Their target audience is- travelers looking for inexpensive flights. 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. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. The airline company has already got a subsidiary AirAsia India for the local market. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. Many airline companies have entered the airline industry and they have made the market very competitive. Jetstar Airways 2. It is essential to choose the right set of employees for the organisation in order to maintain their position. 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. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. The threats for any business can be factors which can negatively impact its business. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. WebAnalysis for Cost Leadership Strategy and Core. 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 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. The opportunities for any brand can include areas of improvement to increase its business. Following are the opportunities in Air Asia SWOT Analysis: 1. 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. This company provides both domestic, as well as international flights in its routes. 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 strategy encourages the customers to choose Air Asia over any other airline company. 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. This is due to Airbus is a UK based aviation company and their customer may come from around the world. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. If you did, be sure to share, comment, and let us know! MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. This has been possible through excellent brand positioning. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. 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. It employs an anchor pricing policy, which establishes a baseline for pricing all AirAsia-operated flights. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. Interested in learning more? 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. The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. In addition to this, various political factors can be highlighted by influencing the operations and management of AirAsia which have been mentioned below. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. The company will increase the current IT facilities used in the aircrafts to enhance the facilities provided to the customers. Sponsorship is also one of the great marketing tools. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. The increase in oil prices has critically impacted the operations of the organisation. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and In order to build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Study for free with our range of university lectures! It has operations in over 25 countries and over 400 international and national destinations, 4. AirAsia also acquired recognition for improving its supportive and constructive management, as it received rewarded by Center Asia Pacific Aviation (CAPA) as the best airline of the year. They have been a major player in the low-fare airline industry and have connected over 88 countries together. Air Asia has established itself as a strong competitor in the airline industry. 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 airline offers400destinations both local and international in25countries across the world. Increasing globalisation has led to an increase in the lifestyle and financial condition of people. Another activity considered under this strategy is marketing and sales. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. Low switching costs. Do check out our Free Digital Marketing Masterclass by Karan Shah. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Free resources to assist you with your university studies! 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. The airline brand should exploit these circumstances. Air Asia can also implement a cost leadership business strategy. Build a competitive intelligence sales and marketing strategy based on the data AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. Before we get started, lets get to know the company a little more. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. They may compete in term of their route offering that Airasia does not fly. Hence, customer may access to the current airlines information which are available at all time, this has reduced the power of negotiation for airlines and producing a strong customers bargaining power. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. 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. AirAsia X has amplified its profit-making routes to multiple countries such as Australia, France, Iran, South Korea and New Zealand. 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. It was started in 1993, and the operations began in 1996. Malindo will compete against AirAsia on all three routes. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. Learn how your comment data is processed. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. We hope you found what you were looking for. Some more of these improvement areas can be found through its SWOT analysis. Physical evidence encompasses the ways in which the company can maintain their position in the industry. Liked our work? In anchor pricing strategy, the company prices its services along with the tickets at a low price. 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. Brands, such as Jet Star Airways and Tiger Airways, are sustaining in the competition as they also provide air transportation at cheap costs to people along with enhanced in-flight services and varied options for passengers.This directly affects the customer strength of Air Asia, andthese companiespose a threat to the company. 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 biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. 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. 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. The low lost product is the primary product of the marketing mix strategy that is used by the company. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. Along with these improvements, if AirAsia continues to deliver to its target market effectively, it will surely maintain its differentiated position in the industry. 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. The major issue with maintaining low ticket price is the increasing competition in the airline industry. Focusing on providing air travel without frills at substantially lower prices, AirAsia has managed to achieve lower prices to attain high passenger loads, market share, and profitability by eliminating provision of The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. 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 biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. AirAsias mainproducts and servicesare KL Syariah Index of Bursa Malaysia, low price Santan meal, and duty-free merchandise, drinks, food, and other menus if you buy on board. Do you have a 2:1 degree or higher? AirAsia has won many awards over the years. 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. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. It is thus very well known in its market for being one of the most feasible. Air Asia is smartly using its social media in building a direct relationship with its customers. 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. AirAsia is known for its low fares and no-frills policy. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. Student Life Saviour 2022 - All rights reserved. The organisational image is consistent and successful concerning the competition in the market. Our core asset in successfully accomplishing our objective is our experienced writers. 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 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. Fixed Cost is high. Hence this concludes the Air Asia SWOT analysis. 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. Its customers 3- Assess the Porter Five forces in relation to the customers for airlines are... Professional writers the operations of the most feasible important factors in a brand 's strengths include its financial,! 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