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   Your notes Potential Implication and importance
Impact:

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1. Êrading policies xaintains active and diverse international High Australia has good trading policies with its neighbor countries, and their trades are in
trade policy agenda which combines favorable conditions, so operating Air Asia (AA) in Australia would be viable and
multilateral, regional and bilateral strategies there will be higher frequent business traveler.
 to break down world barriers to trade. Êrade
policies are equally based on structural
economic reforms to improve its
international trade competitiveness, and
initiatives to promote liberalization of
international trade and investment rules.

 Home market lobbying/pressure groups 
Œommitted Pressure group are allowed in
Australia, which is good things, because of
open political system, as results consumer
and the citizen are more aware about the
real business situation.
xedium Pressure groups will make the organization to think about the Œorporate Social
Responsibly and Ethics that it need to consider and practice in Australia. AirAsia
should come up with new business strategies which benefits environment, people
and demoralizing un ethical activities.

3. International pressure groups Australia is a sophisticated and modern xedium In the environment, where there is high international pressure group, organizations
economy. It is open market and it has good should consider international issues and change their operation so that their daily
relationship with international welfare operation, culture, functions and resources doesn¶t violate the international laws.
organization High Pressure group

4. Wars and conflict No wars and Œonflicts within the country, High Australia isn¶t involved in any form of war within and outside the country, so the
but active as Peace Keeping force in various political environment seems to be sound. Hence Australia shall have higher tourist
Œountries. and business traveler. AA shall enjoy higher revenues as result of higher number of
frequent travelers.

5. Government policies Êhe Govt of Australia has open door policy, High Open door policy of AUS government shall always motivate AA to invest, penetrate
which always motivates various and serve the future prospect of the Australian xarket.
international business to invest their
resource for the benefits of Australian
consumer
6. Government term, change and elections Êhe Parliament of the Œommonwealth of
Australia holds voting election for House of
Representative every 3 year and 140 days
after the first meet, using Australian electron
System
xedium For a AA it, has medium impact, because the government isn¶t changing either fast
or lasting long. Êhe political environment is stable. Êhe business has to three years
of time to change in its policies when new government comes in power. Political
stability is assured.

7. Inter-country relationships/attitudes Australia has good inter country relationship High When there is good inter country relationship, the countries get involved in both
with other countries. It has established inflow and outflow of FDI, as result AA shall have higher number of different
council with various countries like Œhina, frequent traveler between the countries.
Japan, India, Korea and other countries

8. Governmental leadership
Œonservative in terms of Foreign Investment Low Restriction on the Œapital ownership shall turn investor off, and their working
for Australian resource Industries. Overseas procedures, until and unless, the government welcomes investor which reform tax
investors are limited to own stakes of 15% policies.
in major Australian resources companies;
whereas capital ownership is limited to less
than 50% for investment in new projects.


  

  
 

1. Home economy situation Australia is facing recession, but still has the
economic growth rate of 0.5, with typical
inflation of 2-3%, with unemployment n rate
 of 5.7%.
Low Situation of home economy always has higher affect on the AA, since
unemployment growth is 5.7%, and the economic growth is less than 1 % so AA
doesn¶t seem to have frequent flyers from Australia as economic activities are
decorating and as overall affect can be seen on the people lifestyle. Australia doesn¶t
seem to be favorable.

2. General taxation issues Êhere are various tax implied on Australia High Êhe corporate tax rate is very competitive in Australia compared to major economies.
among them are Similar to New Zealand and Êhailand. Êhe tax rate of Australia seems to be feasible to
V Sales tax- 10% AA and they can operate in sound work environment.
V Œorporate Êax rate ± 30% Œompetitive
V Progressive Income Êax
V Pay-As-You- Earn Êax( type of
Income Êax)
3. Seasonality/weather issues Weather variation from north to south xedium Seasons highly affects the business operation for an airline industry. Êhe Australian
throughout the year. Extreme hot, humid weather and climate seems to be favorable for AA. But there might be fewer weather
and rainy at North during Nov/Dec. Pleasant problems at the southern part of country.
weather is during April to September.

4. xarket and trade cycles Êrade Œycle of Australia is more similar to High xarket and Êrade cycle is similar like global trend so operating cycle is also affected
the global cycle for trend. on the basis of global trend. is Generally market trend affects the airlines business, as
the transportation is highly required when market and trade cycle are performing good.

5. International trade
Australia trade is more focused towards
Asia and other pacific countries. It has Free
trade Agreement with ASEAN, Œhile, New
Zealand, Singapore, Êhailand and US.
Œhina is largest export market
High Presence of international trade shall increase the number of frequent travelers from
each trading companies. Air Asia (AA) can have frequent travelers from AEAN,
Œhile, Œhina, US and Êhailand.

6. xonetary issues Official Interest of Australia has been High Êhe interest rate in Australia is lower than 3%, so as for better operation, AA can get
declined to less than 3% in 2009, so that finance in a lower cost, to fund their daily operations.
growth and investment can be increased, by
lowering the cost of borrowing money

7. Disposable income As per 2007-2008 Disposable income Low Disposable income defines customer behavior and their spending habit, when
Upper level: $ 811 per week consumer spends more, the market then to grow and business profits tends to increase.
xiddle level: $ 699 per week AA should focus more on mass who has lower disposable income, as higher income
Lower Level: $ 44 per week. earner tend to use full service flights rather than low cost flights.

8. Job growth/unemployment
Œurrent unemployment is 5.7%, where as
every year 52700 were created as average.
Low Since unemployment rate is 5.7%, which is lower, so AA might have problem to get
skilled employees, they might require using different human resource recruitment tool
to higher experience, skilled and trained employees. Êhe compensation payout is also
likely to be high because the supply of labor is low where as demand is higher. Êhis
isn¶t favorable for AA.

9. Exchange rates
A reserve of foreign exchange and gold is $
44.98 billion, Australian dollars (AUD) per
US dollar - 1.2894 (2009), 1.2059 (2008),
1.2137 (2007), 1.3285 (2006), 1.3095
(2005)
xedium Stability of Œurrency has impact on the long-term business in the economy. AA can be
having confidence regarding the exchange rate of Australian Dollar. Êhis is favorable
for AA.
10. Import/export ratios Êhe ratio between import and export ratio of High Higher export shall have higher number of business traveler and transportation of
Australia is 1:1.01. Export is higher than commodities can be seen. Êhis concludes higher number of business travelers and
import by $ 5 billion AUS dollars commodities delivery.


   

  
 
1. xedia views  xass xedia has higher influence among the High xass media has greater impact on people life, so AA can take advantage to position
people of Australia itself among the prospect future consumer through higher advertisement and
promotional activities on mass media, there is high media reach in Australia.

2. Religious groups
Œatholic 25.8%, Anglican 18.7%, Uniting Low Religious diversity can have light affect the people buying or spending habit. In order
Œhurch 5.7%, Presbyterian and Reformed to meet the customer need, AA can have few changes as required.
3%, Eastern Orthodox 2.7%, other Œhristian
7.9%, Buddhist 2.1%, xuslim 1.7%, other
2.4%, unspecified 11.3%, none 18.7%.

3. Demographics
As per 2009
Population: 2.1 million
Age: 0-14 years: 18.6%, 15-64 years:
67.9%,65 years and over: 13.5%
Race: white 92%, Asian 7%, aboriginal,
other 1%
Family Size: Nuclear Family Structure with
2.5 people per household.
High xarket structure is good for AA, we can analyze the given information and state that
67.9% of people are within age group of the prime customer, consumer from the
market can be easily targeted as the market has larger homogenous race of people.
Family size is nuclear, we can be assured that people of Australia would be having
high expense and they wouldn¶t save much of their income. So Australia is a favorable
market.

4. Education Description: age 15 and over can read and High Since the customer is highly educated, AA should provide detail information¶s
write. 4.5% of GDP is contributed to regarding their products and service, and it also has higher advantage in terms of
Education. total population: 99% operation as it can have skilled and well educated employees. New management
male: 99% , female: 99% concept and technology of taking operations can be implemented and practiced for
better efficiency.

5. Immigration/emigration Every year 0.2 million people immigrate to High Every year number of consumer is increasing because of increasing number of
Australia. immigrants, so AA can capitalize on capturing new markets and new customers. Êhis
is positive traits for AA since it operate on maximization of sales.

6. Health As per 2008, Australia spends approx 10% High Life expectancy of Australian is higher, where business had diverse customer in terms
of its GDP for health care of its citizen. of age group. Employees tend to be less absence, as employees in Australia are less
Australia has health care system called prone to disease. As conclusion we can say that employee¶s productivity can be high.
xedicare, which gets funded by the 1.5% if
the income tax. Life expectancy of Australia
is 81.63 years; male: 79.25 years; female:
84.14 years.
7. Living standards As per 2008, Australia has Purchasing High Australia has higher purchasing power parity, which is good for business to determine
Power Parity $39,000. customer purchasing power. But AA is low budgeted airline; most of the consumer
would like to use traditional Full Service Flight to enjoy better service.

8. Attitudes to work Australians are flexible to work. People High Attitudes to work of Human resources, defines how organization operation is affected
have proper balance between their work life and how to work with people. xanagers in AA should work with in employee in
and their personal life. parallel terms being more focused on team work.

9. Staff attitudes Lower power distance and higher authority High AA should practice decentralization the authority, to achieve its objectives and
shall fail. Power distance is 36 compared to optimize the use of available resources from sound management as per its employees.
world average has 55.

10. xanagement style Democratic and consultative style of High AA should adjust to Democratic and consultative style management, within Australia.
management is highly preferred. Doing so shall increase the productivity of the overall organizational employee in
Australia as highly concern with work and management style that is practiced.

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1. Research funding Êotal expense for Innovation, Industry, High AA can take benefits from the research programs of Australia for better technologies
Science and Research was Aus $312 for and use of new management and operation in its organization to be more competitive
year 2009. and productive in international market.

2. Intellectual property issues Êhe current value of intellectual property in High When AA, develop new concepts technology for its better operation in its
Australia is over $30 billion. Australia organization, the company can be sure that its ideas shall be protected, and company
defends those properties that are notably gets more effective and efficient.
within WÊO.

3. Energy uses/sources/fuels Australia Œonsumer energy worth $ 50 High AA highly depends on the availability of energy either that be oil or electricity. AA
billion, every year. Electricity usage: 222 b should prepare for itself for advance technology that reduces less energy or some
kWh, oil usage: 953,700 bbl/day, Natural alternative to current energy requirements. Australia has good access to energy, so AA
Gas : 34.2 b cu m won¶t have any problem regarding the availability of energy.

4. Œommunications Australian domestic networks consist of High AA is budgeted airline, since most of it sales is made by internet and mobile SxS,
fiber-optic, wireless, and satellite. Australia has good information communication infrastructure which is good. AA cost
Êelephone user, landline: 9.37 m, Œellular: cutting strategy to reduce the agent cost can be implied as 22.12m are cell phone user
22.12 m, Radio, Ax: 262, Fx: 345, Ê and half of the population has access to internet.
Station: 104, Internet User: 15.7 m user.
 5. Êransportation Australia has Road : 913,000 km, Railway: High AA can take benefits from proper transportation infrastructure of Australia to better
33,819 km, Pipeline system:27000 km, perform and serve its passenger in maximum way.
Airports: 464 Sea port: 14 major sea port

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 Ecological  Australia is a large island continent and is xedium Australia can be good market place for AA from the point of Êourism industry,
one of the most biologically diverse because of Australia unique bio diversity, its ecosystem, its national parks and other
countries in the world, with a large portion ecological aspect. For AA, it is good opportunity to take to provide service and
of its plants and animals and ecosystems increase their sales by serving foreign visitors or tourists.
found nowhere else. About five percent of
Australia is national parks that provide
excellent places from which to experience
such diverse habitats as rainforests, deserts,
coral reefs and woodlands, and the plants
and animals that inhabit them.

2. Environmental issues International: Global Warming xedium While operating in Australia, AA has to consider not having negative impact on
i. International environmental issues of Australia and support Australia¶s campaign regarding
National: xarine conservation, Native environmental issues.
ii. National fauna, Ocean dumping, oil spills, whaling.
iii. Local 
Local : xining and Waste xanagement

3. Environmental Œurrent environmental issues touches issues xedium AA, should have system, what uses recycled things, such as paper, plastic and other
regarding natural resources are affected by resources that doesn¶t have negative impact and shall promote the environmental
human use directly and indirectly. issues, that benefits Australia in long-term.