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Write an assignment on Individual Assignment on Strategic Analysis & Interpretation.
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Introduction
Asia Miles Limited is the leading and well-known travel and lifestyle prize program since way back from 1999. It also provides travel and lifestyle recompense programs worldwide. The Asia Miles propound various opportunities for members to earn miles by spending daily from a range of travel and lifestyle class, inclusive of flights, hotels, dining, financial services, retail, technology brands, and others. It also provides members to redeem miles and enjoy various travel and lifestyle apportion, such as hotel stays, dining, and shopping vouchers, electronics, concert tickets, and other leisure items (de et al., 2018). Asia Miles Limited serves customers aged two or above. The Asia Miles is based in Hong Kong. Asia Miles Limited operates as a subsidiary of Cathay Pacific Airways Limited. The location of Asia Miles is in Hong Kong, and it is working as the subsidiary of Cathay Pacific Airways limited.
Background information on AML
The background of Asia Miles Limited is it is Asia’s most leading and recognized travel and lifestyle rewards programme since way back from the year 1999.
The management of Asia Miles Limited is managed by the Cathay Pacific Airways Asia Miles Limited which is wholly owned by Cathay Pacific Airways Limited. AML is located in Hong Kong and has operated Asia Miles since February 1999 (Airways, B 2016) The Cathay Pacific’s official loyalty programme is Marco Polo Club. Asia Miles is an unaffiliated travel reward programme comprising of a variety of airline and hotel partners, as well as credit and charge card companies, car rental agencies, telecommunications companies and other non-air partners. Members of The Marco Polo Club are automatically enrolled as Asia Miles members. AML is a subsidy of Cathay Pacific Airways and is an international airline registered and based in Hong Kong, as it was incorporated in the way back in 1946, and at that time it almost carries one-millionth passenger who is a great amount as a starter industry or for any service provider company, but now it almost carries more than a million of the passengers each month. Due to good image and high profitability, it has provided subsidiary facilities to carry on the operation in hotels, airways, and so to AML that is Asia Miles Limited in the year 1999 since then, Asia Miles is also performing very well as it got the support from the Cathay Pacific Airways Limited. It got benefits also in Hong Kong as Cathay Pacific already operating in Hong Kong.
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Strategic Analysis
AML that is Asia Miles Limited is very well in its strategies and performing well, effectively and very efficiently in the Airlines Industry in the Hong Kong and the rest of the nation. As it got benefits from Cathay Pacific due to having its subsidiary company (Merkert et al., 2018). As Cathay is very well equipped and advanced in technology and is performing very well in the airline Industry since its incorporation in 1946 so it was great and relevant information about the customer mind and various player in the Industry and how to compete with them. So Asia Miles Limited is taking this advantage from Cathay as it is excellence in Industry. So, in the same way, the technology and strategy adopted by the Asia Miles is also very well managed and is also highly equipped with technology also (Min et al., 2016). Due to associating with the Cathay, Asia Miles also got the advantage in regards to image and reliability and that to in advancement in technology.
Internal environment
The internal environment is very good and sound as AML is providing huge salaries to the employee and staff as compared to other airline industry in the same region (Cui et al ., 2016). This is the only reason it is not able to produce huge profit as compared to another airline but the number of passengers and loyal customer is more for AML but he use to give huge and handsome amount of salaries to his employees and staff which cost it and reduces the overall profit, but the vale AML has is more than the other Airline operators. Beside this, it is well known for its reliable service.
External environment
In case of the external environment, Asia Miles Limited is performing well, and it has good strategies to compete with the rivals and another player in the industry as it is associated with the Cathay Pacific Airways Limited which helps it in planning and making strategies, and also in technological advancement. To compete with the other Airlines in regards to customer loyalty and brand equity AML is the top in the Hong Kong region. It is introducing the technology through which passenger is allowed to use their cell phone in the plane also which is more attractive and through this more number of the customer may also be attracted and become loyal (Arjomandi et al., 2014).
Potential future Strategy
Straightaway a joint team from the SITA and (AML) Asia Miles Limited has successfully enabled all traditional IT services mainly to perform in the fully integrated infrastructure based on SITA’s internet protocol solution portfolio (Park et al., 2015). Recently it installed global internet platform with Cathay Pacific's headquarters located in the City called Cathay which is adjacent to the country Hong Kong International Airport. Apart from this Asia Miles is going to plan and to implement the global internet service and e-Business platform in support of Cathay Pacific which wills helps to ensure staff worldwide. And this will also reduce the telecommunication cost up to very extinct.
SWOT analysis for the Asia Miles Limited
SWOT analysis is mainly done to know the relevant strength and weakness and what are the opportunity and threats.
Strengths
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1. Strong brand image and equity and customer experience
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2. Asia Miles is present across the region’s leading to increased synergies of operation
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3. It has number of fleet and varied mix of aircrafts which is leading to fuller utilization of the fleet based on the demand condition
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4. As a subsidiary of Cathay, it also has the code sharing agreements along with membership in One World Alliance
Weakness
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1. Due to having high leverage it is somewhat weak in finance in some way
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2. It has limited scope for future expansion due to future finance leases liabilities.
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3. An initiative of Reduction in the cost may lead to an unpleasant measure.
Opportunities
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1. Future growth is possible as due to emerging market growth potential
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2. Advancement and improvement in technology may lead to improved operation and may help in reducing the costs
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3. Opportunities due to expansion in freight sector.
Threats
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1. Heavy competition from both market that is domestic and international.
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2. Sodality in jet fuel price may hamper as it the important operating expense for the company.
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3. Regulative issues were relevant to continuing operation in the domestic as well as in international segment.
The major weakness is found is that it has low liquidity ratios from the last decades so in a way to improve it need to focus on its financial activities to cope up in the future (Chen et al., 2015). This is due to company raised more debt, and it's a highly leveraged company. But it has the great opportunity that is emerging market in China Indonesia, India. Major threats are that it has intense competitive pressure from both the market that is domestic and international. In spite of all, it has the great and sound image and equity and excellence customer experience which is the key to success in long run. But it needs to focus on its weakness and try to make it as its strength.
Five force analysis
Rivalry- as in case of AML, there is mainly two competitors in Hong Kong. But they are far away in producing the service as Asia Miles produce and give to it customer so there is less chance of danger with the rivalry. There is a lot of diversity in competitors such as Asia Miles is associated with Cathay Pacific also which lead it to excellence in technology and management which other competitors don't have.
Threats of new entrant- as Asia miles is very well in its brand loyalty, so there is less chance of posing a danger with new entrant and although it is providing it service since 1999 with the collaboration of Cathay Pacific Airways.
Threats of substitute- as substitute service or product are considered there are a lot of substitute to AML so it possesses the danger that customer may opt other airlines. So for this great positioning should be done in a way to make a more loyal customer, so in case of Asia Miles it has a huge loyal customer so currently, there is not much danger of substitute available, but he needs to continue in improving its services. Major substitutes are Malaysia and Singapore Airlines.
Bargaining power of buyer- here in case of bargaining power of buyer, buyer bargaining power is more as there are many airlines operators available in the Hong Kong market.
Bargaining power of supplier- here Asia Miles Limited has only a few suppliers, so the bargaining power of supplier is high. So in a way to reduce the bargaining power Asia Miles Limited should increase the supplier, as this will also lead Asia Miles to play safe and secure.
The PESTLE analysis of AML
Political- as far as the market of AML that Asia Miles Limited is considered it was found that the major market of AML is disturbed with the political issues so the political unrest in the major market may cause a decrease in traffic.
Recently in 2014, the political disturbance in Thailand was impacted to AML as it resulted in a sharp decrease in passenger traffic for almost a year.
Economic- due to the reduction in the oil price it leads to the reduction in fuel cost. In 2015 report represent that AML/ Cathay Pacific saved 20.4 percent Hong Kong $ in the Financial year 2015. But due to increasing the value of Hong Kong $ is it turning off the tourist also since 2016.
Social- AML is providing and investing in training and workshop for young generation and at the same time taking measure, initiative to reduce illegal trafficking.
Technology-AML has devoted to technology advancement always and all the time. It introduces the e-business platform also Asia Miles is using Information Technology in a way to improve communication with mainly customer, staff and passenger. So thereby this adopting of information technology is increasing the work efficiency also.
Legal- antitrust proceedings in various jurisdictions
Environment-as AML has considered it is very well in protecting the environment simultaneously with earning sound image and reasonable profit. As he is indulging in the waste management project, also it uses all it used silver foils used in catering in the plane to recycle it and give the eatable left materials to various industry to supply it to the animals. So by this way, it is showing the concern regarding the environment also and gaining the good brand and customer image among various players in the industry.
Synergy effects
Here in case of Asia miles Limited synergy effect with collaboration with Macro Polo Club is effective and found positive (He et al., 2017). It is a loyalty program which in return makes the more loyal customer, as a final output company will gain brand loyalty and can make enough profit. Macro Polo Club offers a premium travel experience and personal recognition to their valued and regular customer or members. It is continuously improving it offering from time to time in a way to ensure that the club will provide and meet the need of all the customer or members travels needs. So the association of Asia Miles with Marco Polo Club was found very effective as it leads the customer to become more loyal and they get attracted to the offering.
Recently in 2017 November 3rd, The Marco Polo Club announced the various new plan to attract the members and customers such as it announced if you fly regional within Asia, then you will be entitled to get additional 5 to 10 club points per sector across most fare classes in all cabins.
So overall we can say that Marco Polo Club is very well performing in a way to capture more members and it is providing loyalty program in regards to Asian Miles, Cathay Pacific Airways, etc.
Recommendations
Asia Miles has identified its competency on its staff. Therefore, managers in Asia Miles are encouraged to help employees think creatively, helping them to focus on what results are wanted rather than how to achieve them or the difficulties in achieving them.
Product development and information technology of the company are also encouraged for the advantage of the company for the future operations. High end in technology gives the company an edge to the competition.
Other recommendations;
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• Should lower the labor expense in a way to increase the profit
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• Increasing the liquidity ratio is needed
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• Objectives should be clear and measurable so that employee can put all their best effort in achieving them.
Conclusions
At the end of this assignment, it can be concluded that Asia Miles is a leading travel and lifestyle reward program; it is providing its services in many business and sector such as hotel, flights, dining concert ticket and other leisure items. Asia Miles Limited is the subsidiary of Cathay Pacific Airways, and it came in to effect and practice on the way back 1946. But the Cathay Pacific Airways was established and incorporated in the year 1999. Here Asia Miles limited was very well in its technology also and performing very well in the airline's industry in Hong Kong. As there are various player in the Hong Kong in airlines such as Singapore and Malaysia which are its competitors also but the number of passengers carried by Asia Miles limited is more than the other two major player that is Malaysia and Singapore Airlines, which shows that the customer is loyal and Asia Miles has good brand equity also and Asia Miles limited is very well in technology. The customer is felling delighted while traveling or staying with the Asia Miles limited ad they believe that they are in reliable hands. But still, Asia Miles has to work little hard in a way to make it more liquidity ratio.
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Asia Miles | Rewards, Partners, Upgrades. (2016). Cathay Pacific. Retrieved 10 February 2018, from https://www.cathaypacific.com/cx/en_IN/travel-information/rewards-and-benefits/about-Asia-miles.html
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Porter Five Force. (2017). Platinumessays.com. Retrieved 10 February 2018, from https://www.platinumessays.com/essays/Porter-Five-Force/15925.html
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De Boer, E. R. (2018). Introduction. In Strategy in Airline Loyalty (pp. 1-28). Palgrave Macmillan, Cham.
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Airways, B. (2016). Cathay Pacific Airways. Ltd., Ciba-Geigy Korea Ltd., Citibank, NA Seoul Branch, Clorox.
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Min, H., & Joo, S. J. (2016). Comparative performance analysis of airline strategic alliances using data envelopment analysis. Journal of Air Transport Management, 52, 99-110.
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Cui, Q., & Li, Y. (2016). Airline energy efficiency measures considering carbon abatement: A new strategic framework. Transportation Research Part D: Transport and Environment, 49, 246-258.
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Arjomandi, A., & Seufert, J. H. (2014). An evaluation of the world's major airlines' technical and environmental performance. Economic Modelling, 41, 133-144.
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Park, N. K., Lee, J., & Park, U. D. (2015). Korean Air Cargo: Strategic Challenges in an Evolving Environment. Asian Case Research Journal, 19(01), 127-154.
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He, H. W., & Balmer, J. M. (2017). Alliance Brands: Building Corporate Brands through Strategic Alliances? In Advances in Corporate Branding (pp. 72-90). Palgrave Macmillan, London.
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Chen, L., & Pawlikowski, H. (2015). The expansion of low-cost carriers into the long-haul market: a strategic analysis of Norwegian Air Shuttle ASA (Master's thesis).
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Merkert, R., & Alexander, D. (2018). The air cargo industry. The Routledge Companion to Air Transport Management, 18.
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