The current business environment is characterized by a considerable level of competitive rivalry and as a result businesses have to constantly reengineer their internal processes in order to develop a sustainable competitive advantage.
This is the situation in the airline industry and as a result Air Asia has to develop a sustainable competitive advantage. It is believed that the installation of the e-commerce application will facilitate the implementation of the most important strategy: maximizing access to information.
This is one of the most important strengths for the company not only because the company will be in a position to collect more information about its customers, but also because the customers will be able to get more information as well. As a result, this will serve as an advertising tool for the company. In this respect, the company will not be facing any problem because the strategy is being implemented through a joint venture with Microsoft.
The airline industry is characterized by a high level of competitive intensity and therefore Air Asia has to constantly reengineer its internal operations in order to build and maintain a competitive edge. In this respect, the strategic focus of the company is cost minimization. According to Michael Porter’s framework for strategy formulation, a business organization has three strategies at its disposal in order to build and maintain a competitive advantage.
These are differentiation, cost minimization and focus (cited in Fred, 2006). Although Air Asia might be said to be implementing all three strategies, its focus is on minimizing costs. The company is implementing the strategy of focus by targeting underserved markets while it is implementing the strategy of differentiation by adding value-added services to its repertoire.
However the reasoning behind choosing to adopt these strategies has been to locate opportunities for ensuring customer satisfaction through focusing on areas of the market which have not been targeted by competitors. As a result, Air Asia manages to charge lower prices than many of its competitors while maintaining comparable standards of quality.
Mobile commerce is an extension of e-commerce according to which computer systems can be accessed through the internet on mobile devices such as PDA, smartphone or a cell phone (cited in Hitt, 2007).
Mobil commerce has greater flexibility than e-commerce because it has satellite connectivity. As a result, devices which do not have internet connectivity but which have satellite connectivity can conduct transactions via m-commerce.
In this respect, it must be mentioned that m-commerce can conduct video and audio conferencing. Therefore the application of m-commerce leads to greater scope for business-to-business and business-to consumer exchanges. This has become the crucial business model in the current business environment which is characterized by a high level of competitive rivalry.
This means that businesses must focus on the process of cost minimization. This is facilitated through both e-commerce and m-commerce applications as they facilitate the development of B2B and B2C frameworks. However m-commerce is more convenient because of its greater accessibility.
Air Asia’s application of Windows Vista can be extended to m-commerce because Microsoft has already developed operating systems for mobile phones. Therefore Microsoft will be in a position to create interoperability between e-commerce and m-commerce through the Air Asia gadget. Although m-commerce is wirelessly connected, it has the flexibility of being connected through e-commerce as well.
This means that any solutions developed for e-commerce can be accessible through m-commerce. This will benefit the consumers because they will not have to be connected to the internet once the Windows Vista application is made compatible in the m-commerce platform. In this respect, the costs of conducting e-commerce applications are higher than m-commerce applications.
E-commerce requires connectivity via a personal computer. With m-commerce the same amount of information can be processed through a cell phone.
Evolution of e-commerce and m-commerce
M-commerce is conducted through small hand-held devices. These devices have small screens which might make it difficult for the customers to read the information. At the same time however, these devices are easily carried.
Therefore, through m-commerce, the customers can be in greater contact with the source of information. Another great advantage of m-commerce is that they use wireless application protocols. Therefore they do not have connected through wires. This enhances the portability of m-commerce applications. However the problem is that the technology involved in the wireless application protocol has still room for improvement so that connectivity is still limited.
This enhances the cost of conducting transactions because the more time that the customer waits for the information to arrive, the more costly it is. Therefore money-wise it is still more feasible to use an e-commerce application. However there is no doubt that the issues of user-friendly computing are better addressed through m-commerce.
In the case of e-commerce, there is a considerable level of concern with security. These issues are less relevant in m-commerce because of its wireless connectivity.
However even satellite services which serve as the platform for m-commerce can be vulnerable to online hackers and therefore mobile phone companies are now investing in this area. However there is no doubt that in m-commerce there is less potential for security issues and as a result this is a more attractive proposition for the customers.
The problem is that without additional advancements in e-commerce, m-commerce will not become viable. This is a critical issue to consider because different services such as airlines must focus their resources more on m-commerce than on e-commerce because mobile phones are more widely used than computers.
Therefore any promotional campaigns targeting online business services will gain greater exposure through m-commerce than through e-commerce. The most important contributing factor is that even those consumers who are not comfortable with using computers in conducting online transactions will have used mobile phones for communications purposes.