Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. The complaints received by the organisation are identified to be the consequences of low prices as the organisation may face critical problems in ensuring service and assistance with the low-cost flights. Here are the weaknesses in the Air Asia SWOT Analysis: 1.Not on too many routes as compared to market leaders 2.Stiff competition in its sector. 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. AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. Air Asia is known for treating its employees and customers well. Ease to switching. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. It allows its customers to choose the services they want without compromising on quality. Student Life Saviour is a prominent name in providing assignment, essay and dissertation help services to students. Tiger Airways. But the company is only operating its business only in 25 countries. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. Today, well discuss the swot analysis of AirAsia. Do essay writing needs professional writers? Jetstar Airways 2. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. Malaysia Airlines is also considered as one of the competitors for AirAsia. Sponsorship is also one of the great marketing tools. Air Asia can also implement a cost leadership business strategy. 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. The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. Performance of rivalry. It seems as the destination and customer market share of AirAsia is only limited to the Asian countries. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. About Air Asia In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. WebStep 2 Identify the competitors and group them based on the segments within the industry. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. Below are the Strengths in the SWOT Analysis of Air Asia : 1. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. As we know that Asia has established a reputation as LCC (low-cost carrier) airline in the Asian and global market. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. 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. AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines 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: Marketing mix 7 Ps and SWOT analysis can improve the brand value of AirAsia and identify the strengths and weaknesses of AirAsia along with determining the future opportunities. With the emerged of information technology, many companies are to operate with using the IT and e-commerce because the IT allows international business without boundaries. Due to few suppliers in market, this has increasing the bargaining power of supplier. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. The airline brand should exploit these circumstances. Interested in learning more? The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. Required fields are marked *. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. AirAsia is a Malaysian low cost and no-frills airline company, which has a unique slogan stated as Now Everyone Can Fly. AirAsia adopted the Computer Reservation System (CRS), which enabled it to introduce the first-ever ticket-less travel facility and also provides features such as advanced boarding passes and online ticket booking. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. AirAsia has expanded its routes to different countries all around the world including Indonesia, China, Singapore and the Philippines. 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). 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. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. 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. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. 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. The company is constantly using innovative solutions to provide low-cost transportation. Air Asia is one of the leading brands in the airlines sector. 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. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. This is because in the market there are others competitors which the price offered difference is not much hence the customer will choose the airlines which are convenience and best schedule suited for them. 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. Your email address will not be published. Continue reading more about the brand/company. Some of the key weaknesses of Air Asia are: Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. WebCompare AirAsia against competitors. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. Relative insignificant influence of buyer to supplier. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in The increasing cost, competitors, and limited international destinations are some of the main challenges. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. Continue reading more about the brand/company. 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). 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. 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. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. 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. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. AirAsias mission is to be the best company, which ensures good relations between its management and employees, to make everyone fly with AirAsia by attaining the lowest cost, employ new technology to maintain highest quality products and enhance service levels. 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. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). Fixed Cost is high. AirAsia is one of Asias most successful low-cost carriers. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. The company engages in anchor pricing strategy in its marketing mix. The companys primary focus is to build customer value. 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. But in 1993, Air Asia was established to finally connect Asia like no other airline company. 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. Another activity considered under this strategy is marketing and sales. After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. Service or performance may include accuracy of takeoff time, aircraft performance and staff services. It is also because they are providing same service to the customer which is sent their customer to their destination by flight. Looking for a flexible role? Exit Cost is high. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). Air Asia is smartly using its social media in building a direct relationship with its customers. The market has confronted critical competition in the form of new competitors who have also introduced low-cost flights. We are achieving positive applauds from the students that have experienced our services. Concentration of Buyers power in many hands. Lets take a look at AirAsias marketing mix. Today, well discuss the swot analysis of AirAsia. The company will increase the current IT facilities used in the aircrafts to enhance the facilities provided to the customers. It was started in 1993, and the operations began in 1996. SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. Swot Analysis of AirAsia Berhad. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. It is essential to choose the right set of employees for the organisation in order to maintain their position. This has been possible due to the companys relentless communication through various marketing channels. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. Low switching costs. Quizzes test your expertise in business and Skill tests evaluate your management traits. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. They have a vast network of operations around the world, flying domestically and internationally. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. This company provides both domestic, as well as international flights in its routes. Jet Star Airwaysare considered as the safest low cost carriers among the 10 safest carriers in the airline industry of Australia. Switching Cost is low. 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. No plagiarism, guaranteed! 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. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. 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. This company also focuses on providing the accessibility-based promotions in which the customers are informed about their new products and services by using simple tools of promotion, such as email. Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. The Essay Writing ExpertsUK Essay Experts. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. Study for free with our range of university lectures! It has a fleet of over 70 aircrafts, which fly to over 120 destinations and operates over 400 flights daily from its hubs situated in Thailand, Malaysia and Indonesia (AirAsia, 2018). This model is widely implemented by various organisations for the development of their strategies in the industry. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). The increase in oil prices has critically impacted the operations of the organisation. Our academic experts are ready and waiting to assist with any writing project you may have. 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. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. This has been possible through excellent brand positioning. The brand names and other brand information used in the SWOT Analysis section are properties of their respective companies. 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. Start-up Cost is high. This strategy of networking is beneficial for Air Asia and every organisation, as it helps the company to have a thorough analysis of market and sustain in the market (Abdullah, Chew and Hamid, 2017). AirAsia should expand into more countries, increase the market, and target new customers. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. Air Asia Competitor analysis In order to compete with AirAsia,. 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