DESA 7 RESOURCES (M) SDN BHD

AIRASIA: NOW EVERYONE CAN FLYPresentation Date & Group : 21/11/2015 Group : AC30Semester : Sep 2015

Case Study Group MemberMUHAMMAD FAWWAZ BIN IDRIS 2. IZZATI FARIHA BINTI SOBRINURUL IZZATI BINTI ZUL Question 1Nature of the Company Business The nature of business is aviation company:AirAsiaThai AirAsiaIndonesia AirAsiaQuestion 2Mission & Vision Statement

Treat employee as family and put them as priorityCreate a globally recognized by ASEAN brand.To become the no. 1 lowest fares airline.Giving the lowest fares airlines to peopleVISIONMISSIONQuestion 3Main Concerns & Issues Faced

Other airlines offered the full range of services such as MAS giving complimentary in-flight meals, frequent-flyer program and airport loungesOpen-skies agreements.AirAsia bankcrupt and Tune Air take over.MAS launches second Super Saver ProgramQuestion 4Factors Impacting Companys Profit & Action TakenElements/FactorsHow does it impact/suppress firm profitabilityPossible action to be taken1Threat of New Competitiona) High level of new entrantsb) Tendency to offer lower pricec) Less start-up modal required to venture inPricing power decreasesPotential of customers lossIncreases competition intensitySub-contract to them Increase brand entity to clientsReact boldly to market changes to stay on top2Threat of Substitute Servicesa) Low buyer inclination to substituteb) Cleaning Services company (High Pressure Water Jet)c) Tedious switching costs Revenue generation maintainedFirm can only cater inspection service (lower sales achieved)Higher sales can be achievedmaintain good relationship with clientsBuy machines / sub-contract to the substitute companyEncourage customers to apply full package services3Intensity of Company Rivalrya) Rivals with worldwide known namesb) Less local established company c) High exit barriersHard to penetrate the bond to acquire contractsGrabbing future sales by PETRONAS (as it gives local bumi company priority)High competition to acquire contractsEstablish good relationship Maintain & enhance job performance to pleased clientsImprove services differentiation Elements/FactorsHow does it impact/suppress firm profitabilityPossible action to be taken4Bargaining Power of Customers (Buyers)(a) Moderate bargaining power of buyers(b) High demand of quality performance (c) Being effective & efficient is highly importantRisks of losing tender bidding (if placed a higher bid)Affect contract termination (if perform badly)Costly (more Overtime, Labor cost)Moderately pricedEnhance & Improve Quality PerformanceEnsure total efficient work flows5Bargaining Power of Suppliers High bargaining power of suppliers (in Kemaman)Expensive machineryExcessive consumables used monthlyHigh expenses occurredHigh investmentHigh monthly expenses - Source out to outside suppliersHave to buy due to save cost in longtermBuy more quality products / monitor usageQuestion 5Business Objectives ObjectivesFinancial1. To reduce leasing cost by 40%2. To reduce accumulated debt of about USD 11 millionCustomers1. Offer lowest fares among airlines, customer able to fly everywhere.2. Provide frequent flight to a destinationInternal Business Processes1. Overhead and fixed costs associated with an aircraft were lower on a per flight2. Flexible work rules staff able to perform multiple taskLearning & Growth1. Passenger sales seat increases year by year2. Adopted a sector pay policy rather than an hourly pay scale for its pilots.Question 6Implemented Business Strategies & its Advantages / DisadvantagesCurrent Strategies ImplementedAdvantageDisadvantage1. Purchase of Hydro Blast Machine for both bases Saves cost in the long runCostly (RM800,000)2. All contract documents (invoices) must passed to HQ before sent to clientLess typo / invoice error (which makes easier payment flow)Timely & Costly (courier back and forth)3. Operation bases are separated individually (Kemaman & Labuan)More effective & efficient managementSince theres no HQ, hardly monitor as a whole4. Employing contract workers (outsource)Less total wages expensesLess committed workers (will impact less quality performance)5. Yard spaces divided to contracts job, neglecting the other job that were not in contract awardedEfficient movement in, in progress and out of jobLimits other upcoming future job / (by PO contracts)Question 7TOWS MatrixTOWS MATRIXStrengths1. Experienced Team2. Contracts Awarded3. PETRONAS recognition4. Operation bases in bonded customs areaWeaknesses1. Improper documentation2. Scattered job progress strategy3. Slow Invoicing process4. Limited yard spacesOpportunities1. Vast clients to cater2. PETRONAS contracts exposure3. Low level of substitute services4. Worldwide services usageSO Strategies1. Further expansion to worldwide tender participation2. Increase job efficiency3. Improve brand imageWO Strategies1. Synchronize proper documentation to make it efficient2. Apply for ISO9000/90013. Divides yard areas / bays for certain clientsThreats1. Established company rivals2. Demanding suppliers3. Low barriers to entry4. Bonded areas expensive rentals and MHE suppliesST Strategies1. Improve job performances2. Maintain good relationship3. Effectively scheduled daily MHE usage WT Strategies1. Sub-contract to new entrants2. Monitor job progress closely3. Placing KPI to Invoicing Dept.SO (3 +2) (4+1) (3+4)WO (1+1) (2+4) (4+3)ST (1+1) (2+3) (4+4)WT (4+3) (2+1) (3+2)17Question 8Key Success FactorsApply for ISO 9000 / 90001 Monitoring Job Progress DailyMaintain good relationship with current awarded contracts clientsVenture internationally to enhance brand imageHaving proper documentations / SOPs / KPI for every departmentsQuestion 9TOWS Matrix Strategic Initiatives

From 7(b)Strategic InitiativesSO Strategies1. Further expansion to worldwide tender participation1. Agree to participate in any tender for international work.2. Sub to any international company of same field (at the particular country) to have the work on behalf of DS7 (Principal Agent)2. Increase job efficiency

1. Schedule an effective work process2. Daily report to be send3. Improve brand image

1. Maintain good relationship with clients2. Market brand image more widely (via website, events, exhibitions, functions)WO Strategies1. Synchronize proper documentation to make it efficient1. Every dept. to have own process flow / SOPs2. Synchronize both hardcopy & softcopy documents 2. Apply for ISO9000/90011. Establish ISO9000 as soon possible2. Placing workable SOPs for every dept.3. Divides yard areas / bays for certain clients

1. Reserved dedicated bays for respecting contracts2. Arrange collection and inspection dateFrom 7(b)Strategic InitiativesST Strategies1. Improve job performances1. Movement in and out tubular should be planned one day prior2. Any problems should be report as soon as possible to avoid hiccups2. Maintain good relationship1. Typical outing / entertainment invitations by top management2. Ensure that all job process and invoicing matter done smoothly 3. Effectively scheduled daily MHE usage

1. Planning one day or before prior to renting MHE2. Loaded usage of maximum full hours MHE (use full 8 hours instead of just using when needed)WT Strategies1. Sub-contract to new entrants1. Have the new entrants to share job progress2. Not based on profit sharing, but by purchase order2. Monitor job progress closely

1. Daily & Weekly Report2. To report even slight problem to HQ to make sure all done smoothly, not leaving the problem to be raised by client3. Placing KPI to Invoicing Dept.

1. Applying 48 hours cycle time to complete inspection report after job completed2. Invoices to be sent every week instead of waiting bundles of invoices to be issued to clients.Question 10MarComm activites & justifications

No.Proposed MarCommJustifications of revenue generation and effectiveness of the MarComm activities1.2.3.4.5.oilandgas-asia.com26Question 11Element of Monitor & Control ProgressControl & Monitor ElementsRationale / Objective 1.2.3.4.