumers. Moreover, its intangible resources are considered as rare which can be obtained through sustainable policies like SMS, management on energy and fuel, talent attraction program, etc. This made the AirAsia as World’s largest Best Low-Cost Airline by Skytrax world airline (fcu e-paper, 2010).
Imitability
The resources and capabilities of the company needs to be difficult to imitate as this will help in gaining competitive advantages. The more difficult will be the resources to imitate, the more company will be able to enjoy and gain benefits from its exclusivity. AirAsia is very creative in developing the brand image and equity to influence the customers. Its famous slogan “Now everyone can fly” and campaign of “Free ticket”, it implants the oppose image of the airlines charging high prices which are non-affordable. AirAsia is very focused in marketing the airline through all social medias to reach the potential customers. This capability is difficult to imitate, and AirAsia can sustain the competitive advantage (fcu e-paper, 2010).
Organization
The fourth and last component of the VRIO framework is organization. The company should manage and organized its resources and capabilities in order to sustain the competitive advantages for long run. AirAsia is successfully managing and handling the intangible and tangible resources of the company. It attracts young talent by various programs and campaigns. It has managed the fleet size of 174 Airbus-A320 very well in 2016 and other subsidiaries in Indonesia, Thailand, India, Japan, and Philippines (Tan, 2017).
Conclusion
AirAsia is one of the biggest low fare airline leading the market in Malaysia. The company is well organized and managed which helps it in focusing on the strategies of the company to achieve competitive advantage for long run.
References
- AirAsia, 2020. About us. [Online], Available at: https://www.airasia.com/en/gb, [Accessed on: 24th March, 2020].
- Tan, X. 2017. AirAsia business strategy. [Online], Available at: https://www.academia.edu/36620950/AIR_ASIA_BUSINESS_STRATEGY, [Accessed on: 24th March, 2020].
- Fcu e-paper, 2010. Analysing AirAsia in business competition era. [Online], Available at:file:///C:/Users/CC/Dropbox/Business%20Law/M980005798101.pdf, [Accessed on: 24th March, 2020].