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Due to the intensity of competition in the airline industry, this report selected this industry to study the business strategy and competition environment. This report studied the external environment to get the concepts of strategy management by using the tools of porter’s 5 force model. Additionally, this report selected Air Asia and Singapore airlines as samples to do further study as these two companies are located in close location but using different strategies. This report analyses the resources and capability of both companies to compare and analyse the strategy they are using, i.e. Air Asia is a low cost airline while Singapore airline is with top service in the world.
This report firstly introduced the airline industry background and both company’s overview. Secondly this report analyses the external environment and firm level. Finally, the report analysed the strategic choice of both selected companies to get the conclusion that the linkage between resources, capability and strategy.
Air Asia is an airline company which provides air transportation service. Air Asia was established in 1993 and started its operations since 1996. The company’s headquarter is in Malaysia. It is the leading low fare airline in the Asia and Air Asia is the pioneer of low cost flying in Asia (Thomas, G., 2009).  Air Asia has over 61 route for domestic and over 108 routes for international terminals, and running over 400 flights everyday. Air Asia is the largest low fare and no frill airline.
Singapore Airlines is one of the top airlines in the world because of its high standard of service. It has a history of more than 60 years since1947. And now has over 150 latest advanced planes flying towards to over 90 destinations within five continents. It won lots of prizes from international organizations which mean the acceptation of its quality of services. As one of the leading airlines in the world, people thinks Singapore Airlines is a very safe and comfortable airlines (Wirtz, J., & Johnston, R., 2003).

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