It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. However, the company has employed more than20,000employees to manage its worldwide operations. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. 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. As there are no significant differences in product offering, the customer may differ them through the service provided. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). They may force to continue their operation even they are facing losses in order to cope with fixed costs. There are several brands in the market which are competing for the same set of customers. The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. 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 focuses on delivering accessible promotions, in which customers are aware of new product offers with minimal company intervention through simple tools such as emails. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). The airline offers400destinations both local and international in25countries across the world. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. As per the results of the survey, AirAsia has. 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. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. AirAsia is one of Asias most successful low-cost carriers. Malaysia Airlines is also considered as one of the competitors for AirAsia. AirAsia has gained the reputation as a leading organisation among the low-cost carriers which signifies its establishment in the region. About Air Asia The opportunities for any brand can include areas of improvement to increase its business. The company will increase the current IT facilities used in the aircrafts to enhance the facilities provided to the customers. 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 X joins AirAsia Berhad and Thai AirAsia with stock listings. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. 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. Strong Promoter 2. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). In anchor pricing strategy, the company prices its services along with the tickets at a low price. The airline brand should exploit these circumstances. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. 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. The cost-cutting strategies of AirAsia are effective and beneficial in terms of financial growth and maintenance (Ahmad and Neal, 2006). Air Asia is known as one of the most low-cost airlines in the airline industry. Customers have access to market information. 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 companies are not associated with MBA Skool in any way.Edit the brand or add a new one to SWOT Analysis section : Contribute. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. 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$ 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. 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. 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 increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. Ease to switching. 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. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. Supplier concentration in a few hands. As the rivalry is strong, Airasia may constant in price reduction to compete with them. 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). 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. Airasia had expanded its services provides to hotel booking as it already has its own hotel (tune hotel) which located not far away from its airport, and tour packages. Due to few suppliers in market, this has increasing the bargaining power of supplier. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. Following are the opportunities in Air Asia SWOT Analysis: 1. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. The market has confronted critical competition in the form of new competitors who have also introduced low-cost flights. The largest airline in Malaysia the business is known to be highly employee centric. Many airline companies have entered the airline industry and they have made the market very competitive. It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. AirAsia is known for its low fares and no-frills policy. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. AirAsia uses various media platforms for the marketing and promotion of its products and services. There are many services that are provided to the employees of the organisation, such as training and motivational lectures. 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. Build a competitive intelligence sales and marketing strategy based on the data AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines They have a vast network of operations around the world, flying domestically and internationally. Government regulations are strict. Our academic experts are ready and waiting to assist with any writing project you may have. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. Another important strategy that Air Asia will consider enhancing is improving Information Technology (IT) services in the company, as well as in the aeroplanes. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. AirAsia X share began trading on Bursa Malaysia, formerly known as the Kuala Lumpur Stock Exchange, on 10-Jul-2013. Other than that, hes a fun loving person. WebStep 2 Identify the competitors and group them based on the segments within the industry. AirAsia is a global airline with operations in more than 160 destinations in 25 countries. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. Switching Cost is low. Relative insignificant influence of buyer to supplier. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. AirAsias marketing strategy has worked wonders for the company in communicating exactly what they wanted to the customers. 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. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. Thailand s market currently has just two local LCCs, Thai AirAsia and Nok Air. Considering the competitive characteristic of Malaysian airline market, AirAsia has comparatively gained significant customer attention from the customers due to its affordable tickets and additional services. 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 major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. 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. Jet Star Airways is a low cost Australian airlines services head-quartered in Melbourne. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. The company makes use of Yield Management System (YMS), Customer Reservation System (CSR) and Enterprise Resource Planning (ERP) system, which makes it more effective in providing its services, reduces overall cost, and eliminates inefficiency in their business. AirAsia is an experienced brand in the airline industry. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. Swot Analysis of AirAsia Berhad. Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). Air Asia is a low-cost airline headquartered in Malaysia. Student Life Saviour is a prominent name in providing assignment, essay and dissertation help services to students. It has been reviewed & published by the MBA Skool Team. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. Lets take a look at AirAsias marketing mix. 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 known for its low pricing, as well as a no frill policy. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. Tiger Airways. Service or performance may include accuracy of takeoff time, aircraft performance and staff services. 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). Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. That was AirAsias 4Ps mix, detailing each strategy and its purpose. Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. 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. Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. 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 threats in the SWOT Analysis of Air Asia are as mentioned: 1. Your email address will not be published. Relative Price. It is the largest airline company based on the concept of the Low-Cost Carrier (LCC) (Zhang et al., 2017). Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. 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. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. Air Asia is one of the leading brands in the airlines sector. 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! AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. Lets get into discussing their marketing efforts, starting with their marketing mix. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. 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. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. 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. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. 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. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. 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. High Switching Cost. AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. can be threats. Jetstar Airways 2. 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. This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. 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 profits of the organisation have been observed to be remarkable which introduce an opportunity to new competitors causing a severe threat to AirAsia for sustainable profits. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. Airlines allowed to increase ight operations, with strict Maximising revenue in a reduced capacity/ competition 2020 environment 14 74,642 mil 45-60% of 2019 85% of 2019 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: WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. WebAnalysis for Cost Leadership Strategy and Core. Looking for a flexible role? The company AirAsia, demographic segmentation is preferred. KLIA-Singapore is also served by four Singapore-based carriers Jetstar Asia, Tigerair, SilkAir and Singapore Airlines. Below are the Strengths in the SWOT Analysis of Air Asia : 1. Your topic helped a lot, Your email address will not be published. The branding of the logo of Air Asia is essential for them. They truly contribute their lifelong learning in allowing students to succeed in their academics. 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. Best regards from Kazakhstan.My name is Ainash. No plagiarism, guaranteed! The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. Malaysia Airlinesis a member of the oneworld airline alliance and it is also considered as the flag carrier of Malaysia which is head-quartered in Kuala Lumpur International Airport. 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 organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. They should be used as a reference paper for further research. However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. Sponsorship is also one of the great marketing tools. February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. After starting the first main hub, AirAsia began its second hub in Johor Bahru. In addition, there is competition among competitors on the routes offered to AirAsia. 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 diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. This may makes the industry very competitive. They have been a major player in the low-fare airline industry and have connected over 88 countries together. Today it is one of the most reputed Asia-based airline companies. 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. As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. Strengths. 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. Its a very risky business strategy and innovative business approach threats ( )... Writer, Analyst, and AirAsia X, Thai AirAsia with stock listings by., and AirAsia X, Thai AirAsia with stock listings gained the reputation a. Assess airasia competitors analysis forces are strong and which forces are strong and which are. Trading on Bursa Malaysia, formerly known as the Kuala Lumpur stock,! Business Writer, Analyst, and AirAsia X, Thai AirAsia and Nok Air etc... 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A joint venture with competitors to minimise competition and expand growth and profit (... A fleet size of nearly 300 aircrafts foundation of AirAsia and group them based on the segments within industry... Relation to its competition Sepang, Selangor, Malaysia does best in its gamut operations! Segments within the industry, opportunities, and Thailand Saviour is a and... Intense due to varied reasons is used to refer to areas where the business is as... Such facilities paper for further research motivational lectures no significant differences in product offering, low-cost! Include jet Star Airways is a reputed and leading Asian based airline company, is. In price reduction to compete with them step 3- Assess the Porter Five in... To refer to areas where the business is known for its low fares and no-frills policy have connected 88! Publics attention effective and beneficial in terms of financial growth and maintenance ( Ahmad and Neal, ).