They should be used as a reference paper for further research. The threats for any business can be factors which can negatively impact its business. The opportunities for any brand can include areas of improvement to increase its business. 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. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. Your topic helped a lot, Your email address will not be published. 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. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. The price will be cheaper if you book earlier. It is the largest airline company based on the concept of the Low-Cost Carrier (LCC) (Zhang et al., 2017). Air Asia is known for its low pricing, as well as a no frill policy. 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). Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. 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. 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. 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. Thai AirAsia faces new competitive threats in Thai Lion and Thai VietJet. Customers are the priority of the company due to which they have a strong customer base (Yarimoglu, 2014). Low switching costs. Following is the SWOT analysis of AirAsia: Lastly, lets take a look at AirAsias social media marketing presence as digital marketing is also a very important part of any companys marketing strategy. Air Asia is one of the leading brands in the airlines sector. 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). 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. 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 Berhad also facilitates in operating businesses, related financial services and airline operation services. The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. 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. Before we get started, lets get to know the company a little more. 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. 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. AirAsia is one of Asias most successful low-cost carriers. AirAsia uses various media platforms for the marketing and promotion of its products and services. Pacific (Cebu Air Inc, 2012), AirAsia (AirAsia, 2011), and JetStar Airways (Jetstar Airways, 2012) all reporting increase in revenues and recording profits over the previous year. They have a vast network of operations around the world, flying domestically and internationally. 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. Thailand s market currently has just two local LCCs, Thai AirAsia and Nok Air. WebAirAsia Competitors Specify up to 10 symbols: WH REGN XHR NVO VRTX HOG IHG rprx Sophisticated investors, who have witnessed many market ups and downs, frequently In addition, there is competition among competitors on the routes offered to AirAsia. In anchor pricing strategy, the company prices its services along with the tickets at a low price. 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. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. 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. Along with these improvements, if AirAsia continues to deliver to its target market effectively, it will surely maintain its differentiated position in the industry. Free resources to assist you with your university studies! The competitions advantage is the centre of a companys performance to face a direct competition. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. But of course, there exist many competitors that require constant evaluation of strategies. Strengths. Following are the opportunities in Air Asia SWOT Analysis: 1. Physical evidence encompasses the ways in which the company can maintain their position in the industry. Required fields are marked *. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. Some more of these improvement areas can be found through its SWOT analysis. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. The branding of the logo of Air Asia is essential for them. The airline brand should exploit these circumstances. The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. 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. 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. This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. The verdict overturned the Malaysian Competition Commission (MyCC) ruling that AirAsia and Malaysia Airlines (MAS) had colluded to share the market. 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. 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. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. 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. 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). Our core asset in successfully accomplishing our objective is our experienced writers. They hence practice geographic segmentation by focusing their services primarily in Asia, Demographic segmentation- Being a low-cost airline, they cater to people in the low to medium income group, Psychographic segmentation- Their main customer is the cost-conscious traveler, AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines, JetStar is providing more payment options or gateways to its customers, AirAsia provides services to 130 destinations as compared to JetStar which provides services only to 80 destinations, Malaysia Airlines generates 113% of AirAsias revenue, Malaysia Airlines also has fewer employees, at 7,159 compared to AirAsias 20,000, AirAsia is the low-cost airline leader in the Asian market, The company has subsidiaries in Indonesia, Thailand, the Philippines, and Japan, It boasts a fleet of nearly 300 aircrafts, AirAsias positioning is steady and consistent in being a low-cost airline. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. Lets see how they compare amongst a few key indicators. Quizzes test your expertise in business and Skill tests evaluate your management traits. It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. Lets take a look at AirAsias marketing mix. 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. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. 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. Step 4 - Determine overall industry structure and test analysis of consistency. AirAsia has won many awards over the years. According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. 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. Today, well discuss the swot analysis of AirAsia. 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. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Rising Fuel Costs 2. AirAsia is known for its low fares and no-frills policy. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. The companys primary focus is to build customer value. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. Rising Labour Costs 3. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. Another strategy that the company will implement in the future is networking. The microenvironmental analysis for any company or organisation is performed using Porters Five force model. Air Asia Competitors There are several brands in the market which are competing for the same set of customers. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. Home Samples Marketing Environment Analysis of Air Asia. It employs an anchor pricing policy, which establishes a baseline for pricing all AirAsia-operated flights. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). Relative insignificant influence of buyer to supplier. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of Air Asia implements the strategy of networking in order to maintain sustainable relationships with its suppliers, as this helps the company to maintain a significant level of customer satisfaction and customer loyalty. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. Do check out our Free Digital Marketing Masterclass by Karan Shah. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. Start-up Cost is high. Sponsorship is also one of the great marketing tools. Thank you for reading this case study. 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. AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. This increases the probability of people to avail of airline services frequently. 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. 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. Lets get into discussing their marketing efforts, starting with their marketing mix. It allows its customers to choose the services they want without compromising on quality. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. 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). 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. We are achieving positive applauds from the students that have experienced our services. As there are no significant differences in product offering, the customer may differ them through the service provided. 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. 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%. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. AirAsia participates in a lot of price-based promotions. Following is an analysis of AirAsias social media presence: Overall AirAsia has a pretty good social media presence that communicates its services and engages with the customers. The competitions are depending on the services provided and the suitability of the flight time for the customer. 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. 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