Study for free with our range of university lectures! Along with these improvements, if AirAsia continues to deliver to its target market effectively, it will surely maintain its differentiated position in the industry. However, there is also a barrier to the establishment of the new entrant in the airlines, which is the high start-up cost that is required for the airline services. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. AirAsia is one of Asias most successful low-cost carriers. 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). It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. Competitiveness Points of Air Asia. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. The company engages in anchor pricing strategy in its marketing mix. AirAsia also acquired recognition for improving its supportive and constructive management, as it received rewarded by Center Asia Pacific Aviation (CAPA) as the best airline of the year. Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest Air Asia is known for treating its employees and customers well. WebFive steps to successful analysis of. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. Looking for a flexible role? I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. 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. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. 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. Air India, Emirates, and many other Asian airlines have also started following the low-cost carrier strategy to attract market share. Exit Cost is high. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. Use Slintel to connect with top decision-makers at AirAsia. The company is constantly using innovative solutions to provide low-cost transportation. It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. 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. This strategy encourages the customers to choose Air Asia over any other airline company. Air India to discontinue Vistara after merger, DS Group Partners with Lderach (Swiss Chocolate Maker), Castrols unveils a New Logo and a Refreshed Brand Identity. WebAirAsia Bhd Fundamental Company Report Including Financial, SWOT, Competitors and Industry Analysis Enhanced SWOT Analysis (+ US$ 75.00) PESTEL Analysis (+ US$ 150.00) IFE, EFE, IE Matrices (+ US$ 125.00) Porter Five Forces Analysis (+ US$ 75.00) VRIO Analysis (+ US$ 175.00) Special Bundle, including all types of analyses (+ US$ 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. This is act as a barrier of entry for the competitor as there are high in capital requirement such as set up of headquarters, purchasing or hiring aircraft, appointment pilots and other staffs like air supervisor. AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines 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 company makes use of innovative solutions in order to provide low-cost aviation. In the similar context, Air Arabia provides the facility of carrying extra baggage for passengers, and this makes Air Arabia a preferred choice over Air Asia. However, AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to the competitors in the airline industries. They may force to continue their operation even they are facing losses in order to cope with fixed costs. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. 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. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). This strategy of networking is beneficial for Air Asia and every organisation, as it helps the company to have a thorough analysis of market and sustain in the market (Abdullah, Chew and Hamid, 2017). Air Asia PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. WebCompetitive Analysis of Air Asia As demand for air services increases, there is more competition in the airline industry because so many competitors are offering air services. The price will be cheaper if you book earlier. Rising Fuel Costs 2. Learn how your comment data is processed. Lets understand AirAsias competitors better with analysis. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. 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). However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. 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). 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. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. Well established LCC operating out of South East Asia, 3. Required fields are marked *. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. Diversified in product offered. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. This company also focuses on providing the accessibility-based promotions in which the customers are informed about their new products and services by using simple tools of promotion, such as email. The cost may include staff retrenchment fee, paying off the loan or debts and refunds due to flight cancellation so it may expensive for an airline company to leaving the industry. Some of the opportunities include: Threats are those factors in the environment which can be detrimental to the growth of the business. As the rivalry is strong, Airasia may constant in price reduction to compete with them. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. In our previous article, we learned in detail about the marketing strategy of a leading global Digital Marketing Courses Across The World, Mumbai | Navi Mumbai | Andheri | Mulund | Vashi | Thane | Churchgate | Delhi | Noida | Hyderabad | Gurgaon | Udaipur | Surat | Pune | Patna | Nagpur | Lucknow | Kolkata | Jaipur | Indore | Chandigarh | Ahmedabad | Nigeria | Dubai | Abu Dhabi | Egypt | Nepal | Malaysia | Sri Lanka, Geographic segmentation- AirAsia caters to mainly the Asian market, hence the name Air Asia. Furthermore. We hope you found what you were looking for. 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). 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! in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. Let us start the Air Asia SWOT Analysis: For Air Asia, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. Strengths. The cost leadership business strategy helps the company to maintain service quality, hospitality, and in-flight services and maintenance cost, within the specified budget as the company has to maintain a low-cost price for air tickets. There are many services that are provided to the employees of the organisation, such as training and motivational lectures. Focusing on providing air travel without frills at substantially lower prices, AirAsia has managed to achieve lower prices to attain high passenger loads, market share, and profitability by eliminating provision of *You can also browse our support articles here >. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. Knowing the increase of competition in the market, AirAsia applied the adaptation process (Hanan & Freeman, 1984) by expanding its operation to long haul services to various destinations. 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. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. Your email address will not be published. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. High numbers of Competitor. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. Specific analysis has been conducted in order to analyse the market environment for AirAsia. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. Air Asia has expanded their product line by not only sales ticket but also offering tourism package which is offering hotel booking while booking the ticket. AirAsia uses various media platforms for the marketing and promotion of its products and services. The microenvironmental analysis for any company or organisation is performed using Porters Five force model. Porters five force analysis for Air Asia is as under: Bargaining power of Supplier Analysis of the bargaining power of suppliers is crucial for any organisation, as with the help of this, an organisation manages the capital and makes decisions regarding financial management (Thomas and Housden, 2017). Thank you for reading this case study. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. Other than that, hes a fun loving person. 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 offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). Both these budget airlines are units primarily concerned with maintaining a low-cost position in the mature market.. History of Garuda Airlines. It has been reviewed & published by the MBA Skool Team. There are several brands in the market which are competing for the same set of customers. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). As per the results of the survey, AirAsia has. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. That was AirAsias 4Ps mix, detailing each strategy and its purpose. However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. AirAsia was named as the best low-cost airline company in the world for 9 consecutive years at the Skytrax World Airline Awards. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of Continue reading more about the brand/company. The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. Points to consider while selecting a topic for dissertation help. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). Low Cost Model: Low cost operations and fixed costs . This article has been researched & authored by the Content & Research Team. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. It was started in 1993, and the operations began in 1996. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and AirAsia has been facing the competition with the varied existing low fare airlines that include Jet Star Airways, Tiger Airways, JAL Express and Air Arabia. Before we get started, lets get to know the company a little more. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. The threats for any business can be factors which can negatively impact its business. High Switching Cost. It is the largest airline company based on the concept of the Low-Cost Carrier (LCC) (Zhang et al., 2017). Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. Government regulations which target various aspects such as particular routes, landing permissions and share possession cause a drastic impact on the operations of the organisation. Very interesting and informative. Air Asia is known as one of the most low-cost airlines in the airline industry. Moderate Portion of buyers expend on airline. This model is widely implemented by various organisations for the development of their strategies in the industry. Lets get into discussing their marketing efforts, starting with their marketing mix. To a report by the Malaysian competition Appeal Tribunal since its inception more than four years ago caught media... 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airasia competitors analysis