The microenvironmental analysis for any company or organisation is performed using Porters Five force model. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. 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. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). WebAnalysis for Cost Leadership Strategy and Core. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. 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. The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. 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. 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. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. They may compete in term of their route offering that Airasia does not fly. 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. Before we get started, lets get to know the company a little more. Some more of these improvement areas can be found through its SWOT analysis. This results in significant reduction in the cost as the commission fee paid to travel agents are saved and can be used to maintain the facilities and services of the company (Pinto et al., 2015). The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. 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. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. Continue reading more about the brand/company. 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. WebFive steps to successful analysis of. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. Continue reading more about the brand/company. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. 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. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. It seems as the destination and customer market share of AirAsia is only limited to the Asian countries. There is no product differentiation while the only different is the airlines packages offered. There are many services that are provided to the employees of the organisation, such as training and motivational lectures. Some of the threats include: If you liked this article, we bet that you will love the Marketing91 Academy, which provides you free access to 10+ marketing courses and 100s of Case studies. Thank you for reading this case study. The company confronts various complaints and issues from the customers who are numerous to resolve instantly and result in customer dissatisfaction. This increases the probability of people to avail of airline services frequently. 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. 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. Required fields are marked *. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. Webprice wars with competitors, taxes and duty imposed on the firms products. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. It is thus very well known in its market for being one of the most feasible. Learn how your comment data is processed. Moderate Portion of buyers expend on airline. Concentration of Buyers power in many hands. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. Today, well discuss the swot analysis of AirAsia. 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! AirAsia uses various media platforms for the marketing and promotion of its products and services. 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). 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%. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. Switching Cost is low. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. 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. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. Today it is one of the most reputed Asia-based airline companies. Home Samples Marketing Environment Analysis of Air Asia. Air India to discontinue Vistara after merger, DS Group Partners with Lderach (Swiss Chocolate Maker), Castrols unveils a New Logo and a Refreshed Brand Identity. 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. Air Asia PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The brand colours of Air Asia are red and white, which represent determination along with passion, perfection, and positivity to serve customers high-quality services at low prices (Mele, Pels and Storbacka, 2015). 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 cost-cutting strategies of AirAsia are effective and beneficial in terms of financial growth and maintenance (Ahmad and Neal, 2006). This has been possible through excellent brand positioning. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. AirAsia is one of Asias most successful low-cost carriers. They may compete in term of their route offering that Airasia does not fly. 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). Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. AirAsia Airline As the best low-cost passenger. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. It constantly delivers on this promise of affordability, It is extremely difficult to keep costs as low as possible due to fluctuations in fuel prices and increases in service costs, AirAsia does not have its own MRO facility, Cut-throat competition in its sector. This comes with a lot of competition. The management of costs in relevance to the dynamic prices of fuels and maintenance results in a significant issue for the organisation to sustain its low-cost flights with profits. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. Step 4 - Determine overall industry structure and test analysis of consistency. 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. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. The company was established in 1993, and the official operation of the company was started on 18 November 1996. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. 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 I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Technology is a major component of organisational structure which is completely analysed on the basis of IT framework of Airasia in particular region. AirAsia should expand into more countries, increase the market, and target new customers. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. 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. The opportunities for any brand can include areas of improvement to increase its business. Another strategy that the company will implement in the future is networking. They may force to continue their operation even they are facing losses in order to cope with fixed costs. Air Asia is known as one of the most low-cost airlines in the airline industry. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. A recipient of numerous awards Air Asia has been consecutively designated as the leading low-cost carrier in the Asian region. 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. 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.