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 Another strategy that the company will implement in the future is networking. Malindo will compete against AirAsia on all three routes. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). 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. It mainly constitutes of two major subsidiary airlines that includes MASwings and Firefly. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. The increasing cost has made it impossible for the company to offer low prices and remain profitable. Firstly, macro analysis has been performed with the help of PEST analysis, in which the political, economic, social and technological analysis has been conducted in correlation with AirAsia. 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). 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. 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. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. Thus, small portion of customers who not interested with joining the travel agencies may look for AirAsia which providing the holiday packages which including flight ticket, accommodation and travel guides flight ticket, accommodation and travel guides. 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. Rising Fuel Costs 2. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. But of course, there exist many competitors that require constant evaluation of strategies. Air Asia is a low-cost airline headquartered in Malaysia. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. Air Asia is known for treating its employees and customers well. Air Asia is known as one of the most low-cost airlines in the airline industry. KLIA-Singapore is also served by four Singapore-based carriers Jetstar Asia, Tigerair, SilkAir and Singapore Airlines. 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. Their target audience is- travelers looking for inexpensive flights. Other than that, hes a fun loving person. 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. Some more of these improvement areas can be found through its SWOT analysis. The largest airline in Malaysia the business is known to be highly employee centric. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. Start-up Cost is high. 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. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. The profits of the organisation have been observed to be remarkable which introduce an opportunity to new competitors causing a severe threat to AirAsia for sustainable profits. AirAsia focuses on providing guests with comfort through competent facilities that meet industry standards, as well as regular flights and secure point-to-point connectivity. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. Diversified in product offered. AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. 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. Lets see how they compare amongst a few key indicators. Webprice wars with competitors, taxes and duty imposed on the firms products. The price offer by an airline company may not be fixed but it will depend on the time differences between the date of booking and flight. Following are the opportunities in Air Asia SWOT Analysis: 1. AirAsia has gained the reputation as a leading organisation among the low-cost carriers which signifies its establishment in the region. Below are the top 3 competitors of Air Asia: 1. This article has been researched & authored by the Content & Research Team. The competitions advantage is the centre of a companys performance to face a direct competition. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. Discover AirAsia alternatives or similar companies to benchmark and competitors' market analysis. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. As per the results of the survey, AirAsia has. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. The company AirAsia, demographic segmentation is preferred. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. Do check. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). Physical evidence encompasses the ways in which the company can maintain their position in the industry. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. This strategy encourages the customers to choose Air Asia over any other airline company. Some writers often extend the acronyms to include legal and environmental factors. Lets see how they compare amongst a few key indicators. Features, such as improved WIFI and other entertainment facilities, can be improved with the help of latest trends and technologies in the IT industry. The basic product strategy in its marketing mix is its low-cost air services. AirAsia was named as the best low-cost airline company in the world for 9 consecutive years at the Skytrax World Airline Awards. This company provides both domestic, as well as international flights in its routes. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. They should be used as a reference paper for further research. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. In 2002, AirAsia became the first airline company in the region that allowed passengers with the facility to pay for their bookings by using credit card. Air Asia is one of the leading brands in the airlines sector. This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. 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. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. As the rivalry is strong, Airasia may constant in price reduction to compete with them. However, the company has employed more than20,000employees to manage its worldwide operations. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. Thank you for reading this case study. 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. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. It seems as the destination and customer market share of AirAsia is only limited to the Asian countries. 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? The price will be cheaper if you book earlier. The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. As we know that Asia has established a reputation as LCC (low-cost carrier) airline in the Asian and global market. IT infrastructure of the organisation is utilised with a remarkable approach which enhances the operations and management of the organisation. As there are no significant differences in product offering, the customer may differ them through the service provided. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. Supplier concentration in a few hands. Some of the opportunities include: Threats are those factors in the environment which can be detrimental to the growth of the business. However, there is also a barrier to the establishment of the new entrant in the airlines, which is the high start-up cost that is required for the airline services. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. It is essential to choose the right set of employees for the organisation in order to maintain their position. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. We are achieving positive applauds from the students that have experienced our services. Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. As AirAsia expanded its services, the company expanded its facilities, including travel This has been possible due to the companys relentless communication through various marketing channels. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. 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. 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). SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. 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). 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. 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. Looking for a flexible role? Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. Student Life Saviour is a prominent name in providing assignment, essay and dissertation help services to students. There are several brands in the market which are competing for the same set of customers. The increase in oil prices has critically impacted the operations of the organisation. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. Today, well discuss the swot analysis of AirAsia. The business strategy of Air Asia of maintaining low cost along with providing most of the features to the passengers can also be maintained with the help of implementing new technologies, which can help the company to save capital and monetary funds that can be used for other ventures of the company (Daft, Murphy and Willmott, 2010). AirAsia is known for its low fares and no-frills policy. 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. 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. After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. There is no product differentiation while the only different is the airlines packages offered. Similarity of product. Air India, Emirates, and many other Asian airlines have also started following the low-cost carrier strategy to attract market share. Performance of rivalry. 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. Jetstar Airways 2. This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. 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 worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. 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 company believes that customers are the key to their expansion along with their growth. 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. Air Asia can also implement a cost leadership business strategy. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. The airline company has already got a subsidiary AirAsia India for the local market. In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. Lets understand AirAsias competitors better with analysis. Its routes include both domestic and international flights. 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. As there are approximately 59 low cost airline operating in the industry,it is always easily for the customer to look for alternative. 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. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). Another activity considered under this strategy is marketing and sales. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. Moderate Portion of buyers expend on airline. Student Life Saviour 2022 - All rights reserved. Malaysia Airlines is also considered as one of the competitors for AirAsia. Porters Five-Forces Model of competitive analysis is widely implemented by most of the company to progress their strategies in many industries. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. *You can also browse our support articles here >. Learn how your comment data is processed. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in The content on MBA Skool has been created for educational & academic purpose only. Due to competitive in airline industry and protects on national airline, MAS which facing losses in these year, it is quite difficult to apply for licensing and permit for operating airline company. AirAsia X has amplified its profit-making routes to multiple countries such as Australia, France, Iran, South Korea and New Zealand. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. The airline offers400destinations both local and international in25countries across the world. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. 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. Low Cost Model: Low cost operations and fixed costs . This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. It offered a new definition of affordable traveling with its Tagline Now Everyone Can Fly. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines Similarity in product offering. The company makes use of Yield Management System (YMS), Customer Reservation System (CSR) and Enterprise Resource Planning (ERP) system, which makes it more effective in providing its services, reduces overall cost, and eliminates inefficiency in their business. 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. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). 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. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Back in the 1900s Thai National Airlines was the only airline that could fly in the main routes of Bangkok Chiang Mai with non-stop flights. 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. 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. 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 approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. Sponsorship is also one of the great marketing tools. Along with these improvements, if AirAsia continues to deliver to its target market effectively, it will surely maintain its differentiated position in the industry. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). 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. 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. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. 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. 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. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. AirAsia has been facing the competition with the varied existing low fare airlines that include Jet Star Airways, Tiger Airways, JAL Express and Air Arabia. It has operations in over 25 countries and over 400 international and national destinations, 4. In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. 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. This has been possible through excellent brand positioning. They may force to continue their operation even they are facing losses in order to cope with fixed costs. Lets take a look at AirAsias marketing mix. The increasing cost, competitors, and limited international destinations are some of the main challenges. 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 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. The following are strengths and weaknesses of AirAsia: 1. Browse marketing analysis of more brands and companies similar to Air Asia. Swot analysis of more brands and companies similar to Air Asia, 4 the strengths and weaknesses are internal! 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