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. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. The company is constantly using innovative solutions to provide low-cost transportation. AirAsia is one of Asias most successful low-cost carriers. 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. AirAsia X has amplified its profit-making routes to multiple countries such as Australia, France, Iran, South Korea and New Zealand. 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. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. 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. WebFive steps to successful analysis of. It is also because they are providing same service to the customer which is sent their customer to their destination by flight. 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. 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). Relative Price. 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. Do check out our Free Digital Marketing Masterclass by Karan Shah. They have a vast network of operations around the world, flying domestically and internationally. As per the results of the survey, AirAsia has. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). Required fields are marked *. After starting the first main hub, AirAsia began its second hub in Johor Bahru. KLIA-Singapore is also served by four Singapore-based carriers Jetstar Asia, Tigerair, SilkAir and Singapore Airlines. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. The Essay Writing ExpertsUK Essay Experts. This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. Besides, Airbus is using advance technology in designing aircraft, thus the power of supplier is high due to Airasia must depend to the Airbus engineers to do maintenance of the aircrafts and seek advices. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. 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. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Thailand s market currently has just two local LCCs, Thai AirAsia and Nok Air. Let us now get into its marketing strategy. Other than that, hes a fun loving person. As the rivalry is strong, Airasia may constant in price reduction to compete with them. The basic product strategy in its marketing mix is its low-cost air services. 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. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. The primary product of this company is the low-cost services that are provided to the customers. The company AirAsia, demographic segmentation is preferred. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. 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. Ease to switching. However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. Use Slintel to connect with top decision-makers at AirAsia. 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. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. Tiger Airways. 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. Low switching costs. Interested in learning more? The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. 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. Your email address will not be published. The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. This reduces the chances of small or medium enterprises to enter this industry, and hence, the threat of new entrants for Air Asia is very low. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. The case involves the AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. 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 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. The acronym refers to political, economic, social and technological factors. AirAsia has been a successful part of the airline industry for over a decade. Continue reading more about the brand/company. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). 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. The increase in oil prices has critically impacted the operations of the organisation. But in 1993, Air Asia was established to finally connect Asia like no other airline company. Study for free with our range of university lectures! The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Lets take a look at AirAsias marketing mix. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). The increasing cost, competitors, and limited international destinations are some of the main challenges. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. Air Asia is known for its low pricing, as well as a no frill policy. 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. Swot Analysis of AirAsia Berhad. 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. Following are the opportunities in Air Asia SWOT Analysis: 1. 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. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. 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. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. 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. Rising Labour Costs 3. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. Free resources to assist you with your university studies! AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. We're here to answer any questions you have about our services. The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. 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. Due to few suppliers in market, this has increasing the bargaining power of supplier. Thai AirAsia faces new competitive threats in Thai Lion and Thai VietJet. Some more of these improvement areas can be found through its SWOT analysis. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). The company was established in 1993, and the official operation of the company was started on 18 November 1996. 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. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. Similarity of product. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. Air Asia Competitor analysis In order to compete with AirAsia,. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. AirAsia uses various media platforms for the marketing and promotion of its products and services. In order to build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. In Kuala Lumpur. There are several brands in the market which are competing for the same set of customers. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. 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. Below are the top 3 competitors of Air Asia: 1.Jetstar Airways 2.SilkAir 3.Tiger Airways. Many airline companies have entered the airline industry and they have made the market very competitive. AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. 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. This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. Given the current situation, in-flight experience, especially hygiene matters a lot to customers so AirAsia should heavily market its hospitality and put customers at ease in availing their services. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. Strengths. Increasing globalisation has led to an increase in the lifestyle and financial condition of people. WebAirAsia Competitors Specify up to 10 symbols: WH REGN XHR NVO VRTX HOG IHG rprx Sophisticated investors, who have witnessed many market ups and downs, frequently The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. In anchor pricing strategy, the company prices its services along with the tickets at a low price. As there are approximately 59 low cost airline operating in the industry,it is always easily for the customer to look for alternative. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. 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. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. 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). Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. The companies are not associated with MBA Skool in any way.Edit the brand or add a new one to SWOT Analysis section : Contribute. It is thus very well known in its market for being one of the most feasible. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. Performance of rivalry. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. The content on MBA Skool has been created for educational & academic purpose only. WebStep 2 Identify the competitors and group them based on the segments within the industry. Just over 790 million shares were sold, including 592.6 million new shares, at MYR1.25 per share (USD39 cents), making it the largest IPO in Malaysia 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). Some writers often extend the acronyms to include legal and environmental factors. The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. Our academic experts are ready and waiting to assist with any writing project you may have. 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). Thank you for reading this case study. This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. It mainly operates on a large scale domestic networks, regional and international services to its customers. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. 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. Currently, the priority for the company is to maintain the fundamental principle of keeping travel fair as low as possible so that people with weak financial status can also afford to travel in flights. Before we get started, lets get to know the company a little more. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. 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 verdict overturned the Malaysian Competition Commission (MyCC) ruling that AirAsia and Malaysia Airlines (MAS) had colluded to share the market. As there are adequate options available for passengers to choose from, at the similar price as Air Asia, the company needs to focus on the amenities and hospitality services it provides to the customers. AirAsias positioning is very clear in being low-cost. The Air Asia X mainly focuses on the long-haul routes (Yarimoglu, 2014). 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. Strong Promoter 2. 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. 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. AirAsia Airline As the best low-cost passenger. Required fields are marked *. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. 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). (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). 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. Air Asia is a low-cost airline headquartered in Malaysia. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. 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. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. 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. 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. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. 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. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). Do you have a 2:1 degree or higher? This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. Best regards from Kazakhstan.My name is Ainash. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. This increases the probability of people to avail of airline services frequently. But the company is only operating its business only in 25 countries. Below are the Strengths in the SWOT Analysis of Air Asia : 1. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. This involves a detailed analysis of their actions and how these would affect the future strategies of AirAsia Flying Low Cost with High Hopes. The Indian market is highly price-conscious. 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. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. They may force to continue their operation even they are facing losses in order to cope with fixed costs. Its routes include both domestic and international flights. Another strategy that the company will implement in the future is networking. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. The increasing cost has made it impossible for the company to offer low prices and remain profitable. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). 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. During tourism seasons considering the various tourism locations in Asia new one to SWOT analysis is a technique for these. 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