Question

Referring to porter's model of the five forces of competition, is the above strategy suitable for airasia to achieve a better position in the industry? what are the risks of using the strategy?

Answer 1

Defining the market is really about making three decisions.

Who, in rough terms, are we selling to?Where, roughly, are we going to operate geographically?How would we generally describe the product or service market we are in?

Defining the arena can be quite straightforward if, say, you are selling bread in grocery stores in Canada – or quite difficult if you are merging medical expertise with technology and it is unclear whether the United States or Europe is more likely to adopt the solution.

Well-defined arenas tend to focus the marketing planning and lead to greater success.

Market size and growth rate

This is notoriously tricky. In rare instances, the market size for your exact arena will be published and readily available online, or in a report you can pay for. In most instances, the market size will have to be estimated or calculated as you will have defined your arena in a way that is different or not typically tracked. When estimating or calculating a market size, the goal is normally to get to a gross sales or annual revenue figure. Using three or more methods – no one method will ever be right – will let you arrive at a range that is typically sufficient. Ultimately, it's about confirming that the market is big enough.

Growth rates will either be findable, or they can be calculated by looking back over the previous few years for a trend and then extrapolating it forward. It is unwise to go back more than three years, since recessionary numbers are not good future indicators.