The company constantly invests in improving the facilities it provides to the passengers and has introduced facilities, such as in-flight meals, complimentary WiFi, entertainment facilities such as separate televisions for passengers, and seat options including flatbeds (Abdullah, Chew and Hamid, 2017). 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 Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. Required fields are marked *. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. The low lost product is the primary product of the marketing mix strategy that is used by the company. They may compete in term of their route offering that Airasia does not fly. The competitions advantage is the centre of a companys performance to face a direct competition. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. It allows its customers to choose the services they want without compromising on quality. Home Samples Marketing Environment Analysis of Air Asia. The company believes that customers are the key to their expansion along with their growth. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. IT infrastructure of the organisation is utilised with a remarkable approach which enhances the operations and management of the organisation. 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. 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). In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. The companies are not associated with MBA Skool in any way.Edit the brand or add a new one to SWOT Analysis section : Contribute. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. The organisational image is consistent and successful concerning the competition in the market. 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. Air Asia is one of the leading brands in the airlines sector. Has Positioned itself as the major LCC in SE Asia. SWOT analysis of Air Asia analyses the brand by its strengths, weaknesses, opportunities & threats. 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. WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). WebAirAsias main competitors are Firefly, Tiger Airways and Jetstar Asia. This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. 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. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. It must have a good relation with hotels and tourism companies around Asia. 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. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. This comes with a lot of competition. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. 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. SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Find useful insights on AirAsias company details, tech stack, news alerts, competitors and more. The case involves the AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. Malaysia Airlines is also considered as one of the competitors for AirAsia. 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 AirAsia Big Loyalty Program is one of the companys most popular campaigns, in which affluent customers win BIG points for any purchase they make and redeem those points for free airline tickets. Air Asia Competitor analysis In order to compete with AirAsia,. 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. Besides @flyairasia and Start-up Cost is high. Exit Cost is high. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. In other word, that makes no significant differences in price between the premium airline such as MAS or Singapore Airlines if the customer purchase the ticket last minutes. 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. The verdict overturned the Malaysian Competition Commission (MyCC) ruling that AirAsia and Malaysia Airlines (MAS) had colluded to share the market. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. Some of the key weaknesses of Air Asia are: Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. Technology is a major component of organisational structure which is completely analysed on the basis of IT framework of Airasia in particular region. Orient Thai previously competed as a third LCC domestically but has essentially withdrawn from this market, initially shutting its LCC brand One-Two-Go in 2008. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. If you did, be sure to share, comment, and let us know! As reported in The Edge Markets in 2019, Khazanahs managing director Datuk Shahril Redza Ridzuan claimed that the airlines CASK was only 15 per cent to 20 per cent higher than AirAsia and was in fact lower than regional airlines such as Singapore Airlines, Thai Airways and Cathay Pacific. Furthermore. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. The company confronts various complaints and issues from the customers who are numerous to resolve instantly and result in customer dissatisfaction. Another strategy that the company will implement in the future is networking. AirAsia is a global airline with operations in more than 160 destinations in 25 countries. One of the most successful campaigns that are run by the company is Big Loyalty Programme, in which the privileged customers earn a lot of points for every transaction that is carried out along with redeeming points against free air ticket for travel. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. Your email address will not be published. WebAnalysis for Cost Leadership Strategy and Core. 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. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. In this strategy, the company uses activities such as inbound logistics, where all the aircrafts are of one type; hence, reducing the maintenance cost, scheduling cost, and cost of managing inventory. The branding of the logo of Air Asia is essential for them. Back in the 1900s Thai National Airlines was the only airline that could fly in the main routes of Bangkok Chiang Mai with non-stop flights. 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. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). This increases the probability of people to avail of airline services frequently. Well established LCC operating out of South East Asia, 3. This involves a detailed analysis of their actions and how these would affect the future strategies of AirAsia Flying Low Cost with High Hopes. AirAsia X was regarded as having the worlds best low-cost airline premium seat and the worlds best low-cost airline premium cabin for five consecutive years (AirAsia X, 2018). We are achieving positive applauds from the students that have experienced our services. can be threats. The Essay Writing ExpertsUK Essay Experts. Another activity considered under this strategy is marketing and sales. Government regulations are strict. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). Below are the Strengths in the SWOT Analysis of Air Asia : 1. 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. WebFive steps to successful analysis of. Use Slintel to connect with top decision-makers at AirAsia. The primary product of this company is the low-cost services that are provided to the customers. Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. They may compete in term of their route offering that Airasia does not fly. WebThe two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). The airline offers400destinations both local and international in25countries across the world. Some more of these improvement areas can be found through its SWOT analysis. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. 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. 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. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. Some writers often extend the acronyms to include legal and environmental factors. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. We hope you found what you were looking for. The threats for any business can be factors which can negatively impact its business. Below are the top 3 competitors of Air Asia: 1. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. 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. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. Disclaimer: The reference paper provided by Student Life Saviour should be used as a model paper, and are not intended to be submitted to the universities. The importance of pricing strategy is to know the strategies that are used in the market and to analyse the rivals that are present for Air Asia n the airline industry (Shaw, 2016). AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. 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. 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. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). Lets understand AirAsias competitors better with analysis. WebCompare AirAsia against competitors. In 2002, AirAsia became the first airline company in the region that allowed passengers with the facility to pay for their bookings by using credit card. All work is written to order. For example, they had a #responsibletraveller campaign on Instagram. Relative insignificant influence of buyer to supplier. And thus Indians meet their target requirements perfectly, Government charges and costs that are not in the control of the company may lead to severe losses in the future, With dynamic management and other operational costs, it becomes difficult to manage low-cost flights, AirAsia has 62.K followers on Instagram, 93.5K followers on Twitter, and 12M likes on Facebook, They post regularly on their pages, at least a couple of times a week, and maintain this consistency, They post a variety of content that aims at staying relevant in the minds of the customers, Their main strategy seems to be posting about exotic travel destinations with Call-to-Action, encouraging customers to avail their services in exploring these locations, The company also posts environmentally friendly content to echo the ethos of its brand. Continue reading more about the brand/company. As there are approximately 59 low cost airline operating in the industry,it is always easily for the customer to look for alternative. Ease to switching. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. 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. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. Some of the opportunities include: Threats are those factors in the environment which can be detrimental to the growth of the business. It mainly constitutes of two major subsidiary airlines that includes MASwings and Firefly. 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). Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. 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. 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. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. Due to few suppliers in market, this has increasing the bargaining power of supplier. The companys primary focus is to build customer value. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. As AirAsia expanded its services, the company expanded its facilities, including travel It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. Performance of rivalry. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. AirAsia X has amplified its profit-making routes to multiple countries such as Australia, France, Iran, South Korea and New Zealand. The acronym refers to political, economic, social and technological factors. 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). 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. Some of the threats include: If you liked this article, we bet that you will love the Marketing91 Academy, which provides you free access to 10+ marketing courses and 100s of Case studies. AirAsia is one of the largest low fare airline companies in Asia, which has been expanding its routes to different countries since 2001. Air Asia is a low-cost airline headquartered in Malaysia. The complaints received by the organisation are identified to be the consequences of low prices as the organisation may face critical problems in ensuring service and assistance with the low-cost flights. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. Rise of Other LCCs in Market. 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. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. AirAsias positioning is very clear in being low-cost. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. Physical evidence encompasses the ways in which the company can maintain their position in the industry. They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. 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 major issue with maintaining low ticket price is the increasing competition in the airline industry. Malindo will compete against AirAsia on all three routes. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. The increase in oil prices has critically impacted the operations of the organisation. 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