Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. Lets get into discussing their marketing efforts, starting with their marketing mix. 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. The following are strengths and weaknesses of AirAsia: 1. If you did, be sure to share, comment, and let us know! 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. Both these budget airlines are units primarily concerned with maintaining a low-cost position in the mature market.. History of Garuda Airlines. Strengths. The branding of the logo of Air Asia is essential for them. 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. 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. There is no product differentiation while the only different is the airlines packages offered. The portions of income of an individual earns is the factors because when the portion is high, the more customers will look for cheaper price, hence the bargaining power of buyers will be strong. Hence this concludes the Air Asia SWOT analysis. 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. 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. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. The organisational image is consistent and successful concerning the competition in the market. The introduction of ASEAN open skies policy facilitates opportunities for expansion and generalised airline regulations among the south-east countries of Asia which would benefit the organisation. 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. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. Luggage handling is the major factor that is considered by the customer as well as the airlines industries and in context to this fact, Malaysia Airlines provides average 15 kg of luggage, and it does not include any additional charges in case there is few more luggage than the normal capacity provided by the airlines. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. Below are the Strengths in the SWOT Analysis of Air Asia : 1. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. 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). Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. 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. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. Lets take a look at AirAsias marketing mix. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. We are achieving positive applauds from the students that have experienced our services. 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. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. This has been possible through excellent brand positioning. Specific analysis has been conducted in order to analyse the market environment for AirAsia. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and 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. In anchor pricing strategy, the company prices its services along with the tickets at a low price. 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. In Kuala Lumpur. 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. It has been reviewed & published by the MBA Skool Team. 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. WebThe two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). 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. The price will be cheaper if you book earlier. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). Student Life Saviour is a prominent name in providing assignment, essay and dissertation help services to students. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. They have a vast network of operations around the world, flying domestically and internationally. Low Cost Model: Low cost operations and fixed costs . The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). 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. 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. AirAsia uses various media platforms for the marketing and promotion of its products and services. 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. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. The airline offers400destinations both local and international in25countries across the world. 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. They have official handles on all major platforms but for the purposes of this segment, we shall take a look at the main 3, which are Instagram, Twitter, and Facebook. 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. 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. 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 provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. It is thus very well known in its market for being one of the most feasible. High numbers of Competitor. Air Asia has established itself as a strong competitor in the airline industry. Below are the top 3 competitors of Air Asia: 1. It employs an anchor pricing policy, which establishes a baseline for pricing all AirAsia-operated flights. 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). Free resources to assist you with your university studies! The major issue with maintaining low ticket price is the increasing competition in the airline industry. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. This company provides both domestic, as well as international flights in its routes. The new handles will reflect AirAsia's brand identity and values, and make it easier for customers to connect with the airline and the super app on social media. Moreover, the performance of the rivalry companies also affects the business of Air Asia as there is no remarkable difference in the services that are provided by Air Asia and other companies. The company engages in anchor pricing strategy in its marketing mix. The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. Do check. Technology is a major component of organisational structure which is completely analysed on the basis of IT framework of Airasia in particular region. 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 market has confronted critical competition in the form of new competitors who have also introduced low-cost flights. That was AirAsias 4Ps mix, detailing each strategy and its purpose. Following are the opportunities in Air Asia SWOT Analysis: 1. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. Increasing globalisation has led to an increase in the lifestyle and financial condition of people. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. 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. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. Physical evidence encompasses the ways in which the company can maintain their position in the industry. The company AirAsia, demographic segmentation is preferred. The verdict overturned the Malaysian Competition Commission (MyCC) ruling that AirAsia and Malaysia Airlines (MAS) had colluded to share the market. Well established LCC operating out of South East Asia, 3. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. 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). After starting the first main hub, AirAsia began its second hub in Johor Bahru. Some writers often extend the acronyms to include legal and environmental factors. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. WebFive steps to successful analysis of. As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. Interested in learning more? 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. Performance of rivalry. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. 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). Let us now get into its marketing strategy. 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. Use Slintel to connect with top decision-makers at AirAsia. They have been a major player in the low-fare airline industry and have connected over 88 countries together. It is essential to choose the right set of employees for the organisation in order to maintain their position. Air Asia also engages itself in the promotion of the company through social media, print advertisements, and effective billboard advertising (Mele, Pels and Storbacka, 2015). AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. 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. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. 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. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. But of course, there exist many competitors that require constant evaluation of strategies. The company was established in 1993, and the official operation of the company was started on 18 November 1996. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. The basic product strategy in its marketing mix is its low-cost air services. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. 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. Air Asia is smartly using its social media in building a direct relationship with its customers. As per the results of the survey, AirAsia has. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. SWOT analysis of Air Asia analyses the brand by its strengths, weaknesses, opportunities & threats. The increase in oil prices has critically impacted the operations of the organisation. Hi, I am an MBA and the CEO of Marketing91. Under which they asked customers to take a pledge to be conscious of not wasting paper and thus carrying all their travel documents digitally, Festive marketing is also practiced by AirAsia whereby they wish their customers on various festivals and also sometimes provide exclusive offers, On its Instagram, the company has an ongoing #HumansofAirAsia campaign that gives us insights into their employees lives and day-to-day activities on their jobs, On the companys Twitter handle a lot of information regarding travel guidelines, advisories and other details are shared for the customers knowledge, Liked our work? 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. All work is written to order. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. Another reason for the threat of new entrants being low is government laws and regulations which pose restrictions on applying for permissions and license for operating an airline company. 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. Government regulations are strict. Sponsorship is also one of the great marketing tools. Many airline companies have entered the airline industry and they have made the market very competitive. 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. They truly contribute their lifelong learning in allowing students to succeed in their academics. Looking for a flexible role? In addition to this, various political factors can be highlighted by influencing the operations and management of AirAsia which have been mentioned below. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. About Air Asia 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. Competitiveness Points of Air Asia. Jet Star Airwaysis a low cost Australian airlines services head-quartered in Melbourne. WebCompare AirAsia against competitors. Study for free with our range of university lectures! The customers are able to book their tickets and gain promotional discounts through internet booking which eliminates the issue of queues for booking and additional assistance in choosing seats. 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. 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. It seems as the destination and customer market share of AirAsia is only limited to the Asian countries. 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