Air Asia also engages itself in the promotion of the company through social media, print advertisements, and effective billboard advertising (Mele, Pels and Storbacka, 2015). Sponsorship is also one of the great marketing tools. The content on MBA Skool has been created for educational & academic purpose only. But the company is only operating its business only in 25 countries. This has been possible through excellent brand positioning. Porters Five-Forces Model of competitive analysis is widely implemented by most of the company to progress their strategies in many industries. AirAsia Airline As the best low-cost passenger. Concentration of Buyers power in many hands. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. AirAsia has been a successful part of the airline industry for over a decade. 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. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. Learn how your comment data is processed. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. The organisational image is consistent and successful concerning the competition in the market. Rising Fuel Costs 2. Fixed cost incurred by an airline company may include the finance cost, hire purchase and staff cost while this fixed cost may be reduce through increase in market share. Home Samples Marketing Environment Analysis of Air Asia. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Moderate Portion of buyers expend on airline. 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 Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. 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. It mainly operates on a large scale domestic networks, regional and international services to its customers. Relative insignificant influence of buyer to supplier. 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. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. 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. The price will be cheaper if you book earlier. This comes with a lot of competition. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Basic things to know before seeking help in assignment. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. 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. Air Asia Competitor analysis In order to compete with AirAsia,. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. Lets see how they compare amongst a few key indicators. 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). The airline brand should exploit these circumstances. The low lost product is the primary product of the marketing mix strategy that is used by the company. 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. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest Browse marketing analysis of more brands and companies similar to Air Asia. WebCompare AirAsia against competitors. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. 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. 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. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. Air Asia has established itself as a strong competitor in the airline industry. Similarity of product. 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. Continue reading more about the brand/company. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. 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. Air Asia is a low-cost airline headquartered in Malaysia. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. The market has confronted critical competition in the form of new competitors who have also introduced low-cost flights. 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. In anchor pricing strategy, the company prices its services along with the tickets at a low price. 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 weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Diversified in product offered. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. 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. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). Today it is one of the most reputed Asia-based airline companies. This may makes the industry very competitive. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. 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. 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 company makes use of innovative solutions in order to provide low-cost aviation. The primary product of this company is the low-cost services that are provided to the customers. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. The Essay Writing ExpertsUK Essay Experts. The competitions advantage is the centre of a companys performance to face a direct competition. Relative Price. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. It has operations in over 25 countries and over 400 international and national destinations, 4. The acronym refers to political, economic, social and technological factors. 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. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. The bargaining power of buyers is strong when the switching cost of airlines is low. 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. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. The following are strengths and weaknesses of AirAsia: 1. AirAsia is a global airline with operations in more than 160 destinations in 25 countries. 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