To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! There are several brands in the market which are competing for the same set of customers. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. Similar service provided among every airline company so the competitive may be fierce. Your email address will not be published. The case involves the AirAsia is a low-cost multinational Malaysian airline. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. 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. Airlines allowed to increase ight operations, with strict Maximising revenue in a reduced capacity/ competition 2020 environment 14 74,642 mil 45-60% of 2019 85% of 2019 In anchor pricing strategy, the company prices its services along with the tickets at a low price. 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. Thank you for reading this case study. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. Lets understand AirAsias competitors better with analysis. Furthermore, landing charges can be identified as the negative aspect resulting into underdevelopment of the airline industry as the aviation sector is strictly obligated to abide by precise air rights regulations and norms. The company AirAsia, demographic segmentation is preferred. Well established LCC operating out of South East Asia, 3. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). Lets see how they compare amongst a few key indicators. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. Air Asia is one of the leading brands in the airlines sector. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. The Indian market is highly price-conscious. 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. 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. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. The increasing cost, competitors, and limited international destinations are some of the main challenges. In the past years, this company has enhanced its customer base by providing different service options through efficient payment channels along with other facilities like ticket-less 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. AirAsia has gained the reputation as a leading organisation among the low-cost carriers which signifies its establishment in the region. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. 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). 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). The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. can be threats. This is act as a barrier of entry for the competitor as there are high in capital requirement such as set up of headquarters, purchasing or hiring aircraft, appointment pilots and other staffs like air supervisor. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. WebCompare AirAsia against competitors. Air Asia is known for its low pricing, as well as a no frill policy. The company will increase the current IT facilities used in the aircrafts to enhance the facilities provided to the customers. 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). Before we get started, lets get to know the company a little more. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. 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. The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. 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. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. The brand names and other brand information used in the SWOT Analysis section are properties of their respective companies. The company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. AirAsia uses various media platforms for the marketing and promotion of its products and services. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. Strengths. There are many services that are provided to the employees of the organisation, such as training and motivational lectures. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. 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. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. Tiger Airways. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. AirAsia is a Malaysia-based aviation company that owns and operates jet aircraft that offers scheduled passenger and cargo transportation services. Along with these improvements, if AirAsia continues to deliver to its target market effectively, it will surely maintain its differentiated position in the industry. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. Air Asia is known for treating its employees and customers well. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. 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. The Threat of Substitution The international airline market has sufficient low-priced airline options available for passengers to travel. 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. Features, such as improved WIFI and other entertainment facilities, can be improved with the help of latest trends and technologies in the IT industry. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. Its routes include both domestic and international flights. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. 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). 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. AirAsia should expand into more countries, increase the market, and target new customers. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. 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. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. They should be used as a reference paper for further research. 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. Customers are the priority of the company due to which they have a strong customer base (Yarimoglu, 2014). gained a smart rating of 54 whereas Malaysia Airlines has gained the rating of 85 which, signifies the contrast of both the airlines in terms of acceptance of the services and feedback by the customers (Holiday.My, 2018). AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. 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. 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. Start-up Cost is high. The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. The company is constantly using innovative solutions to provide low-cost transportation. 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. They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. 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. These include a 36% increase in passengers carried by AirAsia Malaysia, 79% increase in passengers carried by AirAsia India and an increase of 65% of passengers carried by AirAsia Thailand. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. Some factors like increased competitor activity, changing government policies, alternate products or services etc. The microenvironmental analysis for any company or organisation is performed using Porters Five force model. Do check out our Free Digital Marketing Masterclass by Karan Shah. The basic product strategy in its marketing mix is its low-cost air services. 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. Hi, I am an MBA and the CEO of Marketing91. It is an international air travel carrier that started its flights in Malaysia and expanded its base globally. 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 Air Asia X mainly focuses on the long-haul routes (Yarimoglu, 2014). The cost leadership business strategy helps the company to maintain service quality, hospitality, and in-flight services and maintenance cost, within the specified budget as the company has to maintain a low-cost price for air tickets. This article has been researched & authored by the Content & Research Team. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. Knowing the increase of competition in the market, AirAsia applied the adaptation process (Hanan & Freeman, 1984) by expanding its operation to long haul services to various destinations. The cost-cutting strategies of AirAsia are effective and beneficial in terms of financial growth and maintenance (Ahmad and Neal, 2006). 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. Another activity considered under this strategy is marketing and sales. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. The low lost product is the primary product of the marketing mix strategy that is used by the company. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. The increasing cost has made it impossible for the company to offer low prices and remain profitable. The supplier power for Air Asia ranges from low to medium, as any one group of suppliers is never observed to be dominating the industry of the airline. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. 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. In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. Find useful insights on AirAsias company details, tech stack, news alerts, competitors and more. Do essay writing needs professional writers? Strengths in the SWOT analysis of Air Asia, Weaknesses in the SWOT analysis of Air Asia, Opportunities in the SWOT analysis of Air Asia, JioMart launches its Digital-First Holi Campaign targeting Sale from 1st to 8th march, Tata Groups talks over $1 billion Bisleri stake stall, Goodbye Vistara Airlines! Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Quizzes test your expertise in business and Skill tests evaluate your management traits. 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. In order to stay ahead of the competition, the company needs to constantly invest in improving the additional facilities that make a difference to customers in todays times such as disposable in-flight meals, complimentary WiFi, entertainment facilities, and varied seat options. 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. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and Sponsorship is also one of the great marketing tools. Low Cost Model: Low cost operations and fixed costs . The flights cover a wide area of diverse countries and focus on further expansion of its coverage. Step 4 - Determine overall industry structure and test analysis of consistency. 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. Student Life Saviour is a prominent name in providing assignment, essay and dissertation help services to students. Air Asia Competitor analysis In order to compete with AirAsia,. Learn how your comment data is processed. WebAnalysis for Cost Leadership Strategy and Core. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. Today, well discuss the swot analysis of AirAsia. There is no product differentiation while the only different is the airlines packages offered. Use Slintel to connect with top decision-makers at AirAsia. As AirAsia expanded its services, the company expanded its facilities, including travel Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. It mainly constitutes of two major subsidiary airlines that includes MASwings and Firefly. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. 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. 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. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. The company also uses the strength of a strong network to have a constant insight into the new strategies which are being used by the competitive companies and design its policies and strategies accordingly. 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. It must have a good relation with hotels and tourism companies around Asia. He has been a guest speaker at prominent colleges in India including IIMs[Read full bio], Your email address will not be published. Very interesting and informative. 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. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. It was started in 1993, and the operations began in 1996. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. The strengths of Air Asia looks at the key aspects of its business which gives it competitive advantage in the market. Required fields are marked *. 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