International Private Equity Investments

Question: Discuss about the International Private Equity Investments. Answer: Introduction: About emerging market and why Air Asia: per capital income ranges between the lower and the middle class category, countries such as China, Malaysia, Tunisia thus range is between large to small countries. They are entering into globalisation so as to uplift themselves from the category of emerging market therefore trying to deal with the various opportunities and threats tactfully. Noted example is Air Asia- Low Cost Airline which is the best company for analysis due to the kind of development it has done in the recent past even after the economic turbulence continuously faced by the world at large. A company which has shown to the world that bridging the gap between the home and the host countries needs good managerial stances. About the company Chosen: Air Asias past and how it had developed itself. One for the remarkable aircraft utilization rate of thirteen hours per day and having a turnaround time of just 25 mins. Unfortunately the promoters of the company failed to flourish and sson sold it to Tune Air Sdn Bhd and it took a u-turn under the leadership of Tony Fernandes- Former executive of Time Warner. Thus a perfect example of a good leadership as well. One of the most sought after companies in todays world is Air Asia which has left behind companies like Indigo Airlines as well but only due to its managements call of dealing with possible threats and opportunities. Air Asia is a perfect example of also how a company can progress fast in the global world i.e. through mergers and acquisitions. Dealing with oil price fluctuations is not an easy task but the only company which dealt with the same first in the most brilliant manner is Air Asia. Opportunities: Opportunities may be discussed as under: Entering into long term contracts enabled the company to get fuel at competitive rates even if the prices rose. Building up of a strong brand and good culture enabled the company to become a part of the ASEAN Open Skies agreement. Target audience for Air Asia is the middle class and emerging countries as well. Population and industry targeted opportunistic step. Threats: Threats for Air Asia is pointed as under: Government intervention cannot be ignored and neither can the company avoid the basic charges taken by the various airport authorities. Profit margin of 30% for Air Asia has encouraged various other airlines such as Tiger Airways to try to look into something like the same. Security is the biggest problem which all airline companies should think about because of the increasing number of hijacks. Air Asia being low cost, people have a notion that it may have security lapses although no news has yet been heard of any such issue. One company which has fought all of this is Air Asia and it is only due to good leadership. Very few companies are such great examples who not only look at the situations from own angle but also from other persons angle which is remarkable. Good leadership and efficient management enables economies of scale which the officials of Air Asia has very well understood as well as adopted strategies which others also may follow. Interplay between home and host countries: To achieve success it is very important to understand that the interplay between the home and host countries are tackled successfully. For emerging market the most recent example which comes to our mind is the low cost airline Air Asia which had a recent out-burst of development because of the way it handled this interplay. Lessons are learnt from the way they attained quick success. They are: Good leadership is the main crux for achievement of success. Close minded and straight outlook limits the vision to a single dimension. Thus good leader is one who attaches himself with the host country. This enables to fight the threats in a professional yet personal manner which is a very unique method and Air Asia is one company which has proven that this method can lead to success. Globalization is possible for any company if it knows what the culture of the host country demands. Respect of the other persons culture is very rare as every one thinks his or her culture is the best. Therefore this gap has b=to be eradicated within the company by proper training. The best example of bridging the cultural gap is seen in the airline industry wherein the airline companies employ air hostesses and pilots from the countries in which they fly. Communication is the key to success for any concern and especially when it comes to working with other countries. Communication is linked to understanding the culture of an organization as it does not limit to only verbal communication but expands to the body language used, gestures, dress codes etc. All this are also means of communications. Eco-friendly is the new spark for all countries specially due to the kind of industrialisation and globalisation that is taking place and due tot his countries prefer companies who are eco-friendly. Human capital is the biggest asset for any company so as to be able to flourish in the long run. In the wake of globalisation this has become a very important lesson for all companies to learn. Understanding of the labour laws, the employment contract terms and conditions prevalent in a country is of utmost importance to attain economies of scale. Conclusion Air Asia is the most effective example which shows how to deal with threats and take the best out of the available opportunities. Further to this the said company has also learnt all the lesoons of dealing with the home and host country differences and therefore has been able to offer a low cost airline across countries by achieving economies of scale. References: Capa, (2014), AirAsia X SWOT : Challenging times but first mover advantage and fleet flexibility are huge strengths, Available at : https://centreforaviation.com/analysis/airasia-x-swot-challenging-times-but-first-mover-advantage-and-fleet-flexibility-are-huge-strengths-188591 (Accessed 21st August 2016) Deari, H., Kimmel. V., Lopez, P., (2008), Effects of cultural differences in international business and price negotiations, International Marketing Strategy Doole, I Lowe, R., (2008), International Marketing Strategy : Analysis, development and Implementation, 5th Edn, Cengage Learning: London Gullen, M.F., (2001), Is Globalization Civilizing, Destructive or Feeble? A Critique of Five Key Debates in the Social-Science Literature. 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