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. That was AirAsias 4Ps mix, detailing each strategy and its purpose. AirAsia is a global airline with operations in more than 160 destinations in 25 countries. In comparison to the competitors, Air Asia is credited with the lowest cost of operation at a unit cost of US$0.023 per available seat kilometer (ASK) and a passenger breakeven load factor of 52%. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. 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: Porters Five-Forces Model of competitive analysis is widely implemented by most of the company to progress their strategies in many industries. Similar service provided among every airline company so the competitive may be fierce. This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. The approach towards providing the lowest costs results into a low opportunity for gaining significant profits as the company abides by its approach of maintaining lowest flight costs. But in 1993, Air Asia was established to finally connect Asia like no other airline company. 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. Points to consider while selecting a topic for dissertation help. 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. 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). Looking for a flexible role? Lets understand AirAsias competitors better with analysis. 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. Below are the Strengths in the SWOT Analysis of Air Asia : 1. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. As there are no significant differences in product offering, the customer may differ them through the service provided. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). WebAnalysis for Cost Leadership Strategy and Core. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. It follows vital certain strategies, which include safety first, high aircraft utilisation, streaming operations, lean distribution system and point-to-point network to amplify the working of its low-cost model (Zhang et al., 2017). WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. 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. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. AirAsia is known for its low fares and no-frills policy. The company confronts various complaints and issues from the customers who are numerous to resolve instantly and result in customer dissatisfaction. The largest airline in Malaysia the business is known to be highly employee centric. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. 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). It offered a new definition of affordable traveling with its Tagline Now Everyone Can Fly. We're here to answer any questions you have about our services. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. The company makes use of robust enterprise resource planning system, which allows it to successfully maintain process integrity, speeds up reporting, and data retrieval process. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. 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. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. Jetstar Airways 2. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. Do check out our Free Digital Marketing Masterclass by Karan Shah. Use Slintel to connect with top decision-makers at AirAsia. 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 composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Student Life Saviour 2022 - All rights reserved. The bargaining power of buyers is strong when the switching cost of airlines is low. AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. It is the largest airline company based on the concept of the Low-Cost Carrier (LCC) (Zhang et al., 2017). They may compete in term of their route offering that Airasia does not fly. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). Today, it connects domestic and international flights to more than 165 destinations within 25 countries. 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. It is an international air travel carrier that started its flights in Malaysia and expanded its base globally. 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 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. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. Features, such as improved WIFI and other entertainment facilities, can be improved with the help of latest trends and technologies in the IT industry. Air Asia can also implement a cost leadership business strategy. 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. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Air Asia is one of the leading brands in the airlines sector. Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. Your email address will not be published. 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 X joins AirAsia Berhad and Thai AirAsia with stock listings. It has been reviewed & published by the MBA Skool Team. 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. Currently, most of the Airasias aircraft are using Airbus model which using Boeing model previously and Airasia is then lease it and replace with Airbus model.If in case Airasia may wish to switch to Boeing again, the cost of training employee in operating the aircraft feature is high. Hi, I am an MBA and the CEO of Marketing91. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. Below are the top 3 competitors of Air Asia: 1. Air Asia Competitor analysis In order to compete with AirAsia,. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. With the increasing number of services by different competitors, AirAsia has also expanded its facilities including the tour packages and hotel booking services that help the company to sustain in the market. Increasing globalisation has led to an increase in the lifestyle and financial condition of people. Relative insignificant influence of buyer to supplier. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and This article has been researched & authored by the Content & Research Team. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. Air Asia is known for treating its employees and customers well. AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. 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 strengths of Air Asia looks at the key aspects of its business which gives it competitive advantage in the market. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. Other than that, hes a fun loving person. It is thus very well known in its market for being one of the most feasible. KLIA-Singapore is also served by four Singapore-based carriers Jetstar Asia, Tigerair, SilkAir and Singapore Airlines. In the increasing demand of the airline services, there is a tough competition in the airline industry because of the varied numbers of the competitors that are providing the airline services. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). Continue reading more about the brand/company. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. In contrast to this, Jet Star Airways has more types of planes that are provided to its customers that includes A320, Bombardier Q300, A321 and Boeing 787 Dream Liner; whereas AirAsia offers only two types of planes to its customers, which are A330 and A320. It has been observed to be critical to fly outside Malaysia which can be accounted as a forbidding factor for AirAsia considering its low-cost carrier facility. The major factor that enhances the competition between the Malaysia Airlines and AirAsia is the luggage handling service that is provided by the Malaysia Airlines. 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 article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. Concentration of Buyers power in many hands. Another strategy that the company will implement in the future is networking. 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