Question

Question:

Review AirAsia: The World's Lowest Cost Airline and discuss the concept of cost advantage.

Review the Harley-Davidson Inc., 2018, Case 7 in your textbook and discuss the concept of differentiation advantage.

A case study is a puzzle to be solved, so before reading and answering the specific questions, develop your proposed solution by following these five steps:

1. Read the case study to identify the key issues and underlying issues. These issues are the principles and concepts of the course area which apply to the situation described in the case study.
2. Record the facts from the case study which are relevant to the principles and concepts of the course area issues. The case may have extraneous information not relevant to the current course area. Your ability to differentiate between relevant and irrelevant information is an important aspect of case analysis, as it will inform the focus of your answers.
3. Describe in some detail the actions that would address or correct the situation.
4. Consider how you would support your solution with examples from experience or current real-life examples or cases from textbooks.

do initial analysis and then read the discussion questions. Typically, you will already have the answers to the questions but with a broader consideration. At this point, you can add the details and/or analytical tools required to solve the case.

Case Study Question:

Discuss how AirAsia achieves a cost advantage and how Harley-Davidson achieves a differentiation advantage. Provide an in-depth analysis for both companies as to how they achieve their advantages

Answer 1

Air Asia- Concept of cost advantage

Air Asia is one of the leading Low cost airline in the Asia. It constitute almost 72 Air crafts and still continues to expand their flies for creating networks with their associated companies. The company is very much concerned in the process on managing the internal functions but lack in providing exact care for the company's competitiveness for the  environment which affects the whole organization. The company also adopts management mode for the profitability to gets sustained. This management is done in order to decrease cost and for improving the process in operations, this process is done in order to increase the company's productivity. The company still needs to gain some of the strategies which can help them to achieve a competitive stage where the company needs to perform activities from those companies whose targets are also the same. Still being a lower cost leader the company can have a status of more power when compared to other companies. This power has been gained, is because the cost that the company is offering is lower when compared to other airlines. So it has been concluded that the Air Asia company is having a wider opportunity for achieving its existing customers in maintaining full service and also for those customers who prefer other lower cost airline companies.

Harley-Davidson- Achieves a differentiation advantage

Harley-Davidson is an American based company having a label of motorcycle manufacturing company. The company is named for its famous custom motorcycle designing. The differentiation strategies of the company are mainly based on the customer's psychological and social needs. In order to establish those strategies, the company's external and internal source of competitive advantages plays an important role in it. Differentiation advantage can be gained by evaluating those activities that each customers carries out. Creating values to customers is another important aspect regarding the differentiation advantage. These values can be maintained by giving events which have been sponsored for those riders who rides Harley-Davidson motorcycles, giving away the appropriate atmosphere for test riding, and also to provide activities related with owners club. This club is mainly meant for those persons who possess exactly the same goal/interest. Mainly differentiation strategies are in need of thoroughly analyzing the exact need of the customers apart from its strategies which are based on cost as well. These differentiation strategies also are in need of chains having various firm values which in turn is having a connection with the customer as well as the value chain of the firm. By depending upon the products and services nature, so offered by the company, differentiation advantages can be observed as Experienced Goods, Network Goods and Observable Goods.

In Experienced Goods, the one who buys the product come across a tough situation where he needs to analyse the exact quality of the product purchased where he is in need of using it.

In Network Goods, the initial buyer's value increases while the buyers and users number gets rises up.

In Observable Goods, the one who purchases the product without any doubt can make an evaluation regarding the product's quality.

The Speciality of the company is that they provide a different motorcycle and a different riding atmosphere and a brand recognition through which they can achieve Differentiation advantage.