Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. 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. AirAsia is one of the largest low fare airline companies in Asia, which has been expanding its routes to different countries since 2001. It allows its customers to choose the services they want without compromising on quality. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. Switching Cost is low. The created segments consists of consumers who share similar interests, requirements and locations. Performance of rivalry. There are several companies associated with AirAsia including AirAsia X, Tun Hotel, Tune Monkey, AirAsia Berhad, Thai AirAsia Co. Ltd., AirAsia Japan Co., Ltd., PT Indonesia AirAsia (India) Limited. Our academic experts are ready and waiting to assist with any writing project you may have. The brand colours of Air Asia are red and white, which represent determination along with passion, perfection, and positivity to serve customers high-quality services at low prices (Mele, Pels and Storbacka, 2015). The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. They should be used as a reference paper for further research. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. Moderate Portion of buyers expend on airline. The largest airline in Malaysia the business is known to be highly employee centric. Physical evidence encompasses the ways in which the company can maintain their position in the industry. The company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. WebFive steps to successful analysis of. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. Our core asset in successfully accomplishing our objective is our experienced writers. Technology is a major component of organisational structure which is completely analysed on the basis of IT framework of Airasia in particular region. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. 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. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. The airline brand should exploit these circumstances. Lets take a look at AirAsias marketing mix. Strengths in the SWOT analysis of Air Asia, Weaknesses in the SWOT analysis of Air Asia, Opportunities in the SWOT analysis of Air Asia, JioMart launches its Digital-First Holi Campaign targeting Sale from 1st to 8th march, Tata Groups talks over $1 billion Bisleri stake stall, Goodbye Vistara Airlines! Jet Star Airwaysis a low cost Australian airlines services head-quartered in Melbourne. *You can also browse our support articles here >. gained a smart rating of 54 whereas Malaysia Airlines has gained the rating of 85 which, signifies the contrast of both the airlines in terms of acceptance of the services and feedback by the customers (Holiday.My, 2018). It was started in 1993, and the operations began in 1996. AirAsia is already trying to achieve that by expanding their facilities to hotel bookings, tour packages, etc to try and gain some competitive edge along with diversifying their product portfolio. It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. It seems as the destination and customer market share of AirAsia is only limited to the Asian countries. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. But the company is only operating its business only in 25 countries. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. In the context of this fact, the loyalty of the customers of Air Asia has been decreased because of the increasing competitors of Air Asia in the airlines, such as Jet Star and Tiger Airways. A recipient of numerous awards Air Asia has been consecutively designated as the leading low-cost carrier in the Asian region. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. AirAsias mainproducts and servicesare KL Syariah Index of Bursa Malaysia, low price Santan meal, and duty-free merchandise, drinks, food, and other menus if you buy on board. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. 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 approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. In accordance with the increased demands, the options available for flying has also increased, and hence, the bargaining power for buyers is examined to be high for Air Asia. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). This reduces the chances of small or medium enterprises to enter this industry, and hence, the threat of new entrants for Air Asia is very low. They have been a major player in the low-fare airline industry and have connected over 88 countries together. AirAsia focuses on delivering accessible promotions, in which customers are aware of new product offers with minimal company intervention through simple tools such as emails. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. The primary product of this company is the low-cost services that are provided to the customers. The company engages in anchor pricing strategy in its marketing mix. The opportunities for any brand can include areas of improvement to increase its business. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. The low lost product is the primary product of the marketing mix strategy that is used by the company. Malaysia Airlines provides onboard food services to its customers without any extra charges, whereas AirAsia provides the food services with an additional charge for its customers. As increasing in the number of airline competitor such as Jet Star and Tiger Airways which are also promote low cost fare may decrease the shifting cost of the customer lead to decrease of Air Asias customer loyalty. Currently, the priority for the company is to maintain the fundamental principle of keeping travel fair as low as possible so that people with weak financial status can also afford to travel in flights. 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. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). Along with these improvements, if AirAsia continues to deliver to its target market effectively, it will surely maintain its differentiated position in the industry. 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 company confronts various complaints and issues from the customers who are numerous to resolve instantly and result in customer dissatisfaction. The increase in oil prices has critically impacted the operations of the organisation. Air Asia Revenue : RM 10,638 million (FY 2018) (9.6% increase YoY) RM 9,710 million (FY 2017) Competitive Analysis of Air Asia SWOT PESTLE The SWOT analysis of Air Asia is presented below: Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Although the two major suppliers of aeroplane structures are Airbus and Boeing, the suppliers of other facilities required in an aeroplane, for hospitality services including food and merchandise, are available in adequate amount in the market. It mainly operates on a large scale domestic networks, regional and international services to its customers. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. Human resource management undergoes significant political pressure as the recruitment process of AirAsia is focussed on the racial determination of the applicants rather than their merits. The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. The major reason is that the number and type of competitors remain the same for a long time,and this reduces the chance of an airline company at a lower level coming higher in the market.Different airline brands are known for various services, for instance, JetBlue is known for the quality of services and amenities and Air Asia is known for its low cost. Marketing mix 7 Ps and SWOT analysis can improve the brand value of AirAsia and identify the strengths and weaknesses of AirAsia along with determining the future opportunities. Fixed Cost is high. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. There are several brands in the market which are competing for the same set of customers. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. In the increasing demand of the airline services, there is a tough competition in the airline industry because of the varied numbers of the competitors that are providing the airline services. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. All work is written to order. Another important strategy that Air Asia will consider enhancing is improving Information Technology (IT) services in the company, as well as in the aeroplanes. Fixed cost incurred by an airline company may include the finance cost, hire purchase and staff cost while this fixed cost may be reduce through increase in market share. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest As AirAsia expanded its services, the company expanded its facilities, including travel Ease to switching. In order to build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. Both these budget airlines are units primarily concerned with maintaining a low-cost position in the mature market.. History of Garuda Airlines. The airline claims No Admin Fee, but all the services provided by AirAsia are not free, it has some fees for some services. Your email address will not be published. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Continue reading more about the brand/company. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. Tony Fernandes was recognised as for his outstanding work in AirAsia, and he was awarded by the International Herald Tribute Award and he also became the Malaysian CEO of the year in 2003 (Roy, 2014). Before we get started, lets get to know the company a little more. 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). The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. The content on MBA Skool has been created for educational & academic purpose only. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. 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 price offer by an airline company may not be fixed but it will depend on the time differences between the date of booking and flight. 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 It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). Interested in learning more? We hope you found what you were looking for. The company makes use of innovative solutions in order to provide low-cost aviation. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. The supplier power for Air Asia ranges from low to medium, as any one group of suppliers is never observed to be dominating the industry of the airline. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. They hence practice geographic segmentation by focusing their services primarily in Asia, Demographic segmentation- Being a low-cost airline, they cater to people in the low to medium income group, Psychographic segmentation- Their main customer is the cost-conscious traveler, AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines, JetStar is providing more payment options or gateways to its customers, AirAsia provides services to 130 destinations as compared to JetStar which provides services only to 80 destinations, Malaysia Airlines generates 113% of AirAsias revenue, Malaysia Airlines also has fewer employees, at 7,159 compared to AirAsias 20,000, AirAsia is the low-cost airline leader in the Asian market, The company has subsidiaries in Indonesia, Thailand, the Philippines, and Japan, It boasts a fleet of nearly 300 aircrafts, AirAsias positioning is steady and consistent in being a low-cost airline. Air Asia is known for treating its employees and customers well. Today, well discuss the swot analysis of AirAsia. The increasing cost has made it impossible for the company to offer low prices and remain profitable. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. Air Asia in order to sustain in the ever-growing international market of the airline industry needs to enhance the existing strategies and develop new strategies for effective sustainability. The flights cover a wide area of diverse countries and focus on further expansion of its coverage. Start-up Cost is high. Following are the opportunities in Air Asia SWOT Analysis: 1. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. The organisational image is consistent and successful concerning the competition in the market. There is no product differentiation while the only different is the airlines packages offered. Interested in learning more? This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. As there are no significant differences in the price compare to Air Asias competitor such as Tiger Airway and Jet Star as mentioned earlier, their customer do not need to spend more to shift to another airline. Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. The distribution channels for the tickets include different sources such as internet ticket booking, exclusive reservation, and sales offices along with the agents that are authorised by the company. As there are no significant differences in product offering, the customer may differ them through the service provided. Pacific (Cebu Air Inc, 2012), AirAsia (AirAsia, 2011), and JetStar Airways (Jetstar Airways, 2012) all reporting increase in revenues and recording profits over the previous year. With the increasing number of services by different competitors, AirAsia has also expanded its facilities including the tour packages and hotel booking services that help the company to sustain in the market. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). SWOT analysis of Air Asia analyses the brand by its strengths, weaknesses, opportunities & threats. WebAnalysis for Cost Leadership Strategy and Core. But in 1993, Air Asia was established to finally connect Asia like no other airline company. Below are the Strengths in the SWOT Analysis of Air Asia : 1. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). The microenvironmental analysis for any company or organisation is performed using Porters Five force model. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. As the rivalry is strong, Airasia may constant in price reduction to compete with them. The companies are not associated with MBA Skool in any way.Edit the brand or add a new one to SWOT Analysis section : Contribute. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. Do you have a 2:1 degree or higher? That was AirAsias 4Ps mix, detailing each strategy and its purpose. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. The verdict overturned the Malaysian Competition Commission (MyCC) ruling that AirAsia and Malaysia Airlines (MAS) had colluded to share the market. As compared to industry leaders, they dont operate on as many routes, Merging with other low-cost airline companies, They can introduce more flights for popular and busy destinations, The increasing traffic from India as Indians prefer budget airlines. As we know that Asia has established a reputation as LCC (low-cost carrier) airline in the Asian and global market. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. This has been possible through excellent brand positioning. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and Jet Star Airwaysare considered as the safest low cost carriers among the 10 safest carriers in the airline industry of Australia. Swot Analysis of AirAsia Berhad. 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. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. Similar service provided among every airline company so the competitive may be fierce. Strong Promoter 2. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). Air Asia Competitor analysis In order to compete with AirAsia,. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. As there are approximately 59 low cost airline operating in the industry,it is always easily for the customer to look for alternative. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. 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. Air Asia comprises of a capable and dedicated customer care team, which is committed to resolving the complaints by the customer as soon as possible. The company is constantly using innovative solutions to provide low-cost transportation. Some more of these improvement areas can be found through its SWOT analysis. Required fields are marked *. Low Cost Model: Low cost operations and fixed costs . The company AirAsia, demographic segmentation is preferred. The dynamic oil prices and service costs result into criticality for maintaining the low-cost flights as the organisation focuses on facilitating the most affordable costs to its customers (Daft, Murphy and Willmott, 2010). Due to few suppliers in market, this has increasing the bargaining power of supplier. AirAsia has been a successful part of the airline industry for over a decade. Lets get into discussing their marketing efforts, starting with their marketing mix. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. AirAsia Airline As the best low-cost passenger. 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. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Discover AirAsia alternatives or similar companies to benchmark and competitors' market analysis. Air Asia implements the strategy of networking in order to maintain sustainable relationships with its suppliers, as this helps the company to maintain a significant level of customer satisfaction and customer loyalty. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. AirAsia is one of Asias most successful low-cost carriers. This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. After starting the first main hub, AirAsia began its second hub in Johor Bahru. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). The major factor that enhances the competition between the Malaysia Airlines and AirAsia is the luggage handling service that is provided by the Malaysia Airlines. Specific analysis has been conducted in order to analyse the market environment for AirAsia. 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. This article has been researched & authored by the Content & Research Team. Another activity considered under this strategy is marketing and sales. As per the past experiences and the feedback of the customers, Malaysia Airlines are found to react their destinations on time in comparison to AirAsia. Brands, such as Jet Star Airways and Tiger Airways, are sustaining in the competition as they also provide air transportation at cheap costs to people along with enhanced in-flight services and varied options for passengers.This directly affects the customer strength of Air Asia, andthese companiespose a threat to the company. This is due to Airbus is a UK based aviation company and their customer may come from around the world. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. Build a competitive intelligence sales and marketing strategy based on the data Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. He has been a guest speaker at prominent colleges in India including IIMs[Read full bio], Your email address will not be published. The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. Air Asia is one of the leading brands in the airlines sector. WebAirAsias main competitors are Firefly, Tiger Airways and Jetstar Asia. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. The branding of the logo of Air Asia is essential for them. Here are the weaknesses in the Air Asia SWOT Analysis: 1.Not on too many routes as compared to market leaders 2.Stiff competition in its sector. But of course, there exist many competitors that require constant evaluation of strategies. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of Similarity in product offering. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). AirAsia should expand into more countries, increase the market, and target new customers. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. It constantly delivers on this promise of affordability, It is extremely difficult to keep costs as low as possible due to fluctuations in fuel prices and increases in service costs, AirAsia does not have its own MRO facility, Cut-throat competition in its sector. Strengths. Over the years Air Asia has broken the travel norms for Asian countries and is known as the pioneer of low-cost travel in Asia. AirAsia is a low-cost multinational Malaysian airline. 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