Case Study Oct 2009

Question 1

Identify five (5) of competitive advantages used by AirAsia.

Five of competitive advantages used by AirAsia are:

• launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed.
• undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1 (US$0.27).
• operates scheduled domestic and international flights and is Asia's largest low fare, no frills airlines
• pioneered low cost travelling in Asia which is then followed by Tiger Airways, Jetstar Asia, Nok Air, Lion Air and Cebu Pacific.
• the first airline in the region to implement fully ticket less travel and unassigned seats

Question 2

  which of the Porter's generic strategies were applied by AirAsia in the case study and explain with     examples.

The Porter's generic strategies that were applied by AirAsia in the case study is cost leadership, which is becoming a low-cost producer in the industry that allows the company to lower prices to customers. In this strategies the competitors with higher costs cannot afford to compete with the low-cost leader on price. For example Air Asia operates scheduled domestic and international flights and is Asia's low fare. Also, it was  a pioneer of low cost travelling in Asia.


Question 3
Based on Porter's five forces model, analyze AirAsia's buyer power and supplier power.

• Buyer power

Air Asia assessed by analyzing the ability of buyers to directly impact the price to pay for an item. As an example Air Asia giving  a low cost travelling to their customers and also with the world's lowest unit cost of US $0.023 (ASK). Usually airline industry has high buyer power because of customer have many choices.

• Supplier power

Air Asia assessed by the suppliers' ability to directly impact the price they are charging for suppliers. For example Air Asia is currently the main customer of the Airbus A320. The company has place an order of 175 units of the same plane to service its route network by connecting all the existing cities in the region and expanding further. Usually airline industry has high supplier power as there are limited plane and engine manufactures to choose from

Valuing Organizational Information

Organizational Information

# Information Granularity

= Refers to the extent of detail within the information which are fine and detailed or coarse and abstract information.

• Levels, format, and granularities of organizational information.

Additional characteristics that help determine the value of information :

# The value of Transactional and Analytical Information

~ Transactional Information

= Encompasses all of the information contained within a single business process to support the performing of daily operational tasks. Organization capture and store transactional info in database and use it when performing operational tasks and repetitive decisions.

* Example : withdrawing cash from ATM, making airline reservation and purchasing stock.

~ Analytical Information
= Encompasses all organizational information and its primary purpose is to support the performing of managerial analysis tasks. It also used when making an important ad hoc decisions.

 * Example : trends, sales, product statistics, future growth projections.

•  Transactional information verses analytical information

# The Value of Timely Information

• Timeliness is an aspect of information that depends on the situation.

~ Real-time information

= Immediate, up-to-date information

~ Real-time system

= Provides real-time information in response to query requests.

• Timely Information is relative to each business decision and some of this decisions require weekly information while other may require daily information.
• Organizational such as 911 centers, stock trader and banks require up-to-the-second information.

# The Value of Quality Information

~ Characteristics of high-quality information include :

> Accuracy

 = Are all the values correct ?

* Example : is the name spelled correctly? is the dollar amount recorded properly?

> Completeness

= Are any of the values missing?

* Example : Is the address complete including the street, city, state and zip code?

> Consistency

= Is aggregate or summary information in agreement with detailed information?

* Example : Do all total fields equal the true total of the individual fields?

> Uniqueness

= Is each transaction, entity and event represented only once in the information?

*  Example : Are there any duplicate customers?

> Timeliness

= Is the information current with the respect to the business requirements?

* Example : Is information updated weekly,daily or hourly ?

~ Low quality information example

 # Understanding the Costs of Poor Information

~ The four primary sources of low quality information include :

• Online customers intentionally enter inaccurate information to protect their privacy.
• Information from different systems have different entry standards and formats
• Call center operators enter abbreviated or erroneous information by accident or to save time.
• Third party and external information contains inconsistencies, inaccuracies and errors.

~ Potential business effects resulting from low quality information include :

• Inability to accurately track customers
• Difficulty identifying valuable customers
• Inability to identify selling opportunities
• Marketing to non-existent customers
• Difficulty tracking revenue due to inaccurate invoices
• Inability to build strong customer relationships.

# Understanding the Benefits of Good Information

• High quality information can significantly improve the chances of making a good decision.
• Good decisions can directly impact an organization's bottom line.

Organizational Structure that Support Strategic Initiatives

Organizational Structures

• Organizational employees must work closely together to develop strategic initiatives that create competitive advantages.

• Ethics and security are two fundamental building blocks that organizations must base their business upon.

IT Roles and Responsibilities

• Information technology is a new functional area and it has been around formally around 40 years.

# Recent IT-related strategic positions :

~ Chief Information Officer ( CIO )

= Oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives.

= Broad CIO function include :

• Manager -ensuring the delivery of all IT projects on time and within budget.
• Leader - ensuring the strategic vision of IT is in line with the strategic vision of the organization
• Communicator - building and maintaining strong executive relationships.

• Average CIO compensation by industry

• Concerns of CIOs 

~ Chief Technology Officer ( CTO)

=  Responsible for ensuring the throughput, speed, accuracy, availability and reliability of IT.

~ Chief Security Officer ( CSO)

=  Responsible for ensuring the security of IT systems.

~ Chief Privacy Officer ( CPO)

= Responsible for ensuring the ethical and legal use of information.

~ Chief Knowledge Office ( CKO)

= Responsible for collecting, maintaining and distributing the organization's knowledge.

• Skill pivotal for success in executive IT roles

The Gap Between Business Personnel and IT Personnel.

# Business personnel

* Possess expertise in functional areas such as marketing, accounting and sales.

# IT Personnel

* Have the technological expertise.

Because of this issue it create a communications gap between the business personnel and IT personnel.

Improving Communication

# Business Personnel 

*  Must seek to increase their understanding of IT

# IT Personnel

* Must seek to increase their understanding of the business.

It is the responsibility if the CIO to ensure effective communication between business personnel and IT personnel.

Organizational Fundamentals Ethics and Security

•   Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful.

# Ethics

=  The principles and standards that guide our behavior toward other people.

# Privacy

= A major ethical issue

= The right to be left alone when you want to be, to have control over your own personal possessions and not to be observed without your consent.

• Issues affected by technology advances :

1.  Intellectual property

         - Intangible creative work that is embodied in physical form.

  2.   Copyright

         - The legal protection afforded an expression of an idea, such as a song, video game and some types of proprietary documents

   3. Fair use doctrine

        - In certain situations, it is legal to use copyrighted material.

   4.  Pirated software 

     - The unauthorized use, duplication, distribution or sale of copyrighted software.

  

   5. Counterfeit software

        - Software that is manufactured to look like the real thing and sold as such.

•  One of the fundamental and essential in trust is privacy
• Primary reasons privacy issues lost trust for e-business :

    

 

# Security

•  Organizational information is intellectual capital and it must be protected from any harm.

~ Information security

 = The protection of information from accidental or intentional misuse by persons inside or outside an organization.

• E-business automatically creates tremendous information security risks for organizations.