project attributes
Management and business are related with a project. Project Management is a part of business in this era. Most of the business is a part of project.
what is a project?
According to Clements & Gido, a project is an endeavour to accomplish a specific objective through a unique set of interrelated task and the effective utilization of resources.
Based on that definition, we can underline the word ‘objective’ in that statement. The objective is one of the attribute to help define a project.
So, we can deep a look into what are the project attributes. The following attributes are:
1) a project need a well-defined objective.
This means the objective of a project is usually defined in terms of scope, schedule, and cost. An organization doing a project need to set up a good objective. this objective will be help that organization to identify their needs and their aim before begin their project.
2) a project is carried out through a series of interdependent tasks.
a project always relate with various tasks. for that reason, a project need to be accomplished in a certain sequence in order to achieve the project objective.
3) Utilizes various resources
project also dealing with various resources which include different people, organizations, equipments, materials, and facilities.
4) a project has specific time-frame
every project has a start and end. For that reason, an organization need to consider the effectiveness and efficiency of their time during the implementation of project
5) a project may be unique or one-time endeavour
each of project has different types of project shape. some projects, like designing and building a space station, are unique because they have never before been attempted. this uniqueness can be a challenge to the subject who perform the project.
6) a project has customer
The customer is the entity that provides the funds necessary to accomplish the project. So, an organization who involved with a project must be make their customer satisfy and happy.
7) project involves degree of uncertainty
An organization who involved in the project, need to calculate the risk of the project. This is for prevent from loss and also make sure the project can run smoothly and successfully.
In conclusion, good project implementation begin with the understanding of the project attributes. If it can be very good implemented, it can make the project done successfully.
Identify and analyze the implementation of industrial automation usage in industrial sector. case study:Motosikal dan Enjin Nasional Sdn Bhd (MODENAS)
Abstract
The usage and implementation of current technology are the critical factor to the organization to adapting with the business environment. Implementation of automation systems in manufacturing process can be a choice for the useful benefits that can receive in many business industries. To implement it, that’s needed to identify and analyze very carefully to maximizing the systems to make valuable benefits and satisfaction both to the company and customers. Lead time, cycle time, production capacity, direct and indirect worker, and reject rate factor are the issues that can affected and also need to consider for the top management to make right decision to implementing automation systems in their manufacturing process. This research was used exploratory research and qualitative method by used interview in Motosikal and Enjin Nasional Sdn.Bhd (MODENAS). The information received during the interview, and another sources are used to identify and analyze the implementation of automation usage in industrial sectors.
Acknowledgement
I would like to express profound gratitude to my supervisor, Prof. Madya Dr. Zulkifli bin Mohamed Udin for his invaluable support, encouragement, supervision and useful suggestions throughout this research work. Her moral support and continuous guidance enabled me to complete my work successfully. Moreover, I am also highly thankful to my project paper lecturer Puan Mastora Mustafar for their valuable lecture whose help and guide me to understand about research knowledge throughout this study.
I am grateful for the cooperation of Motosikal and Enjin Nasional Sdn Bhd (MODENAS) by allowing mo to make industrial visited and interview. I really appreciate to Mr. Sazari B. Mohamad as a KAIZEN coordinator in MODENAS Company for their time and lovely cooperation that was given me a lot of information and answer all my questions without hesitation during the interview to complete this research.
I am as ever, especially indebted to my parents, my brothers, and Julita Endah Prasetyaningsih for their love and support throughout my life. I am also wish to thank to my group interview member Izy, Ita, Hanim, Kang, and Luqman for the chance to went with them for interview in MODENAS Company. I’m also would like wish to thanks to my best friends in Indonesia for the biggest support and courage to make me still have the spirit to finished this research.
CHAPTER 1
RESEARCH BACKGROUND
1.0 Introduction
In today’s business worlds, corporation or organization must be able to react to the changing of market needs rapidly, effectively and responsively. Only corporation that have ability to adapt with today changing which is very fast will be able to compete with another competitors in terms of business related. Moreover, in the current highly competitive business environment, the industry is challenged by the demand for productivity, quality, safety, and environmental protection. Tight profit margins and networked manufacturing emphasize the need for integration and global optimization of production facilities.
Nowadays, the technology has been rapidly changing and developing in the industrial sector. The usage and implementation of current technology are the critical factor to the organization to adapting with the business environment. In the industrial sector especially in manufacturing process, the effectively and efficiency of the process can affect many things in that process such as lead time, cycle time, direct and indirect worker, production capacity, and reject rate (possibility of zero defects)
In the manufacturing process, the more importance is how to optimizing it and how to improve productivity and competitiveness in the past. To improving the manufacturing process, the top management in the corporation needs to identify and analyze for making an innovation and continuous improvement in the manufacturing process to making sure the process is run effectively and efficiently and also can give more profit to the organization.
There is a lot of industrial products are becoming more complex and have higher added value than before. At the same time, the number of product variations increases and their lifetime gets shorter. As a result, a lot of industries need to focus on the high and current technology. And also operate the manufacturing process in the with lower labor costs. As a result, the industrial automation systems can be an option to fulfill the industries that need to focus in adapted in fast changing business environment, the needs of high technology, and concentrates how to minimizes and reduces labor costs, received high product quality, and also make the manufacturing and production process run effectively and efficiently to achieved the highest customer satisfaction.
Furthermore, industrial automation is one of the system that have been implementing and using in manufacturing process to changing the traditional system (manual method/system) in manufacturing process. Before I’m more deeply explaining about identify and analyze the implementation of Industrial automation usage in the industrial sector. I would like to give explanation about what is industrial automation, why we need to identify and analyze the implementation of industrial automation usage in the industrial sector, and also what is the result that we can find after we analyze and identify the company or organization whose implementing industrial automation systems, after that how a company or organization made decision to using and implementing industrial automation rather than using traditional or manual production system.
What is automation? According to Dictionary, R. H. (2009), automation is the technique, method, or system of operating or controlling a process by highly automatic means, as by electronic devices, is reducing human intervention to a minimum. And than, according to Mikell. P. Groover (1987), automation is a technology concerned with the application of mechanical, electronic, and computer based systems to operate and control production. Based on Wikipedia (2009), the definition of industrial automation in the scope of industrialization, automation is a step beyond mechanization. Whereas mechanization provided human operators with machinery to assist them with the muscular requirements of work, automation greatly reduces the need for human sensory and mental requirements as well. Processes and systems can also be automated. Moreover, according to IDC engineering (2008), the industrial automation is a discipline that includes knowledge and expertise from various branch of engineering including electrical, electronics, chemical, mechanical, communications, and more recently computer and software engineering. Automation and control by its very nature demands a cross fertilization of these faculties. Based on that definition, industrial automation is one of the systems that greatly reduces the need for labor and used more automation in the manufacturing process to make effectively and efficiency in the industrial sector.
In addition, why we need to identify and analyze the implementation of Industrial Automation Usage in the Industrial sector? Identifying and analyzing the implementation of industrial automation is the important things that top management need to consider it. Implementation of automation in the industrial need to consider because there is a lot of things that need to consider such as how many number of workers in the plant (direct and indirect worker), how is the relation with cycle time and lead time in the production process, how many production output (increasing or decreasing if using or not using automation in industrial), and than how reject rate can be reduced if using or not using automation in production the process. Moreover, the implementation of using automation in the industrial process need to consider what I was written before, and than how is automation can give benefit if we are using it industrial process.
And than, Identify and analyze the implementation of Industrial automation usage in the Industrial sector can give some valuable information before the company top management make a decision for using automation in the production process or not using it. With good identify and analyze it can help the top management to make a good and accurate decision before implement automation in production process.
On the other hand, there is any controversial factor in implementing industrial automation such as unemployment factor, environment factor and human replacement factor. It is commonly thought that automation implies unemployment due to the fact that a machine replaces the work of a human being in part or completely. This factor can be controversial because the usage of industrial automation can be replaced a human chance to being employed. Another controversial factor is environment; this is because the costs of automation to the environment are different depending on the technology, product or engine automated. There are automated engines that consume more energy resources from the Earth in comparison with previous engines and those that do the opposite too. The last controversial factor is Human being replacement, In the future there is a possibility that the Artificial intelligence could replace and improve a human brain and the robots would become not only fully automated but also fully autonomous from the human beings
On this factor, making big issues in the implementing industrial automation in the industrial sector. As a result, a top management needs to identify and analyze the usage of industrial automation before making a decision to implementing it.
On this paper, I’m trying to identify and analyze the implementation of industrial automation usage in the Industrial sector. Case study: Motosikal and Enjin Nasional Sdn.Bhd (MODENAS).
—–want to know more about my project paper? drop ur email to : aiesec.nafinurrauf08@gmail.com——
mobile entertainment
1.0 Introduction
Mobile phone was becoming the trend for the people in the 21st century. Some of the giant mobile telecommunication such as Nokia, Sony Erickson, Samsung, Motorola, etc was providing the current technology of mobile telecommunication into the people. And than, with the wonderful function of mobile communication to communicating and connecting to all the people without any boundaries it can give valuable benefits for the humans and their social networks, even though the distance between one person to another person is far away, different country, and different place, this mobile communication making the human life more easier, faster, cheap, effective, and efficient to connecting to another people around the world.
The mobile communication also has the greatest impact into the humans to communicate around the world and also was giving a big effect into the rapid development in telecommunication technology. And than, every people around the world need this technology to make there live and work more easy and simple.
Moreover, the world is experiencing fast growing mobile penetration rates[1]. Based on that’s statement, the usefulness of this mobile communication into humans was giving the world is experiencing fast growing mobile penetration rates. And also, the fast growing mobile penetration rate in the world was becoming the mobile revolution for changing the way people live and work. As a result, mobile phone is already pervasive in all major developed economies and in an increasing number of developing ones as well[2].
On the other hand, the function of mobile telecommunication nowadays is not for communication purposes only. According to Elisabeth (2005), the mobile telecommunications industry is searching for a new service, not only to regain its investments in licenses but also to stay competitive in the future. Furthermore, the industry is undergoing a radical transformation and organization in the telecommunications, information technology and media sector are becoming increasingly interdependent. Organizations have to collaborate to create new mobile data services[3]. Based on that’s statement, to stay competitive in the future, the mobile telecommunication industry need to make new innovation to be competitive and can be compete with another competitor among mobile telecommunication industry. To make more competitive, the mobile telecommunication industry make an innovation, the innovation can be into the content, Internet application, services.
According to Jeffrey (2004), growth in mobile Internet services and contents expanded from Japan and Korea in 2000 to Europe in 2003, and is expected that this growth will become a global phenomenon by the end of 2004[4]. Based on that statement, the growth in mobile internet services and contents was making the mobile telecommunication not necessary for communicate only, but nowadays, a lot of people (mobile phone consumer) searching some another benefits and function about the content of their mobile phone. One of the content that increasingly demanded is entertainment. Many researchers agree that mobile content market is focused only on entertainment and infotainment application[5].
In addition, according to Wong and Hiew (2005) Mobile entertainment is a newly emerging and rapid developing sector. Within this area, playing games on mobile devices is considered one of the most popular activities, and already showing signs of rapid and lucrative growth[6].
The showing and lucrative growth in mobile entertainment, it can make me interesting about the mobile entertainment topic. On this paper, I would like to discuss about the mobile entertainment. On this paper, I would like to divide the discussion about mobile entertainment into eight sections. In the section 1.0 will be covered about the introduction, in the section 2.0 will be discuss about the definition and overview about mobile entertainment, in the section 3.0 will be discuss about the types of mobile entertainment, section 4.0 will be discuss about mobile entertainment user population, in the section 5.0 will be discuss about mobile entertainment consumer behavior, section 6.0 will be discuss about mobile entertainment in Malaysia, section 7.0 will be discuss about mobile entertainment drivers and barriers, and the last section which is section 8.0 will be the conclusion of this paper.
2.0 Definition and overview
On this section, I would like to discuss about the definition and overview of mobile entertainment. Before I will be discuss about the mobile entertainment, let we understand what is the definition and overview of mobile entertainment. On this section we will be discuss the definition of mobile entertainment from the different author, researcher, resource and different perspective.
According to Moore and Rutter (2004), a primary difficulty when researching mobile entertainment is that of definition. It’s not always apparent to consumers precisely what mobile entertainment is[7]. In addition, the problem of producing common understandings of mobile entertainment has previously highlighted by the mobile entertainment forum when asserting that two different industries make up the mobile entertainment industry: entertainment and telecommunication.
Moreover, mobile entertainment is created as the convergence of both of these industries. Each of these worlds speaks a different language, and holds different assumptions about the nature of its work[8]. Based on that’s statement, the definition of mobile entertainment was facing difficulties to define because with the different background of the author and different perspective of the people looking of the definition, it was making difficult to define precisely what mobile entertainment is.
According Kalyanaraman (2002), defines mobile entertainment as services that offer gaming experiences on par with those to be had in other mediums such as Xbox and Playstation 2[9]. And than, according to MGAIN, mobile entertainment represents on of the few mobile services that have mass market potential that will drive the next generation of mobile devices[10]. Furthermore, as mobile entertainment is a social and commercial process as well as a technical one, numerous industry producers and users, manufacturers and consumers as well as researchers of dissimilar background hold a diversity of the other definition for mobile entertainment. Mobile entertainment represents on of the few mobile services that have mass market potential that will drive the adoption of the next generation of mobile devices[11].
Kalyanaram, MGAIN, Wong and Hiew stated that entertainment is a service. They are more defines the mobile entertainment that is related with the services.
On the other hand, the another definition In other literature, MGAIN assumes mobile entertainment includes any leisure activity undertaken via a personnel technology, which is, or has the potential to be, networked and facilitate transfer of data over geographic distance either on the move or at a variety of discrete lactations[12]. And than, Mobile entertainment as any type of leisure activity undertaken via personnel technology that utilizes telecommunication networks interacts with services providers and incurs a cost upon usage[13]. In that’s statement from MGAIN, Wong and Hiew more stressed that mobile entertainment is the type of leisure activity.
The different definition also come out from a search on google on the term ‘Mobile Entertainment’ reveals that even everything portable, including DVD player, television, radio, external players, amplifier, speakers, as well as woofers and so forth are considered devices of mobile entertainment[14]. Google more define the mobile entertainment as the types or products of the mobile entertainment itself.
Based on the few of author, researcher, and source about the mobile entertainment definition, each of authors has different perspective to make definition about mobile entertainment. Kalyanaram and MGAIN stated that entertainment is a service. They are more defines the mobile entertainment that is related with the services. And than, MGAIN, Wong and Hiew more stressed that mobile entertainment is the type of leisure activity. And google more defines the mobile entertainment as the types of the mobile entertainment itself. The difficulties to define of mobile entertainment are because any different background and perspective of the author, researcher, source and also the mobile entertainment is still a newly emerging sector. Furthermore, mobile entertainment is a newly emerging sector. It is implicit throughout the study that proper classification of mobile entertainment services enables players in the value of web to adopt appropriate business models to bring services to market and how they should cooperate, share revenue and jointly creative competitive advantages[15].
In conclusion, the terms of mobile entertainment have so many definition, the researcher found difficulties to find the precisely definition about mobile entertainment. The difficulties to find the precisely definition is because the different perception and background from the author, research, and the source whose explain about mobile entertainment, and than this is because some clash function understanding between entertainment and telecommunication.
3.0 The content of mobile entertainment
After we understand about the mobile entertainment definition and overview, on this section I will be discuss about the content of mobile entertainment. If we are talking about the mobile entertainment, these are a lot of mobile entertainment that are using and applying in mobile phone.
According to Wong and Hiew (2005), mobile entertainment comprises of a range of activities including but not limited to downloading ring tones, logo, music and movie, playing games, instant messaging, assessing location based entertainment services and internet browsing[16]. And than, Games, ringing tones, screen savers, and other entertainment contents are already maxing the mobile phone a portable entertainment player, and faster network speeds, increased processing power, java, and 3D rendering techniques will reinforce this trend[17]. Based on that’s statement, mobile entertainment comprises with a range of activities and content. In the explanation above, Wong and Hiew classified some of activities and content in the mobile entertainment. We can look more the overview of applications segmentation for mobile entertainment in the table below.
Table 2. Overview of Applications Segmentation For Mobile Entertainment[18]
| Segment 1 | Segment 2 | Segment 3 |
| Watch a streaming video on mobile device | Share downloaded video clip with friends via Bluetooth | Record video clip on mobile devices equipped with camera |
| Send MMS to a friend’s mobile device | Transfer pictures to a friends mobile device via infrared | Snap pictures with mobile devices equipped with camera |
| Download music onto mobile device | Transfer music file to a friend’s mobile device via infrared | Listen to music files transferred from PC to Apple Ipod |
On that table, Wong and Hiew classified the application segmentation into three segments. This three segment is classified for mobile entertainment services. By categorizing mobile entertainment services in a particular segment, it can make more understanding from the user perspective to use mobile entertainment in their mobile.
In addition, the content of mobile entertainment is not only stated and classified in the above. But, in mobile entertainment also have another content that are using in mobile such as mobile TV, Mobile learning (edutainment), mobile Internet, mobile infotainment, etc.
In conclusion, the content in mobile entertainment is not limited that Wong and Hiew Stated above. That’s type of mobile entertainment is only a small and few types in mobile entertainment. In the developing of mobile entertainment, is not possible that will be another content that can be using and classified as mobile entertainment.
4.0 Mobile entertainment user population
After we are discussed about the content of mobile entertainment. This section will be discussed about mobile entertainment user population. Nowadays, mobile entertainment is rapidly growing in the world. The predicted by BWCS that the total number of mobile subscribers worldwide will increase to more than 1.72billion by the end of 2007, compared to 950 in 2001, with Asia Pacific likely to retain its dominance pertaining to global market share[19].
A lot of people are using the mobile entertainment with a lot of reason. The mobile entertainment is giving more benefits to the users which is not just limited for using mobile as a tools for communication, but the users (customer) want more inside in their mobile. Many of the customer wants is any entertainment inside their mobile.
The user population of mobile entertainment was growing rapidly in many countries. According to Kangas (2003), On top of that, region is predicted to hit 39 billion Euros by 2010[20]. Based on that statement, the increasing of user population in mobile entertainment can increasing the revenue and predicted to hit 39 billion Euros by 2010. Actually, the rapidly growing not only in the developed countries such as Europe and USA but this rapidly growing also in the developing countries such as Indonesia, Malaysia, Cambodia. Moreover, the highest user population that was using mobile entertainment is youth. It has been found that the youth is the lead segment in adopting mobile entertainment[21].
According to IDATE, Asia Pacific Region, which should have accounted for 38.7% of the global mobile subscriber base by the end of 2002, again showed very steady growth (an increase of 32.3% in comparative terms and 106.3 million new subscribers in 2002, versus an increase of 40.9% and 95.7 million new subscribers in 2001. Growth in the Asian mobile market was again higher than the worldwide average but there are several disparities in this growth[22].
As a result, the increasing of mobile entertainment user population in the world can make the changing of mindset and perception that mobile telecommunication is not only for to communicating to other people, but the users also need the services or leisure activity that are provided to them which is can give more adding value and useful benefits to the customers.
5.0 Mobile entertainment consumer behavior
On this section will be discussed about the mobile entertainment consumer behavior. On this section, I will be discussing and identifying about the consumer behavior using mobile entertainment.
According to Wong and Hiew (2005) the success of mobile services deployment in the future depends ultimately on the successful development and the satisfaction of an end user market rather than technical development[23]. Based on that statements, the success of mobile services in mobile entertainment is depends on the satisfaction of end user market rather than technical development. To the success of mobile service deployment in the future, they need to identify their consumer behavior in using mobile entertainment. The identifying consumer behavior has a important role for make the satisfaction to the customer. The consumer behaviors in using mobile entertainment are:
- Different perception and behavior of Asian, European, and North American consumers
According to O’Doherty (2005), Thus, it as well known that on the whole, Asian consumers are more familiar and more comfortable with the notion of using mobile phones as entertainment devices compared to their European and North American counterparts. In general, European and North American consumers seek more information based-services. As a result, European and North American Consumers spend les time on their mobile phones, typically spending fewer than 15 minutes daily on content services[24]. Based on this statement, we already know that any different behavior between Asian, European, and North American consumers when they are using, applying, implementing, and choosing mobile entertainment. The different behavior of this user might be influenced with few of factor such as perception, culture, economics, race, and family or lifestyle background
- The behavior depends on the age the users
On this consumer behavior, the age is very influencing of the mobile entertainment consumer behavior. The young generation has very influencing factor in the consumer behaviors.
According to Wong and Hiew (2005), the young are the most fertile groups for absorbing and incorporating the changes in mobile communication development[25]. And than, from the ages perspective we can identify which ages are more likes the contents of the mobile entertainment. According to O’Doherty (2007), Content such as ring tones, logos, wallpapers, and screensavers are generally consumed by subscriber between aged between 13 and 16, where areas mobile games purchased in the greater numbers by the 22 to 26 years olds[26].
- Pricing is not make a significant contribution
On the consumer behavior whose using mobile entertainment in their mobile stated that pricing is not make a significant contribution to them. According to Wong and Hiew (2005), Indicates that pricing is not making a significant contribution to the prediction of the adoption of mobile entertainment[27]. The consumer on mobile entertainment is not to consider with the price when they are using mobile entertainment into their mobile.
- Depends on the mobile entertainment content and features
According to Suki (2007), users satisfaction with a mobile phone increases when the content and features of the mobile phone are easy to use[28].
On the previous consumer behavior that was written which stated pricing is not make a significant contribution. The consumer is not to consider about the price if the content and features that they received are easy to use. When the content and features are easy to use in the mobile entertainment, the consumer not to more stress about the price.
- Word of mouth influenced
On of the consumer behavior in mobile entertainment is the easy influenced by word of mouth. According to Bhattacherje (2000) Asserts that consumers are easily influenced based on word-of-mouth from peers[29].
In conclusion, after we identify one by one about the mobile entertainment consumer behavior. The mobile entertainment is the key important things to understand more deeply to make customer satisfaction about the mobile entertainment.
6.0 Mobile entertainment in Malaysia
On this section, I will be discussing about mobile entertainment in Malaysia. This discussion will be covering about the development of mobile users in Malaysia, who is the majority users of mobile entertainment in Malaysia, and also the study about what kind of factor that influencing Malaysia mobile user to use mobile entertainment.
According to the Malaysian Communications and Multimedia Commission’s (MCMC), hand phone user’s survey 2005, as of May there were 16.2 million hand phone subscriptions on the five digital networks operating in Malaysia, in the first quarter of 2006, the number had increased to 20.5 million, a 5.3 percent growth rate and 77.7 percent penetration rate nationwide. This shows that there has been an increase the usage of Malaysia mobile technologies, especially hand phone[30]. The number of phone users in Malaysia is increase significantly for every year since 2005. On that statements explained that the increasing number of phone user’s in Malaysia has been increase the usage of Malaysia mobile technologies, especially hand phone.
In addition, the mobile market in Malaysia continuous to grow increasingly competitive.[31] According to this statement, the development of mobile market in Malaysia continuous to grow increasingly. The increasing of mobile market in Malaysia because mobile was becoming the important things for Malaysian people to communication to other people. On the other research found that, the majority of users that use mobile are younger. He was found that in the year 2005, more than two million hand phone users in Malaysia were 19 years old or younger[32]. In conclusion,
Lee found that the younger Malaysian is the majority user in Malaysia. And than, the other findings by lee also stated Malaysian mobile phone users preferred to go for entertainment (36.0 per cent) and personalization (ring tone) content (23.6 per cent)[33]. Lee stated that younger is the majority use mobile in Malaysia and also he found the Malaysian younger also more preferred to go for entertainment with the highest percentage 36.0 percent. On that statement already notice that the majority of mobile entertainment users in Malaysia are the younger.
The next study also will be found about what kind of factor that influencing Malaysia mobile user to use mobile entertainment. The other research that found by Wong and Hiew stated the factor perceived benefit amongst consumers’ drivers the adoption of mobile entertainment in Malaysia. Wong and Hiew was identified what kind of factor that can influence the mobile entertainment users in Malaysia. Based on their research, Wong and Hiew found that the key findings in this research indicate that young subscriber in Malaysia place greater importance on perceived benefit of mobile entertainment services compared to issue of pricing, product, and technological standardization, peers, and community as well as privacy and security[34]. More over, on their research, Wong and Hiew compared to issue of pricing, product, and technological standardization, peers, and community as well as privacy and security. This issue is usually used for the mobile entertainment users perception to look at before they are using mobile entertainment.
In addition, Wong and Hiew also found that the young Malaysian subscriber place more important on the quality or perceived benefits. This could be attributed to the possibility that young Malaysian subscriber place more important on the quality or perceived benefits of mobile entertainment services compared to other factors in the survey. This suggests that the adoption of mobile entertainment in Malaysia is driven by the attributes of mobile services, which include ubiquity, personalization, localization, timeliness, network stability, and mobility. This supports the widely accepted wisdom that potential adopters will only be attracted to mobile entertainment if there is a clear perceived benefit of the services from their perspective[35]. Furthermore, the factors that influencing the adoption of mobile entertainment in Malaysia also found by Wong and Hiew stated that community and media factor may not indicate that peer pressure; community influence and advertising do not contribute in influencing the youth in Malaysia to consume mobile entertainment. Young subscriber in Malaysia are not particularly eager to try out new mobile entertainment service unless the services it self’s perceived as useful[36].
As a result, the total number users of mobile in Malaysia are increasing significantly since 2005, and the researcher found that the majority of mobile users in Malaysia are younger. The researcher also found that mobile entertainment in Malaysia is growing and increasing significantly. Moreover, the factors that influencing the adoption of mobile entertainment in Malaysia found that the others factors such as prices, media and community, advertising, product, and technological standardization, peers, and community as well as privacy and security is not to influencing significantly to the mobile entertainment consumers, the consumers more stressed in services and perceived benefits when they are using the mobile entertainment rather than the others factor. The services are given to the consumers in using mobile entertainment is the highest factor that can influencing of the usage and customer satisfaction of mobile entertainment in Malaysia.
7.0 Mobile entertainment drivers and barriers
After we discussed about the mobile entertainment in Malaysia, on this section we will be discuss about the mobile entertainment drivers and barriers. If we are discussing about mobile entertainment, researcher found that the factors that can be drivers and barriers of mobile entertainment. If we discuss about mobile entertainment, it can’t be a simplest things that we are thinking. Mobile entertainment is more complex than other subsets of mobile commerce. According to Wong and Hiew (2005), It is noteworthy to rethink and redefine mobile entertainment, as it is more complex than other subsets of mobile commerce[37].
On this section, I’m also will be discuss about the drivers and barrier in mobile entertainment. what is the drivers in mobile entertainment? According to Vrechopoulos et al, reveal that lower prices, improved security, improved devices, and effective customer support, constitute the critical success factor towards accelerating mobile commerce consumer adoption in Europe[38]. Based on that statement, this factors that drivers in mobile entertainment. The issues of lower prices, improved security, improved devices, and effective customer support can be the drivers to pushing the increasing of customer satisfaction towards mobile entertainment. Even though, Vrechopoulos, et al found the mobile entertainment drivers and the sample in Europe, we still can agree that the drivers also can be using in another country.
After I was identified the barriers of mobile entertainment that Vrechopoulos, et al stated, we are continue to identify the barriers in mobile entertainment. What are the barriers in mobile entertainment? According to form the major obstacles towards mobile commerce adoption[39]. And than, a commercial research conducted by TNS Interactive concludes that the greatest barriers to mobile commerce were, in order of priority: security, tangibility, and physical experience. Therefore, uncertainty reduction pertaining to reducing such concerns is important in encouraging adoption of mobile entertainment[40]. More over, Ollila stated that the major challenge for the players in the mobile entertainment value web is to take the services to mass-market consumer group of the pragmatists, thereby crossing what is called the chasm. There are three main obstacles related to discontinuity, quality of services, and pricing that need to be addressed[41].
Based on the statement about the mobile entertainment barriers, some of researcher comes out with the different types of barriers in mobile entertainment. goldman identified mobile entertainment barriers are:
- Slow transmission rates
- Inadequate mobile interfaces,
- High cost
- And power consumption of devices
TNS identified mobile entertainment barriers are:
- Security
- Tangibility
- And physical experience
Ollila identified mobile entertainment barriers are:
- Discontinuity
- Quality of services
- And pricing
In conclusion, some researcher found the different perspective about the mobile entertainment drivers and barriers, but the purpose of identified drivers and barriers are for the development of mobile entertainment itself in the future.
8.0 Conclusion
Mobile telecommunication nowadays is not only for communication purposes only. The needs of people for having communication easier, faster, cheap, effective and efficient to connecting to the people around the world and also the more services that costumer received benefits is one of the purposes of any mobile entertainment nowadays. Moreover, the development of technology in mobile telecommunication can be to make there live and work more easy and simple.
The increasing number of mobile users also can give effect into the new innovation of mobile telecommunication that is mobile entertainment. Moreover, the definition of mobile entertainment is the important things when we discussed about mobile entertainment, the understanding of mobile entertainment can give us more understand to identify and analyze which is related with mobile entertainment.
In the development of mobile entertainment nowadays, these are many types of mobile entertainment itself. These types of mobile entertainment are related with the content of mobile entertainment itself. The example of mobile entertainment is mobile TV, download ring tones, playing games in mobile, etc. In addition, the mobile entertainment user population is significantly increasing in the world. the increasing of mobile entertainment user population in the world can make the changing of mindset and perception that mobile telecommunication is not only for to communicating to other people, but the users also need the services or leisure activity that are provided to them which is can give more adding value and useful benefits to the customers.
The increasing of user population that is using mobile entertainment also needs to identify their behavior. The consumer behaviors in using mobile entertainment are: Different perception and behavior of Asian, European, and North American consumers, The behavior depends on the age the users, Pricing is not make a significant contribution, Depends on the mobile entertainment content and features, and the word of mouth influenced.
On this paper also explain about the mobile entertainment Malaysia. In Malaysia, the total number users of mobile in Malaysia are increasing significantly since 2005, and the researcher found that the majority of mobile users in Malaysia are younger. The researcher also found that mobile entertainment in Malaysia is growing and increasing significantly. Moreover, the factors that influencing the adoption of mobile entertainment in Malaysia found that the others factors such as prices, media and community, advertising, product, and technological standardization, peers, and community as well as privacy and security is not to influencing significantly to the mobile entertainment consumers, the consumers more stressed in services and perceived benefits when they are using the mobile entertainment rather than the others factor. The services are given to the consumers in using mobile entertainment is the highest factor that can influencing of the usage and customer satisfaction of mobile entertainment in Malaysia.
And least but not least, some researcher found the different perspective about the mobile entertainment drivers and barriers, but the purpose of identified drivers and barriers are for the development of mobile entertainment itself in the future.
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Salz, P.A. (2006b), “Mobile delivery discoveries”, available at:
http://www.econtentmag.com/Articles/ArticleReader.aspx?ArticleID = 15719@AuthorID
= 157
Wong, C. C. and P. L. Hiew (2005). “Mobile Entertainment: Model Development
and Cross Services Study.” IEEE Xplore: 1358
K. Moore and J. Rutter. “Understanding Consumers Understanding of Mobile
Entertainment.” Presented at the Proceeding of Mobile Entertainment: User-Centred
Perspective, Manchester, England, 2004
S. N. Wiener, “Terminology of Mobile Entertainment: An Introduction, “Mobile
Entertainment Forum, August 2003
R. Kalyanaraman, “Mobile Entertainment Services- A Perspective, “ Wipro
technologies White Paper Series, 2002
MGAIN, “Mobile Entertainment Industry and Culture,” MGAIN April 25, 2004.
Wong, C. C. and P. L. Hiew (2005). “Mobile Entertainment: Model Development
and Cross Services Study.” IEEE Xplore: 1355
MGAIN, “Mobile Entertainment in Europe: Current State of The Art,” European
Commission User-Friendly Information Society, 2003.
C. C. Wong and P.L Hiew. “Mobile Entertainment: Review and Redefine.” IEEE
4th International Conference on mobile business, Sydney, Australia, 2005. To be
published
C. C. Wong and P.L Hiew. “ Mobile Entertainment Review and Redefine. “IEEE
4th International Conference on Mobile Business, Sydney, Australia, 2005, to be
published
Wong, C. C. and P. L. Hiew (2005). “Mobile Entertainment: Model Development
and Cross Services Study.” IEEE Xplore: 1355.
C. C. Wong and P.L Hiew. “ The State of Deployment and Adoption of Mobile
Services in Malaysia: A Comparative Study,.” Presented at the International
Conference on E-Commerce, Slangor, Malaysia, 2005.
Funk, J. L. (2004). “Key technological trajectories and the expansion of
mobile internet applications.” Emerald Management 6: 211.
C. C. Wong and P.L Hiew. “ Mobile Entertainment Review and Redefine. “IEEE
4th International Conference on Mobile Business, Sydney, Australia, 2005, to be
published
BWCS, “Play Away: The Future of Mobile Entertainment”, 2002.
S. Kangas, “Benchmarking Literature Review”, European Commission User
Friendly Information Society, 2003.
A.S Andreou, et al., “Mobile Commerce Applications and Services: A Design and
Development Approach,” 2002.
IDATE, “Growth in The Mobile Sector, ” [online document], 2003 , available:
http://www.idate/fr/an/lettre/34/p2/index_a.html
Wong, C. C. and P. L. Hiew (2005). “Correlation Betweens Factors Affecting the
Diffusion of Mobile Entertainment in Malaysia.” IEEE Xplore: 620
O’Doherty, K., S. Rao, et al. (2007). “Young Australians’ perceptions of mobile
phone content and information services: an analysis of the motivations behind
usage.” Emerald Group 3: 257.
Wong, C. C. and P. L. Hiew (2005). “Drivers and Barriers of Mobile
Entertainment: Empirical Study From a Malaysian Survey.” IEEE Xplore: 1325
O’Doherty, K., S. Rao, et al. (2007). “Young Australians’ perceptions of mobile
phone content and information services: an analysis of the motivations behind
usage.” Emerald Group 3: 258.
C. C. Wong and P.L Hiew. “Factors influencing the Adoption of Mobile
Entertainment: Empirical Evidence from a Malaysian Survey.” Presented at the
International Conference on Mobile Business (ICMB’05), 2005
Suki, N. M. and N. M. Suki (2007). “Mobile phone usage for m-learning:
comparing heavy and light mobile phone users.” Emerald group 24 no 5: 355-365
Bhattacherje, A. Acceptace of E-commerce Services: The Case of Electronic
Brokerage, Man, and Cyberethics,2000.
Malaysian Communications and Multimedia Commission (2005), “Industry
performance report, facts figures”, available at:
http://www.cmc.gov.my/what_we_do/ind_dev/IPR%202005.pdf
Wong, C. C. and P. L. Hiew (2005). “Correlation Betweens Factors Affecting the
Diffusion of Mobile Entertainment in Malaysia.” IEEE Xplore: 620.
Lee, K.s (2006), “More youngsters using handphone”, New Strait Times, 25
January, p.6
Suki, N. M. and N. M. Suki (2007). “Mobile phone usage for m-learning:
comparing heavy and light mobile phone users.” Emerald group 24 no 5: 355-365
C. C. Wong and P.L Hiew. “Factors influencing the Adoption of Mobile
Entertainment: Empirical Evidence from a Malaysian Survey.” Presented at the
International Conference on Mobile Business (ICMB’05), 2005
Wong, C. C. and P. L. Hiew (2005). “Drivers and Barriers of Mobile
Entertainment: Empirical Study From a Malaysian Survey.” IEEE Xplore: 1328
C. C. Wong and P.L Hiew. “Factors influencing the Adoption of Mobile
Entertainment: Empirical Evidence from a Malaysian Survey.” Presented at the
International Conference on Mobile Business (ICMB’05), 2005
Wong, C. C. and P. L. Hiew (2005). “Mobile Entertainment: Model Development
and Cross Services Study.” IEEE Xplore: 1357
Vrechopoulos et al, “Interest Shopping Adoption by Greek Consumers”, European
Journal of Innnovation Management, Vol 4, no.3,pp.142-152, 2001
Goodman, D.J., “The Wireless Internet: Promises and Challenges”. IEEE
Computer, Vol.33.no 7, pp. 36-41, 2000.
TNS Interactive, “ Global E-commerce Report 2001” Taylor Nelson Sofres
Interactive: London. pp.1-229, 2001.
Ollila, M, et al. Mobile Entertainment Industry and Culture: Barriers and Drivers,
MGAIN, UK, 2003
[1] Wong, C. C. and P. L. Hiew (2005). “Mobile Entertainment: Review and Redefine.”
IEEE Xplore: 2
[2] Wong, C. C. and P. L. Hiew (2005). “Correlation Betweens Factors Affecting the
Diffusion of Mobile Entertainment in Malaysia.” IEEE Xplore: 620.
[3] Kar, E. A. M. v. d. (2005). “The design of Mobile Information and Entertainment
Service on a UMTS Testbed.” ACM: 607.
[4] Funk, J. L. (2004). “Key technological trajectories and the expansion of
mobile internet applications.” Emerald Management 6: 208.
[5] Salz, P.A. (2006b), “Mobile delivery discoveries”, available at:
http://www.econtentmag.com/Articles/ArticleReader.aspx?ArticleID = 15719@AuthorID
= 157
[6] Wong, C. C. and P. L. Hiew (2005). “Mobile Entertainment: Model Development
and Cross Services Study.” IEEE Xplore: 1358
[7] K. Moore and J. Rutter. “Understanding Consumers Understanding of Mobile
Entertainment.” Presented at the Proceeding of Mobile Entertainment: User-Centred
Perspective, Manchester, England, 2004
[8] S. N. Wiener, “Terminology of Mobile Entertainment: An Introduction, “Mobile
Entertainment Forum, August 2003
[9] R. Kalyanaraman, “Mobile Entertainment Services- A Perspective, “ Wipro
technologies White Paper Series, 2002
[10] MGAIN, “Mobile Entertainment Industry and Culture,” MGAIN April 25, 2004.
[11] Wong, C. C. and P. L. Hiew (2005). “Mobile Entertainment: Model Development
and Cross Services Study.” IEEE Xplore: 1355
[12] MGAIN, “Mobile Entertainment in Europe: Current State of The Art,” European
Commission User-Friendly Information Society, 2003.
[13] C. C. Wong and P.L Hiew. “Mobile Entertainment: Review and Redefine.” IEEE
4th International Conference on mobile business, Sydney, Australia, 2005. To be
published
[14] C. C. Wong and P.L Hiew. “ Mobile Entertainment Review and Redefine. “IEEE
4th International Conference on Mobile Business, Sydney, Australia, 2005, to be
published
[15] Wong, C. C. and P. L. Hiew (2005). “Mobile Entertainment: Model Development
and Cross Services Study.” IEEE Xplore: 1355.
[16] C. C. Wong and P.L Hiew. “ The State of Deployment and Adoption of Mobile
Services in Malaysia: A Comparative Study,.” Presented at the International
Conference on E-Commerce, Slangor, Malaysia, 2005.
[17] Funk, J. L. (2004). “Key technological trajectories and the expansion of
mobile internet applications.” Emerald Management 6: 211.
[18] C. C. Wong and P.L Hiew. “ Mobile Entertainment Review and Redefine. “IEEE
4th International Conference on Mobile Business, Sydney, Australia, 2005, to be
published
[19] BWCS, “Play Away: The Future of Mobile Entertainment”, 2002.
[20] S. Kangas, “Benchmarking Literature Review”, European Commission User
Friendly Information Society, 2003.
[21] A.S Andreou, et al., “Mobile Commerce Applications and Services: A Design and
Development Approach,” 2002.
[22] IDATE, “Growth in The Mobile Sector, ” [online document], 2003 , available:
http://www.idate/fr/an/lettre/34/p2/index_a.html
[23] Wong, C. C. and P. L. Hiew (2005). “Correlation Betweens Factors Affecting the
Diffusion of Mobile Entertainment in Malaysia.” IEEE Xplore: 620
[24] O’Doherty, K., S. Rao, et al. (2007). “Young Australians’ perceptions of mobile
phone content and information services: an analysis of the motivations behind
usage.” Emerald Group 3: 257.
[25] Wong, C. C. and P. L. Hiew (2005). “Drivers and Barriers of Mobile
Entertainment: Empirical Study From a Malaysian Survey.” IEEE Xplore: 1325
[26] O’Doherty, K., S. Rao, et al. (2007). “Young Australians’ perceptions of mobile
phone content and information services: an analysis of the motivations behind
usage.” Emerald Group 3: 258.
[27] C. C. Wong and P.L Hiew. “Factors influencing the Adoption of Mobile
Entertainment: Empirical Evidence from a Malaysian Survey.” Presented at the
International Conference on Mobile Business (ICMB’05), 2005
[28] Suki, N. M. and N. M. Suki (2007). “Mobile phone usage for m-learning:
comparing heavy and light mobile phone users.” Emerald group 24 no 5: 355-365
[29] Bhattacherje, A. Acceptace of E-commerce Services: The Case of Electronic
Brokerage, Man, and Cyberethics,2000.
[30] Malaysian Communications and Multimedia Commission (2005), “Industry
performance report, facts figures”, available at:
http://www.cmc.gov.my/what_we_do/ind_dev/IPR%202005.pdf
[31] Wong, C. C. and P. L. Hiew (2005). “Correlation Betweens Factors Affecting the
Diffusion of Mobile Entertainment in Malaysia.” IEEE Xplore: 620.
[32] Lee, K.s (2006), “More youngsters using handphone”, New Strait Times, 25
January, p.6
[33] Suki, N. M. and N. M. Suki (2007). “Mobile phone usage for m-learning:
comparing heavy and light mobile phone users.” Emerald group 24 no 5: 355-365
[34] C. C. Wong and P.L Hiew. “Factors influencing the Adoption of Mobile
Entertainment: Empirical Evidence from a Malaysian Survey.” Presented at the
International Conference on Mobile Business (ICMB’05), 2005
[35] Wong, C. C. and P. L. Hiew (2005). “Drivers and Barriers of Mobile
Entertainment: Empirical Study From a Malaysian Survey.” IEEE Xplore: 1328
[36] C. C. Wong and P.L Hiew. “Factors influencing the Adoption of Mobile
Entertainment: Empirical Evidence from a Malaysian Survey.” Presented at the
International Conference on Mobile Business (ICMB’05), 2005
[37] Wong, C. C. and P. L. Hiew (2005). “Mobile Entertainment: Model Development
and Cross Services Study.” IEEE Xplore: 1357
[38] Vrechopoulos et al, “Interest Shopping Adoption by Greek Consumers”, European
Journal of Innnovation Management, Vol 4, no.3,pp.142-152, 2001
[39] Goodman, D.J., “The Wireless Internet: Promises and Challenges”. IEEE
Computer, Vol.33.no 7, pp. 36-41, 2000.
[40] TNS Interactive, “ Global E-commerce Report 2001” Taylor Nelson Sofres
Interactive: London. pp.1-229, 2001.
[41] Ollila, M, et al. Mobile Entertainment Industry and Culture: Barriers and Drivers,
MGAIN, UK, 2003
the AirAsia Company strategic management: “ How AirAsia can be a leader in the lowest cost carrier in the airplane industry”
1.0 Introduction
“Without a strategy the organization is like a ship without rudder, going around in circles”. (Joel Ross and Michael Kami)
Nowadays, the competition among airplane industries is very tough. According to Daniel Chan (2000), with just about two years to go to the turn millennium, air wars over Asia are hotting up, with some of the world’s biggest airlines engaged in intense over Asian skies[1]. Each Of Airplanes Company in the world trying to conduct some strategies to compete with another competitor in their industry. A lot of airplane companies come out with different strategies to make their company better than their competitors. To compete with their competitor in the business environment, a company needs to make a strategy to achieve their long terms objective and can be successful for doing their business.
Moreover, to be successful in their long terms objective and their business, company need to identify their strategic management, because with good strategic management company can be achieving their vision and mission to achieve the successfulness in their business. Regarding this issues, the strategic management becomes important due to the following reason such as globalization to survival their business, and than e-commerce become the critical success to the company nowadays.
The two following reason are need to take into consideration, and than to be successful in the company management, a company needs to consider the company ability and how to integrating it with the as well as main factor in the internal and external factor. The main factor in the internal and external factor can be identified with SWOT analysis. The internal factor can take a look into strength and weakness in a company, and for the external factor, a company can look at opportunities and threats in the external environment.
Furthermore, according to Daniel Chan (2000), the airline industry is a unique and fascinating industry. It captures the interest of a wide audience because of its glamour, reach, and impact on the large and growing numbers of consumers/travelers worldwide[2]. Based on this statement, airline industry become the greatest opportunity for AirAsia. The growing numbers/travelers worldwide can be the wonderful opportunity for AirAsia for running their business. In addition, to captures and attract a customer to choose AirAsia as an airline option, AirAsia need to develop and create a wonderful strategy and come out with special offering to their customer to successfully in their business.
On this paper, I would like to identify and analyze the AirAsia Company strategic management: “ How AirAsia can be a leader in the lowest cost carrier in the airplane industry”. I’m interested to more deeply identify and analyze the strategic management in AirAsia Company because AirAsia have a lot of achievement and awards since year 2001 until present and than they have the greatest strategy which is can make AirAsia to be a leader in the world’s low cost carrier in airline industry.
And than, AirAsia is one of the companies with good company strategic management and has a successful story in the airplane industry in the world. AirAsia now becoming the leading low cost carrier airline in the world and the achievement that AirAsia received to ascertain that AirAsia is one of the best airplane companies. The achievement that AirAsia received in 2009 on the last awards and recognition is the best low cost airline in the world.
In Addition, on this paper will be structured into four sections. Section 1.0 is introduction, Section 2.0 covers about AirAsia Current issues, in this section will be discusses about why AirAsia need to consider a strategy, and AirAsia current issues. Section 3.0 mainly discusses about AirAsia business strategy, this section also will be discusses about why AirAsia stressed to be low cost carrier in airline industry, AirAsia SWOT (strength, weakness, opportunity, and threat) analysis, and also AirAsia business strategy to solve the current issues. And than, section 4.0 would be the last section is conclusion for this paper.
2.0 AirAsia Current issues: how to be low cost carrier leader in airline industry
On this section, I will discuss about the AirAsia current issues: how to be low cost carrier in airline industry. This section involve, why AirAsia need to consider a strategic management, and than what is the current issues that happen in AirAsia Company. This section will discusses the importance of developed and consider strategic management in AirAsia Company, and identify of current issues in AirAsia Company.
2.1 Why AirAsia need to consider a strategic management
Why a company needs to consider a strategic management nowadays? According to Daniel Chan (2000), since the 1970s, the competition for the Asian air travel market has always been intense. This became more intense in the 1990s as traffic volumes were squeezed[3]. Based on that statement, the competition among airplane industry will become more grow, traffic volume also would be increase, and also the Asian air travel market has always been intense. When the competition in the airplane industry becoming though, complex, and rapidly change, AirAsia company as a company that joined in the airplane industry business need to thinking strategically and also must preparing a good strategic management. The AirAsia strategic management needs to effectively and efficiently prepare and implement in the AirAsia company management. Why AirAsia need to consider strategic management? The first reason is because the airline industry is a unique and complex industry[4]. Based on the statement, the complexity and unique of the airline industry, AirAsia need to come out with the greatest strategy to compete with their rival in the same industry. Without the right strategic management, its possible AirAsia could not be able be compete with the complex business environment in the airline industry.
Furthermore, the second reason why AirAsia need to consider a strategic management because in a company nowadays, general management which is the process of achieving organizational goals by engaging in the four major functions of planning, organizing, leading, and controlling may not sufficient and supportive for the organization succeed in the world of complex environments. It concerns about the process to manage the company internally but do not concentrate more on creating competitiveness regarding environments affecting the organization. Even companies adopt general management to sustain profitability by reducing the defects or costs, and improving operations process in order to increase productivity, they may not succeed in the competition because they perform only similar activities better than competitors but do not create distinctive competitiveness.
Additionally, they perform only operational effectiveness but not strategy. Operational effectiveness and strategy are both essential to superior performance but they work in very different ways. Strategy is about competitive position that the company performs different activities from rivals or performing similar activities in different ways. To learn how the companies create strategies and put them into action, the executives or strategists should examine carefully an aspect of strategic management.
Moreover, the organization or company nowadays is faced with constantly changing external environments and needs to ensure that its own internal resources and capabilities are more than sufficient to meet the needs of the external environment. Organizations or companies do not exist simply to survive in the market place but want to grow and prosper in a competitive environment. In order to make sense of what is going on around them, firms must undertake an analysis of their external and internal environment. To understand and how take an action about external and internal environment, a company needs to support themselves with a good strategic management.
Because of this reason, AirAsia need to consider a strategic management as the important things in their company. The strategy that AirAsia need is not just how to reduce cost and make the operational activities running effectively. But, AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully.
In addition, the third reason, why AirAsia company needs to consider and stress to a strategic management? This is because, strategic management becomes important in AirAsia due to the following reasons. The first reason why strategic management becomes important is because the globalization. The globalization consideration impacts virtually all-strategic decisions in a company. The globalization also forced AirAsia Company to survival for business. To see and appreciate the world from the perspective of others has become a matter of survival business.
The underpinning of strategic management hinge upon managers gaining an understanding of competitors, markets, prices, suppliers, distributors, governments, creditors, shareholders, and customers worldwide. The price and quality of firm’s products and services must be competitive on a worldwide basis, not just a local basis[5]. The globalization makes a rapid change in the business environment. Every company has a same chance and opportunity for doing their business. For those company doesn’t aware and take this as important consideration, they will failed to compete with their rival or competitors in their business.
Moreover, the strategic management becoming important due to the following reason is because the rapid development in E-Commerce. Nowadays, E-commerce is becoming a business tool. E-commerce also has become a vital strategic management and allows a company to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, eliminate paperwork, and share information. In total, electronic commerce is minimizing the expense and cumbersomeness, improved products, and higher profitability[6].
In conclusion, Air Asia is need to aware and consider with the strategic management. The reason of the airline industry is a unique and complex industry, not just how to reduce cost and make the operational activities running effectively. But, AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully, and the last one is because the effect of globalization and E-commerce becoming an effective tool in a company nowadays.
Regarding to the importance of strategic management for AirAsia Company, the next part will discusses about the current issues that happened in AirAsia Company.
2.2 AirAsia current issues
The leading low fare airline in the Asia – AirAsia has been expanding rapidly since 2001, to become an award winning and the largest low cost carrier in Asia. With a fleet of 72 aircrafts, AirAsia flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand and Indonesia. To date, AirAsia has flown over 55 million guests across the region and continues to spread its wings to create more extensive route network through its associate companies, Thai AirAsia and Indonesia AirAsia.
Established on 12 December 2001, AirAsia has been such a big phenomenon in airline industry especially in Asia. AirAsia with the ordinary symbol but with strong brand, “now everyone can fly” nowadays has been phenomena in Airlines industry. AirAsia is one of the airline companies who more focused with the strategy how to reduce inefficiency and make it low possible fare in the world. With the cost-efficiency, low complexity and profitability are always the cornerstones of building a strong business.
Furthermore, according to Dawna and Blaise (2005), the most successful carriers came to dominate their hub markets allowing them to exert greater control over pricing and capacity[7]. Based on this statement, the current issues in AirAsia Company are how to achieve to be a lowest carrier in the world in Airplane industry. Regarding to this issues, Dawna and Blaise said, the most successful carrier in the airline industry allowing them to exert greater control over pricing and capacity.
In addition, according to Haddad (2003), the key to their current success has been to cut costs to the bone through lower salaries and reduced overhead[8]. In airline industry nowadays, customer not only looks at the service that airline company offered to them, but the price of the airline ticket also can influencing the customer to use an airline company. AirAsia Company can compete with the other competitor in the airline industry if they can cut costs through lower salaries and reduced overhead.
Moreover, according to Daniel Chan (2000), these moves but a very small price to pay for continued and greater access to the world’s most prospective air travel markets[9]. The very small price are offered to the customer also can give biggest affect in this business. As all airlines in low cost carrier (LCC) industry compete on costs, AirAsia needs to offer the lowest possible fare in order to win the competition in the current markets served as well as new markets[10].
In conclusion, the current issues in AirAsia Company are more focused in the competition of the cost among an airplane industry. AirAsia as an industry company which is more focusing in the low cost carrier airplane industry need to consider to make the lowest possible cost to compete with the other competitors in their airplane industry. To achieve the lowest possible cost, AirAsia Company has some strategy to achieve it. On the next section, I would like to discuss about AirAsia business strategy: how to implement and achieve it.
3.0 AirAsia Business Strategy: how to implement and achieve it.
On this section, I would like to discuss about AirAsia business strategy. On the previous section, it more focused about the importance of strategic management for AirAsia Company and what is the current issue in AirAsia Company that was happening. On this section, would be involved with the question, why AirAsia stressed to be low cost carrier in airline industry. And than what is AirAsia SWOT analysis and how AirAsia solves the current issues in their company.
3.1 Why AirAsia stressed to be low cost carrier in airline industry
Datuk Tony Fernandez as CEO of AirAsia Berhad said his philosophy is very clear: before a business can grow, it needs to have its costs under control. It must be cost-efficient and profitable, and it must create value. Costs that do not add value must be contained, reduced and even eliminated. I have been asked by various people, “How much lower can your cost reduce? You’re already the lowest in the world!” My direct answer is if we do not strive to be more efficient and choose to be complacent – our days are numbered. This is a continuous task we have to face head on year on year; it is the critical ingredient to operate a successful business[11].
Based on the Datuk Tony Fernandez said, AirAsia can be growing in the airline business if they can control their cost. The cost that they have to running there must be efficient and reliable. Everything that can make inefficiencies must be reduced and possibly to eliminate. What a Datuk Tony Fernandez said is very strong opinion about their company to running their business. AirAsia can be possibly competing with another airplane industries if they can make efficiencies to reduce cost and make the low possible fare than another airplane industries.
Furthermore, based on the environmental scanning performed, the demand for low cost carrier (LCC) industry will keep growing rapidly. The LCC industry attractiveness and profitability will attract many full services airlines to launch its version adding the degree of rivalry in this industry. As the implication, AirAsia, current market leader of LCC in Malaysia, Thailand, and Indonesia, will face competition from both existing and new players. In order to sustain its competitive advantage, AirAsia needs to leverage its competency in creating cost advantages across multiple value chains[12]. Based on that statement, AirAsia need to make a consideration and more stressed to be lowest cost carrier in the airline industry. The demand for lowest cost carrier is will be growing rapidly, it can be the great opportunity for AirAsia Company to run their business.
In addition, AirAsia business strategy also centered on cost leadership. According to Porter’s generic strategies (1985), one of the generic strategies is the cost leadership[13]. The cost leadership in AirAsia Company is already approving because AirAsia more focused and concentrated in the lowest cost carrier in airplane industries. AirAsia wanted to be a leader in the lowest cost for run their business. AirAsia builds and sustains its competitive advantage by providing services at a price that simply lower than competitors price. Operation effectiveness and outstanding efficiency are the two main characteristics of low cost business including in AirAsia.
Moreover, AirAsia believes in the no-frills, hassle-free, low fare business concept and feels that keeping costs low requires high efficiency in every part of the business. Efficiency creates savings that are then passed on to guests so that affordable air travel can become a reality. Through AirAsia philosophy of ‘Now Everyone Can Fly’, Air Asia has sparked a revolution in air travel with more and more people around the region choosing AirAsia as their preferred choice of transport. As Air Asia continuously strives to promote air travel, AirAsia also seek to create excitement amongst their guests with they range of innovative and personalized service.
In conclusion, with there believes to make a low possible fare for to the customer, AirAsia was becoming an Airline company that is chosen by so many customers. The best philosophy of AirAsia ‘now everyone can fly’ means to giving an opportunity to all the people to flight with the lowest possible fare and making them can flight even they only have the less money.
In conclusion, the reason why AirAsia more stressed to be low cost carrier in airline industry because:
- AirAsia believes to compete in the airline industry, it must be cost-efficient and profitable, and it must create value. Costs that do not add value must be contained, reduced and even eliminated.
- Demand for low cost carrier (LCC) industry will keep growing rapidly.
- And than the best philosophy of AirAsia ‘now everyone can fly’ means to giving an opportunity to all the people to flight with the lowest possible fare.
The lowest possible fare that AirAsia was implementing is the best strategy that they are used to compete with their rivals in the airplane industries. AirAsia believes with the lowest fare that they are offering to the customer, they can attract customer more than their rival in the airplane industries.
In addition, to achieve the lowest possible fare in the low cost carrier airplane industry, AirAsia also need to make analysis about their SWOT (strength, weakness, opportunity, and threat). On the next part, I would like to discuss about the AirAsia SWOT analaysis
3.2 AirAsia SWOT analysis
Strengths, Weaknesses, Opportunities and Threats Analysis are one of the important things in a company. This SWOT analysis is for identifying the internal (strength and weakness) and external (opportunities and threats) factor for AirAsia Company to achieve their goals and objectives to be low cost carrier company in airline industry. To be successful in the company management, a company needs to consider the company ability and how to integrating it with the as well as main factor in the internal and external factor. The main factor in the internal and external factor can be identified with SWOT analysis. On this section, I will identify one by one the strength, weakness, opportunities and threats in AirAsia Company. The purpose of this analysis are for identify the internal and external factor that AirAsia need to consider to be low cost carrier in airplane industry. These are the strength, weakness, opportunities, and threat in AirAsia.
- Strengths
- Air Asia has a very strong management team with strong links with
governments and airline industry leaders.
This is partly contributed by the diverse background of the executive management teams that consists of industry experts and ex-top government officials. According to Johnston (1996), without the protection of national airlines brought about by deregulation, building alliances as strategy became necessary for many airlines to stay competitive and gain access to a global market too huge for any existing airline to dominate[14]. The strong links with the government and airline industry leaders is one of the strength of AirAsia Company.
For example, Shin Corp (formerly owned by the family of former Thai Prime Minister – Thaksin Shinawatra) holds a 50% stake in Thai AirAsia. This has helped AirAsia to open up and capture a sizeable market in Thailand. And also, with their strong working relationship with Airbus, they managed to get big discount for aircraft purchase which is also more fuel efficient compared to Boeing 737 planes which is being used by many other airlines
- The management team is also very good in strategy formulation and execution.
` The strategy that they have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines is US and Europe. They are Ryanair’s operational strategy (no frills, landing in secondary airport), Southwest’s people strategy (employee comes first) and Easyjet’s branding strategy (linking with other service providers like hotels, car rental).
- AirAsia’s brand name is well established in Asia Pacific.
Besides the normal print media advertising & promotions, AirAsia’s top management also capitalized on promotions through news by being very “media friendly” and freely sharing the latest information on Air Asia as well as the airline industry. Their partnership with other service providers such as hotels and hostels, car rental firms, hospitals (medical tourism), Citibank (AirAsia Citibank card) has created a very unique image among travellers. Alliance with Galileo GDS (Global Distribution System) that enables travel agents from around the world to check flight details and makes bookings have also contributed to their string brand name.
Air Asia’s local presence in few countries such as Indonesia (Indonesia AirAsia) and Thailand (Thai AirAsia) has successfully “elevated” the brand to become a regional brand beyond just Malaysia. The links with Manchester United (one of the world’s most famous football teams) and AT&T Williams Formula One team have further boosted their image to a greater extend beyond just the this region
- AirAsia is the low cost leader in Asia.
With the help of AirAsia Academy, AirAsia has successfully created a “low-cost airline mentality” among their workforce. The workforce is very flexible and high committed and very critical in making AirAsia the lowest cost airline in Asia.
- The excellent utilization of IT
The excellent utilization of IT have directly contributed to their promotional activities (email alerts and desktop widget which was jointly developed with Microsoft for new promotions), brand building exercise (with over 3 million hits per month and on the most widely surfed booking engines in the world) as well keep the cost low by enabling direct purchase of tickets by consumer thus saving on airline agent fees
- Weaknesses
- Air Asia does not have its own maintenance, repair and overhaul (MRO) facility.
It may be a good strategy when they first started with only Malaysia as the hub and few planes to maintain. But now, with few hubs (Malaysia, Thailand and Indonesia) and over 100 planes currently owned and about another 100 planes to be received in the next few years, AirAsia have to ensure proper and continuous maintenance of the planes which will also help to keep the overall costs low. It is a competitive disadvantage not to have its own MRO facility
- AirAsia receives a lot complaint from customers on their service.
Examples of complaints are around flight delays, being charged for a lot of things and not able to change flight or get a refund if customers could not make it. Good customer service and management is critical especially when competition is getting intense.
- Opportunities
- There are 2 major events that are taking place now or going to take place in
less than 6 months from now.
First, is the ever-increasing oil price. Second, is the “ASEAN Open Skies” agreement that has been reached. The increasing oil price at the first glance may appear like a threat for AirAsia. But being a low cost leader, AirAsia an upper hand because its cost will be still the lowest among all the regional airlines. Thus, AirAsia has a great opportunity to capture some of the existing customers of full service and other low cost airline’s customers. However, there will be also some reduction in overall travel especially by casual or budget travelers.
Second, is the “ASEAN Open Skies” allows unlimited flights among ASEAN’s regional air carriers beginning December 2008. This will definitely increase the competition among the regional airlines. However, with the “first mover” advantage as well as its strengths in management, strategy formulation, strategy execution, strong brand and “low-cost” culture among its workforce, this agreement can be seen as more of an opportunity.
- There is also some opportunity to partner with other low cost airlines.
As Virgin to tap into they exist strengths or competitive advantages such as brand name, landing rights and landing slots (time to land).
- The population of Asian middle class will be reaching almost 700 million by 2010.
This creates a larger market and a huge opportunity for all low cost airlines in this region including AirAsia.
- Threats
- Certain rates like airport departure, security charges and landing charges are beyond the control of airline operators
This is a threat to all airlines especially low cost airlines that tries to keep their cost as low as possible. For example, Changi airport in Singapore charges SGD21 for every person who departs from Singapore.
- AirAsia’s profit margin is about 30% and this has already attracted many competitors.
Most of the full service airlines have or planning to create a low cost subsidiary to compete directly with AirAsia. For example, Singapore Airlines has created a low cost carrier Tiger Airways.
- Users’ perception that budget airlines may compromise safety to keep costs low.
In conclusion, the SWOT analysis that AirAsia have is on of the major component to make AirAsia more strength in their business and can make they are able to compete with the same low cost carrier airline industry.
After I’m discussed about the SWOT analysis, I would like to discuss about the AirAsia strategy to solve the current issues: How AirAsia can be a leader in the lowest cost carrier in the airplane industry.
3.3 AirAsia business strategy to solve the current issues
Regarding to the airplane industries issues that is low cost carrier was becoming an important issue if AirAsia want to compete with other airplane industry that is involved with low cost carrier business.
The strategy that AirAsia was implementing to make they are being a successful in low cost carrier and can compete with other competitors in this field of business are:
- Maximized IT and implementing E-commerce in AirAsia business
Nowadays, E-commerce is becoming a business tool. E-commerce also has become a vital strategic management and allows a company to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, eliminate paperwork, and share information. In total, electronic commerce is minimizing the expense and cumbersomeness, improved products, and higher profitability[15]. According to this statement, E-commerce can change the way of doing business nowadays. E-commerce becomes a major success to Airplane Company to make effectively and efficiency in their business.
AirAsia is one of the airplane companies, which is implementing E-commerce and maximized their information technology usage to make the efficiency and effectively in their company and make possible low cost carrier in their business. According to Pultorak (2004), when the business strategy and IT are aligned, the IT infrastructure can continuously sense the changing business needs and respond by provisioning or redeploying resources to match the demands of the business[16].
Moreover, to maximize their IT, AirAsia implemented current IT such as yield management system (YMS), computer reservation system (CRS), and enterprise resource planning (ERP) system[17]. Lets we discuss the current IT that AirAsia implemented one by one.
Yield management system as revenue management system it understands, anticipates, and reacts to the behavior of customer to maximize revenues for the organization. In this system, AirAsia used it to takes into account the operating costs and aids AirAsia to optimizes price and allocate capacity to maximize expected revenues.
The optimization is done on two levels in AirAsia:
v Seat (Every seat is considered an opportunity to maximize revenue.
Seats are available at various prices in different points of time. A reservation done at a later date will be charged more than the one done earlier – for the same seat)
v Route (By adjusting prices for routes/destinations that have a higher demand when compared to others).
The effective method however is to combine these two levels for all flights, all routes so that both the seat and the route are effectively priced for all the flights.
As a result, by using this yield management system, AirAsia can understands the behavior of their customer and offering the effectives and efficiency strategy and also can allocate capacity to maximize the expected revenue. By this system, AirAsia can make efficiency to know their customer using IT technology with lowest cost.
Furthermore, the other system that AirAsia implemented is customer reservation system (CRS); it is an integrated web-based reservation and inventory system. It includes Internet; call center, airport departure control and more. It is a direct sales engine that effectively eliminates the middleman (travel agents) and the sales commissions that need to be paid to them.
By using this system, AirAsia can reduce the cost and eliminates the middleman (travel agents) and the sales commission to pay them. After that, this system are very customer friendly because the entire customer if want to buy or make a reservation a ticket directly via online, and no need to come to the ticket counter. In conclusion, by using this system effectively, efficiency, customer satisfaction, fast and secure in buying a ticket already met. It means the lowest cost can possibly achieve.
And than, the last system that AirAsia used in maximized IT to meet the lowest cost during their business activities is the implementation of enterprise resource system (ERP). From the view of managers in a company, the emphasis is on the word planning; ERP represents a comprehensive software approach to support decisions concurrent with planning and controlling the business[18].
Based on the definition, ERP is the system that integrated comprehensive software to make the IT system is more effectively and efficiently. By implementing this package AirAsia is looking to successfully maintain process integrity, reduce financial month-end closing processing times, and speed up reporting and data retrieval processes, (Microsoft Malaysia)[19]. In addition, it is a system focusing on capturing transactions in daily operations and helping AirAsia to save its operational costs as well as to increase the efficiency and integrity in its operation (Microsoft Press Pass, 2005)[20]
As a result, the system that AirAsia implemented by using strategy to maximized the IT system (yield management system (YMS), computer reservation system (CRS), and enterprise resource planning (ERP) system) can be a great strategy to make AirAsia more effective and efficiency and possibly able to reduce the cost and eliminated inefficiency in their business.
- Operation effectiveness and outstanding efficiency
One of the AirAsia strategies to solve the current issues/problem in the lowest carries competition among the LCC airline industry is to make operation effectiveness and outstanding efficiency. How AirAsia implemented this strategy to make operation effectiveness and outstanding efficiency? To make this strategy successfully implemented:
- AirAsia move from the traditional business into modern business by implementing E-commerce and maximize the information technology (IT) in their business.
The implementation of E-commerce can reduce the cost of travel agents, and less of ticketing paper cost.
- AirAsia also choose the route by adjusting prices for routes/destinations that have a higher demand when compared to others.
- And than AirAsia also trying to reduce by using better maintenance management.
According to Gloker (2002), by using the better maintenance management, AirAsia can save large proportion of its maintenance cost contributes approximately 9% to the overall cost of an airline[21].
In conclusion, those are the Air Asia strategy to make Operation effectiveness and outstanding efficiency in their business. With this strategy, AirAsia can achieve their goals and objective into the lowest carrier airplane in the world.
- Implemented outsourcing in their business
To make the lowest carrier in airplane industry, AirAsia also face with challenged to make a decision in terms of efficiency in their business how it will acquire the system. AirAsia have two options in this strategy: in house building or outsourcing. In the strategy that AirAsia used and implemented, AirAsia more preferred to used or implemented outsource system in this strategy. The decision in outsourcing has several benefits such as cost, competency, control, and also competitive advantage.
By implemented outsourcing in their business strategy will provide:
- Cost benefits to AirAsia because it can be eliminated in more resource consumption (time financial).
- And than for the competency, AirAsia competency is not in IT. By implemented outsourcing in the IT field, AirAsia also can reduce cost in IT system activities which is can make possible more cost in their business.
- After that, by using outsourcing, AirAsia can easily to control all the system that is outsourced to another vendor or company. The control in this strategy also gives benefits because AirAsia function only to be a controlled a system that is AirAsia used.
- By using outsourcing, AirAsia also can reduce risk, and it can make AirAsia not spend their financial to cover the risk factor in this strategy.
- The implementation of outsourcing also can give competitive advantage in AirAsia because the strategy can be greater rather than created by AirAsia itself.
Furthermore, some of outsourced example that AirAsia did are in AirAsia computer reservation system (CRS) by Navitaire Open Skies Technology Company, and than implementing enterprise resource planning (ERP) by Microsoft Corporation, and also implementing AirAsia X. By implemented outsourcing more better than in house operation, because it can give more lowest cost, reduce risk, more effectively and efficiently, and also can easily control by AirAsia and than more fast in AirAsia company.
4.0 Conclusion
The competition among airplane industries is very tough. Each Of Airplanes Company in the world trying to conduct some strategies to compete with another competitor in their industry. To compete with their competitor in the business environment, a company needs to make a strategy to achieve their long terms objective and can be successful for doing their business. The strategic management becomes important due to the following reason such as globalization to survival their business, and than e-commerce become the critical success to the company nowadays. a company needs to consider the company ability and how to integrating it with the as well as main factor in the internal and external factor.
How AirAsia can be a leader in the lowest cost carrier in the airplane industry? To be a leader in the low cost carrier, firstly, AirAsia need to consider about their strategic management. The reason why need to consider strategic management because the first reason is because the airline industry is a unique and complex industry. The second reason, the strategy that AirAsia need is not just how to reduce cost and make the operational activities running effectively. But, AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully, the third reason because a globalization and implementing E-commerce.
The current issues in AirAsia Company are more focused in the competition of the cost among an airplane industry. AirAsia as an industry company which is more focusing in the low cost carrier airplane industry need to consider to make the lowest possible cost to compete with the other competitors in their airplane industry.
How AirAsia can solve the current issues to be a low cost carrier leader in airplane industry? The first is to identify and analyze the SWOT analysis, and than to solve the current issues with some strategies such as Maximized IT and implementing E-commerce in AirAsia business, Operation effectiveness and outstanding efficiency, and the last one is implemented outsourcing in the AirAsia business.
References
Chan, D. (2000). “Air wars in Asia: competitive and collaborative strategies and
tactics in action.” Emerald management and development 19: 473
Chan, D. (2000). “The development of the airline industry from 1978 to 1998 A strategic global overview.” management development 19(Emerald journal ): 489
Chan, D. (2000). “Air wars in Asia: competitive and collaborative strategies and tactics in action.” Emerald management and development 19: 473 – 488.
Chan, D. (2000). “Air wars in Asia: competitive and collaborative strategies and tactics in action.” Emerald management and development 19: 484.
http://www.scribd.com/doc/2516371/Strategic-Management
http://www.scribd.com/doc/2516371/Strategic-Management
Rhoades, D. L. and B. W. Jr (2005). “Strategic imperatives and the pursuit of quality in the US airline industry.” managing service quality 15(Emerald journal): 344.
Haddad, C. (2003), “Catch him if you can”, Business Week, September 15, pp.93-4
Chan, D. (2000). “Air wars in Asia: competitive and collaborative strategies and tactics in action.” Emerald management and development 19: 483.
Kho, C., S. H. Aruan, et al. (2005). AirAsia- Strategic IT Initiative. Faculty of Economics and Commerce University of Melbourne: 3.
Kho, C., S. H. Aruan, et al. (2005). AirAsia- Strategic IT Initiative. Faculty of Economics and Commerce University of Melbourne: 8.
Porter, M.E. (1985). “Competitive Strategy: Creating and Sustaining Superior Performance.” New York: The Free Press.
Johnston, H. (1996), “Partnership Up in the Air”, Asian Business, August, p.53
http://www.scribd.com/doc/2516371/Strategic-Management
Pultorak, D. (2004, July). Beyond Alignment. Business and IT Sunchronization.
Retrieved from http://us.foxit.net/download/beyond_align.pdf 22nd October 2005
Kho, C., S. H. Aruan, et al. (2005). AirAsia- Strategic IT Initiative. Faculty of Economics and Commerce University of Melbourne: 9.
Vollman, Thomas E, Berry, W.L, (2005). Manufacturing planning and control for supply chain management. Fifth edition. McGraw-hill .p-109
Microsoft (2005) Budget Airlines in Asia Pacific Fly High on Microsoft Business Solutions. Retrieved from http://www.microsoft.com/malaysia/press/linkpage4285.asp on 20th October 2005
Gloker, et.al. (2002), The Airline Industry More Than Just Transportation
[1] Chan, D. (2000). “Air wars in Asia: competitive and collaborative strategies and
tactics in action.” Emerald management and development 19: 473
[2] Chan, D. (2000). “The development of the airline industry from 1978 to 1998 A strategic global overview.” management development 19(Emerald journal ): 489
[3] Chan, D. (2000). “Air wars in Asia: competitive and collaborative strategies and tactics in action.” Emerald management and development 19: 473 – 488.
[4] Chan, D. (2000). “Air wars in Asia: competitive and collaborative strategies and tactics in action.” Emerald management and development 19: 484.
[5] http://www.scribd.com/doc/2516371/Strategic-Management
[6] http://www.scribd.com/doc/2516371/Strategic-Management
[7] Rhoades, D. L. and B. W. Jr (2005). “Strategic imperatives and the pursuit of quality in the US airline industry.” managing service quality 15(Emerald journal): 344.
[8] Haddad, C. (2003), “Catch him if you can”, Business Week, September 15, pp.93-4
[9] Chan, D. (2000). “Air wars in Asia: competitive and collaborative strategies and tactics in action.” Emerald management and development 19: 483.
[10] Kho, C., S. H. Aruan, et al. (2005). AirAsia- Strategic IT Initiative. Faculty of Economics and Commerce University of Melbourne: 3.
[12] Kho, C., S. H. Aruan, et al. (2005). AirAsia- Strategic IT Initiative. Faculty of Economics and Commerce University of Melbourne: 8.
[13] Porter, M.E. (1985). “Competitive Strategy: Creating and Sustaining Superior Performance.” New York: The Free Press.
[14] Johnston, H. (1996), “Partnership Up in the Air”, Asian Business, August, p.53
[15] http://www.scribd.com/doc/2516371/Strategic-Management
[16] Pultorak, D. (2004, July). Beyond Alignment. Business and IT Sunchronization.
Retrieved from http://us.foxit.net/download/beyond_align.pdf 22nd October 2005
[17] Kho, C., S. H. Aruan, et al. (2005). AirAsia- Strategic IT Initiative. Faculty of Economics and Commerce University of Melbourne: 9.
[18] Vollman, Thomas E, Berry, W.L, (2005). Manufacturing planning and control for supply chain management. Fifth edition. McGraw-hill .p-109
[19] Microsoft (2005) Budget Airlines in Asia Pacific Fly High on Microsoft Business Solutions. Retrieved from http://www.microsoft.com/malaysia/press/linkpage4285.asp on 20th October 2005
[20] Ibid
[21] Gloker, et.al. (2002), The Airline Industry More Than Just Transportation.
Reducing Product Developent Cycle Time by using Concurrent Engineering Methodology
In today’s business worlds, corporation or organization must be able to react to the changing of market needs rapidly, effectively and responsively. Only corporation that have ability to adapt with today changing which is very fast will be able to compete with another competitors in terms of business related. The needs from the customer have been coming with a lot of variety and unpredictability. That’s why they must be able to reduce their time to market and adapt to the changing environments. The understanding of customer needs also one of the important key to gain effectively communication what customer really wants and what customer expectation.
The satisfaction of the customer needs is the highest priority for the corporation in terms of running their business in today’s world. Moreover, to build customer satisfaction need made decisions quickly and they must done right in the first position. Then, corporation’s no longer waits time to bring new products to market. As a result, concurrent engineering nowadays be chosen as a way of bringing rapid solutions to product design and development process. In addition, for being able of bringing as a rapid solution to product design and development process, corporation must take an action which is alter their product and product development cycle time to complete diverse tasks concurrently. The goal of concurrent engineering is to make significant reductions in designs and development life cycle for creating a new product. The corporation or organization need to concern about the product development process, because leading corporation or organization always treated product development process as strategic process because they have always recognized it as key component of their competitive strategy
On the other hand, the concurrent engineering is still the new system and not all corporations are able to implement this system. The reason is because concurrent engineering is a process that must be reviewed and adjusted for continuous improvement of engineering and business operations, and also concurrent engineering is a complex strategic plan that demands full commitment and have another factor to mention. There is any several reason why implementing the concurrent engineering have limitation or boundaries. On this paper, I’m trying to identifying what is product development cycle, what is concurrent engineering, how importance an organization or corporations concerning in the product development cycle time, what is difference between traditional organization and an organization that implementing concurrent engineering methodology, bring the current issues in concurrent engineering and trying to find the answer to solve it and also making connection how to reducing the product development cycle time by using concurrent engineering methodology.
As I mentioned, the product development cycle time is one of the component that need to be highlighted because it can give valuable benefits to reduce the product development process and can creating the product development more faster cheaper, better, effective and efficient way.
How to reducing the product development cycle time by using concurrent engineering methodology? Is it possible? Why using concurrent engineering methodology to reducing the product development cycle time? How concurrent engineering works? Before we answer this entire question, let’s we understand first, what is product development cycle time and concurrent engineering is all about.
In the process of producing products or goods in manufacturing system, cycle time have highest role in the manufacturing system. The cycle time required to complete a given process which is involved with a process that identifying and implementing more efficient ways to do things. By concerning in product development cycle time, it can require eliminating or reducing non value added activity such as reduced costs, improved communications, schedule integrity, and time improvement to developed new products. In addition, concerning in the product development cycle time also can make our products better, faster, cheaper than the other products and also the quality of the product also can be taken care of and protected. The product development cycle time is the key point to created the better products. Therefore, the product development cycle time by using traditional way has been to change to concurrent engineering.
What is concurrent engineering? I will adopt the following definition of concurrent engineering by researcher at the Institute For Defense Analysis, Winner et. al., 1988; p. 2:
“ A systematic approach to the integrated, concurrent design of their product and their related process, including manufacturing and support. This approach is intended to cause the developers, from the outset, to consider all elements of the product life cycle from conception through disposal, including quality, cost, schedule, and user requirements.”
Furthermore, according to Dean and Unal (1992):
“Concurrent engineering is designing for assembly, availability, cost, customer satisfaction, maintainability, manageability, manufacturability, operability, performance, quality, risk, safety, schedule, social acceptability, and all other attributes of the product”.
In short, concurrent engineering is “systematic” approach. Systematic approach means the process in product development need to starting from the beginning until the end of process systematically. This approach in concurrent engineering is a business strategy that replaces the traditional product development process in which tasks are done in parallel. This strategy by using concurrent engineering focuses on the optimization and distribution of a firm’s resources in the design and development process to ensure an effective and efficient product development process.
Moreover, concurrent engineering also consider all element of product life cycle from conception through disposal. Using concurrent engineering methodology can reduced product development cycle time process in creating new product. In addition, using concurrent engineering methodology can make faster development and a reduction time to market and would be give a competitive advantage over competitors to take longer to respond to market changes, customer needs and new technologies.
And than, how concurrent engineering works to reduced the product development cycle? There is a lot possibilities by using concurrent engineering it can reduce the product development cycle time. There are any advantages and disadvantages if we are using and implementing the concurrent engineering methodology to reduce the product development cycle time process. Furthermore, implementing concurrent engineering methodology also has several barrier and boundaries that need to notice.
The reduction in product development life cycle and the effectiveness concurrent engineering methodology to be implementing will be highlighted on this paper, because I’m trying to find the connection between the product development life cycle and possibility to reduce the product development life cycle using concurrent engineering methodology. And than, how it can work and implement in the industrial sector effectively and efficiently.
On the business competition nowadays, organization or corporation who have ability to adapt with the rapidly changing environment will be able to resist with all the different conditions and situations that is can make their corporation to be leader in their business sector. A number of recent national studies on economic productivity have concluded that, in order for U.S manufacturers to regain their competitive edge in the world market, they must only cut costs and improve quality, but also reduce product development time and deliver products and services that meet customer demands.
Based on the competitive edge issues, an organization need to find the greatest way to solve these issues to regain their competitive edge in the world market. Moreover, an organization or corporation can’t keep and unmoved themselves only by using traditional organization approach nowadays. They need to change and find the systematic way and also implement the appropriate method to make their company can be adaptable with the business-changing environment. According to Nevins and Whitney, 1989, the reason why an organization needs to change the traditional organization is because complexity of the activities involved. And than, there is too many coordination requirement and separated functions between people in management and people in engineering whose can make big gap that can affected and give bad impact in the productivity of organization or corporation. Moreover, according Sakakibara & Westney, 1985, they have had persistent problems in developing quality new products, which require organizational integration.
As a result, one of the methodologies found to solve these issues that is concurrent engineering. Why concurrent engineering? Why the organizations need to use concurrent engineering? The answer is according to Nevins and Whitney, 1989. because concurrent engineering represents the way of the future of managing design and manufacturing. In addition concurrent engineering also the fundamental of changes in business environment and changes in design and manufacturing technologies. And than according to Bower & Hout, 1988, time based competition issues has becoming increasingly factor for market success[8]. Based on the issues, Concurrent engineering is one of the methods whose can shortening of the product development cycle with considering of performance in dimension of quality.
On the other hand, concurrent engineering as a method is difficult to implement because in most organization, this new mode of problem solving using concurrent engineering represents radical departure from the traditional way of conducting daily engineering activities. Hence it entails a process of organizational change. Moreover, the lack of expertise, less employees acceptance, and high cost is a several issues in implementing concurrent engineering technology to reduce the product development cycle time to give effectively and efficiently in the organization or corporation. On this paper, I will trying to bring this issues and find the answer how to implementing the concurrent engineering methodology in organization or corporation to reducing the product development life cycle which it can make shorter the process to create new product with low cost, high quality, effective, efficient, and fast.
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Management Of Technology 