They may compete in term of their route offering that Airasia does not fly. Relative insignificant influence of buyer to supplier. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. *You can also browse our support articles here >. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and 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. 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. In anchor pricing strategy, the company prices its services along with the tickets at a low price. 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. AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. The company AirAsia, demographic segmentation is preferred. The content on MBA Skool has been created for educational & academic purpose only. 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). 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. Today, well discuss the swot analysis of AirAsia. This has raised the threat of substitution for Air Asia, as in any case of customer dissatisfaction or unavailability of service, it will be easy for the passengers to shift to some other airline company. 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. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. 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). Study for free with our range of university lectures! 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. Interested in learning more? In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. Very interesting and informative. AirAsias marketing strategy has worked wonders for the company in communicating exactly what they wanted to the customers. 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. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. Due to few suppliers in market, this has increasing the bargaining power of supplier. It mainly constitutes of two major subsidiary airlines that includes MASwings and Firefly. 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. 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. The Essay Writing ExpertsUK Essay Experts. 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 company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. 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. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. It is also because they are providing same service to the customer which is sent their customer to their destination by flight. These are people ranging from those who could not afford to fly previously, to corporate business employees whose employers are looking to fly them while cutting costs. It is essential to choose the right set of employees for the organisation in order to maintain their position. The following are strengths and weaknesses of AirAsia: 1. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. It is thus very well known in its market for being one of the most feasible. However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. 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). Competitiveness Points of Air Asia. Such events and teams have got millions of fan following, when an airline sponsors a team or an event, then it allows the company to reach new customers. Rise of Other LCCs in Market. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). The competitions are depending on the services provided and the suitability of the flight time for the customer. Its routes include both domestic and international flights. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. 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 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). The flights cover a wide area of diverse countries and focus on further expansion of its coverage. AirAsia uses various media platforms for the marketing and promotion of its products and services. 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. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. Thank you for reading this case study. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. 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$ The strengths of Air Asia looks at the key aspects of its business which gives it competitive advantage in the market. Air Asia is known as one of the most low-cost airlines in the airline industry. AirAsia is one of Asias most successful low-cost carriers. The threats for any business can be factors which can negatively impact its business. Lets understand AirAsias competitors better with analysis. 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. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. Furthermore. Continue reading more about the brand/company. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. 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. 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. Use Slintel to connect with top decision-makers at AirAsia. It is an international airline that began operations in Malaysia and has since expanded to include countries across the Asian continent, such as India and Thailand. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. 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