This has been possible through excellent brand positioning. The content on MBA Skool has been created for educational & academic purpose only. Ease to switching. It was started in 1993, and the operations began in 1996. They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. WebEducational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.) Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler) Rich Dad, Poor Dad (Robert T. Kiyosaki) Air Asia Strategic Analysis The paper is prepared to analyse the strategic management of AirAsia which is (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). The strengths of Air Asia looks at the key aspects of its business which gives it competitive advantage in the market. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. Web- High margins compare to Airline industry's competitors - Even though Airasia is facing downward pressure on profitability, compare to competitors it is still racking in higher profit margins. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. Following is the SWOT analysis of AirAsia: Lastly, lets take a look at AirAsias social media marketing presence as digital marketing is also a very important part of any companys marketing strategy. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of The organisation can be witnessed to confront critical competition from the competitors who are facilitating similar costs and additional services and privileges which act as a drawback for the organisation (Man and Justine, 2005). They may compete in term of their route offering that Airasia does not fly. This results in significant reduction in the cost as the commission fee paid to travel agents are saved and can be used to maintain the facilities and services of the company (Pinto et al., 2015). Step 3- Assess the Porter Five Forces in relation to the Airline industry and assess which forces are strong in Airline and which forces are weak. Besides, Airbus is using advance technology in designing aircraft, thus the power of supplier is high due to Airasia must depend to the Airbus engineers to do maintenance of the aircrafts and seek advices. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. Strong Promoter 2. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. Learn how your comment data is processed. As there are adequate options available for passengers to choose from, at the similar price as Air Asia, the company needs to focus on the amenities and hospitality services it provides to the customers. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. Your email address will not be published. In order to establish a new airlines company, high amount of capital along with risk-bearing capabilities and monetary funds to cope up with the challenges faced while sustaining in the airline industryare required. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. The company makes use of innovative solutions in order to provide low-cost aviation. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. Another reason for the threat of new entrants being low is government laws and regulations which pose restrictions on applying for permissions and license for operating an airline company. There is no product differentiation while the only different is the airlines packages offered. Sponsorship is also one of the great marketing tools. Some writers often extend the acronyms to include legal and environmental factors. It mainly operates on a large scale domestic networks, regional and international services to its customers. The companies are not associated with MBA Skool in any way.Edit the brand or add a new one to SWOT Analysis section : Contribute. Just over 790 million shares were sold, including 592.6 million new shares, at MYR1.25 per share (USD39 cents), making it the largest IPO in Malaysia Today, well discuss the swot analysis of AirAsia. Furthermore, landing charges can be identified as the negative aspect resulting into underdevelopment of the airline industry as the aviation sector is strictly obligated to abide by precise air rights regulations and norms. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. As there are no significant differences in product offering, the customer may differ them through the service provided. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. The case involves the Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. Due to competitive in airline industry and protects on national airline, MAS which facing losses in these year, it is quite difficult to apply for licensing and permit for operating airline company. AirAsia is a low-cost multinational Malaysian airline. The company cannot control a number of charges and costs which are regulated by government and airline authorities which may result in a significant loss in profits and consistency of the organisation. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. It follows vital certain strategies, which include safety first, high aircraft utilisation, streaming operations, lean distribution system and point-to-point network to amplify the working of its low-cost model (Zhang et al., 2017). In order to stay ahead of the competition, the company needs to constantly invest in improving the additional facilities that make a difference to customers in todays times such as disposable in-flight meals, complimentary WiFi, entertainment facilities, and varied seat options. The threats for any business can be factors which can negatively impact its business. It is essential to choose the right set of employees for the organisation in order to maintain their position. The companys primary focus is to build customer value. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. WebAnalysis for Cost Leadership Strategy and Core. It is an international air travel carrier that started its flights in Malaysia and expanded its base globally. Points to consider while selecting a topic for dissertation help. This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. The marketing mixs 7 Ps model is a marketing strategy tool that is used in a business in order to gain the feedback from the market in relation to marketing objectives. WebThe Competitors analysis of AirAsia Flying Low Cost with High Hopes looks at the direct and indirect competitors within the industry that it operates in. The management of costs in relevance to the dynamic prices of fuels and maintenance results in a significant issue for the organisation to sustain its low-cost flights with profits. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. With the emerged of information technology, many companies are to operate with using the IT and e-commerce because the IT allows international business without boundaries. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). Below are the Strengths in the SWOT Analysis of Air Asia : 1. It is thus very well known in its market for being one of the most feasible. This strategy encourages the customers to choose Air Asia over any other airline company. Bargaining power of Buyers The buyer power for Air Asia is analysed to be high as with increasing options in the international market and decreasing prices of air tickets, people of every category of society can afford flying, and hence, the bargaining power of buyers is also high. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. They have official handles on all major platforms but for the purposes of this segment, we shall take a look at the main 3, which are Instagram, Twitter, and Facebook. Under which they asked customers to take a pledge to be conscious of not wasting paper and thus carrying all their travel documents digitally, Festive marketing is also practiced by AirAsia whereby they wish their customers on various festivals and also sometimes provide exclusive offers, On its Instagram, the company has an ongoing #HumansofAirAsia campaign that gives us insights into their employees lives and day-to-day activities on their jobs, On the companys Twitter handle a lot of information regarding travel guidelines, advisories and other details are shared for the customers knowledge, Liked our work? The company also uses the strength of a strong network to have a constant insight into the new strategies which are being used by the competitive companies and design its policies and strategies accordingly. The company provides its services to people of every age group of society, and to the people belonging to the medium and high ranged of income or financial status. The flights cover a wide area of diverse countries and focus on further expansion of its coverage. This article has been researched & authored by the Content & Research Team. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. The brand names and other brand information used in the SWOT Analysis section are properties of their respective companies. AirAsia participates in a lot of price-based promotions. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). Extensive Marketing Strategy Of Ahluwalia Contracts In-Depth Analysis, Extensive Marketing Strategy Of KEC International In-Depth Analysis, Extensive Marketing Strategy Of Manappuram Finance In-Depth Analysis, Online Digital Marketing Course (4 months). The company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in Jetstar Airways 2. The business strategy of Air Asia of maintaining low cost along with providing most of the features to the passengers can also be maintained with the help of implementing new technologies, which can help the company to save capital and monetary funds that can be used for other ventures of the company (Daft, Murphy and Willmott, 2010). Air Asia Competitor analysis In order to compete with AirAsia,. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. Some factors like increased competitor activity, changing government policies, alternate products or services etc. Before we get started, lets get to know the company a little more. Required fields are marked *. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). WebCompare AirAsia against competitors. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). Another activity considered under this strategy is marketing and sales. In this context, Air Asia will be focusing on the use of the strategy of service innovation as it is the best strategy to effectively implement the factor of providing new and enhanced services to passengers at low cost. Following are the opportunities in Air Asia SWOT Analysis: 1. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. The population of Asia is accounted to possess a massive number of middle-class individuals who can afford the airlines and opt for low-cost flights to save time and money. Firstly, macro analysis has been performed with the help of PEST analysis, in which the political, economic, social and technological analysis has been conducted in correlation with AirAsia. Do essay writing needs professional writers? Hence, customer may access to the current airlines information which are available at all time, this has reduced the power of negotiation for airlines and producing a strong customers bargaining power. The organisational image is consistent and successful concerning the competition in the market. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. Many airline companies have entered the airline industry and they have made the market very competitive. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. This comes with a lot of competition. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and
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