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). In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. The following are strengths and weaknesses of AirAsia: 1. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. Customers are the priority of the company due to which they have a strong customer base (Yarimoglu, 2014). Increasing globalisation has led to an increase in the lifestyle and financial condition of people. AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). The company is constantly using innovative solutions to provide low-cost transportation. There are several brands in the market which are competing for the same set of customers. Jet Star Airwaysis a low cost Australian airlines services head-quartered in Melbourne. Webprice wars with competitors, taxes and duty imposed on the firms products. 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). The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. Required fields are marked *. Before we get started, lets get to know the company a little more. As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. 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 cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. The bargaining power of buyers is strong when the switching cost of airlines is low. It offered a new definition of affordable traveling with its Tagline Now Everyone Can Fly. Switching Cost is low. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. But in 1993, Air Asia was established to finally connect Asia like no other airline company. *You can also browse our support articles here >. 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). AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. The Air Asia X mainly focuses on the long-haul routes (Yarimoglu, 2014). AirAsia has expanded its routes to different countries all around the world including Indonesia, China, Singapore and the Philippines. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). Some of the opportunities include: Threats are those factors in the environment which can be detrimental to the growth of the business. 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. Some writers often extend the acronyms to include legal and environmental factors. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. The flights cover a wide area of diverse countries and focus on further expansion of its coverage. It is also because they are providing same service to the customer which is sent their customer to their destination by flight. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. 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. Air Asia is known for treating its employees and customers well. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. Continue reading more about the brand/company. Low switching costs. Student Life Saviour 2022 - All rights reserved. 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. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. There are many services that are provided to the employees of the organisation, such as training and motivational lectures. Porters Five-Forces Model of competitive analysis is widely implemented by most of the company to progress their strategies in many industries. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. Moderate Portion of buyers expend on airline. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). The competitions advantage is the centre of a companys performance to face a direct competition. Considering the competitive characteristic of Malaysian airline market, AirAsia has comparatively gained significant customer attention from the customers due to its affordable tickets and additional services. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. 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. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. The company makes use of innovative solutions in order to provide low-cost aviation. The verdict overturned the Malaysian Competition Commission (MyCC) ruling that AirAsia and Malaysia Airlines (MAS) had colluded to share the market. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. Another important strategy that Air Asia will consider enhancing is improving Information Technology (IT) services in the company, as well as in the aeroplanes. Air Asia is smartly using its social media in building a direct relationship with its customers. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. 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 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. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. 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. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Relative insignificant influence of buyer to supplier. Free resources to assist you with your university studies! It has operations in over 25 countries and over 400 international and national destinations, 4. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. Has Positioned itself as the major LCC in SE Asia. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. It employs an anchor pricing policy, which establishes a baseline for pricing all AirAsia-operated flights. 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. 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. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. 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. Competitiveness Points of Air Asia. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. But the company is only operating its business only in 25 countries. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. The created segments consists of consumers who share similar interests, requirements and locations. Lets get into discussing their marketing efforts, starting with their marketing mix. Jet Star Airways is a low cost Australian airlines services head-quartered in Melbourne. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. This may makes the industry very competitive. Malindo will compete against AirAsia on all three routes. 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. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. Besides @flyairasia and The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. Browse marketing analysis of more brands and companies similar to Air Asia. The increase in oil prices has critically impacted the operations of the organisation. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. 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. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. Your email address will not be published. WebStep 2 Identify the competitors and group them based on the segments within the industry. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. Similarity of product. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). AirAsia X was regarded as having the worlds best low-cost airline premium seat and the worlds best low-cost airline premium cabin for five consecutive years (AirAsia X, 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. 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. 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: The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. 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. 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. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. Use Slintel to connect with top decision-makers at AirAsia. Discover AirAsia alternatives or similar companies to benchmark and competitors' market analysis. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. For example, they had a #responsibletraveller campaign on Instagram. 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. Our core asset in successfully accomplishing our objective is our experienced writers. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. Home Samples Marketing Environment Analysis of Air Asia. 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 should expand into more countries, increase the market, and target new customers. Below are the Strengths in the SWOT Analysis of Air Asia : 1. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. 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. 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. Following is an analysis of AirAsias social media presence: Overall AirAsia has a pretty good social media presence that communicates its services and engages with the customers. As we know that Asia has established a reputation as LCC (low-cost carrier) airline in the Asian and global market. 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. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. 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! That was AirAsias 4Ps mix, detailing each strategy and its purpose. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. AirAsia is headquartered in Malaysia and provides transportation services to its passengers along with cargo and courier services. The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Do essay writing needs professional writers? He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. This comes with a lot of competition. Many airline companies have entered the airline industry and they have made the market very competitive. 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. Points to consider while selecting a topic for dissertation help. Following are the opportunities in Air Asia SWOT Analysis: 1. This has been possible due to the companys relentless communication through various marketing channels. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. Start-up Cost is high. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. The company cannot control a number of charges and costs which are regulated by government and airline authorities which may result in a significant loss in profits and consistency of the organisation. 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