Blue Ocean Strategy Example in Asia – Example 1

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One of the significant changes that airline industry have changed is the involvement of budget airline industry. The good example in Malaysia is Air Asia.

Air Asia have managed to avoid the red ocean (compete with Malaysia Airline and regional airline such as Tiger Air, Jet Air etc) by looking into the factors that industry take for granted and also factors that important to customers. With the Four Actions Framework proposed by Blue Ocean Strategy authors, Air Asia have implemented many strategic move to ensure they are making Malaysia Airline and regional airline company irrelevant.

Example of the strategic move as follows:

Eliminate:

* Over the counter booking system

* Free Food/Beverage on the plane

* Seating Class booking system

Reduce :

* “luxury” facilities provided by Airport Lounge

* No of attendance service on the plane

* Seat Quality

Raise:

* Focus on several key destination

* Increase frequency of flight

Create :

* Online Booking system

* Point to point travel system

With this strategic move, Air Asia able to focus on factors that really bring value to the customers such as point to point travel system, easy booking system etc. This will help Air Asia to reduce cost and at the same time increase the value to the customers – Value Innovation.

Besides that, Air Asia is able to look at current non-customers as explained by the authors of Blue Ocean Strategy.

Current Airline Customers:

* Customers who are affordable to buy expensive ticket from Malaysia Airline and regional airline companies.

* Business people in Malaysia or ASEAN region

Non-Customers:

* Government Staff

* Those that cannot afford to buy expensive ticket such as who are in rural areas, students or fresh graduates.

With the successful implementation of this Blue Ocean, Air Asia have venture into other businesses such as Tune Hotel and Tune Money. The concept is toward Blue Ocean marketplace.

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