This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. 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. 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. AirAsia has expanded its routes to different countries all around the world including Indonesia, China, Singapore and the Philippines. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. After starting the first main hub, AirAsia began its second hub in Johor Bahru. Relative Price. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. 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. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. 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. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. Tiger Airways. 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. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). In Kuala Lumpur. This comes with a lot of competition. 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). 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. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. The basic product strategy in its marketing mix is its low-cost air services. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. 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. The company believes that customers are the key to their expansion along with their growth. Other than that, hes a fun loving person. The brand names and other brand information used in the SWOT Analysis section are properties of their respective companies. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. Furthermore. Step 3- Assess the Porter Five Forces in relation to the Airline industry and assess which forces are strong in Airline and which forces are weak. The increase in oil prices has critically impacted the operations of the organisation. 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. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). 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. Air Asia comprises of a capable and dedicated customer care team, which is committed to resolving the complaints by the customer as soon as possible. Some more of these improvement areas can be found through its SWOT analysis. Besides @flyairasia and 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). Continue reading more about the brand/company. Learn how your comment data is processed. Jet Star Airwaysare considered as the safest low cost carriers among the 10 safest carriers in the airline industry of Australia. Ease to switching. 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. Below are the top 3 competitors of Air Asia: 1. There are many services that are provided to the employees of the organisation, such as training and motivational lectures. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. The created segments consists of consumers who share similar interests, requirements and locations. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). Concentration of Buyers power in many hands. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. 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. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. Air Asia is a low-cost airline headquartered in Malaysia. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). But in 1993, Air Asia was established to finally connect Asia like no other airline company. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. Browse marketing analysis of more brands and companies similar to Air Asia. Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest The customers are able to book their tickets and gain promotional discounts through internet booking which eliminates the issue of queues for booking and additional assistance in choosing seats. About Air Asia 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. 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. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. 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. 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. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. Below are the Strengths in the SWOT Analysis of Air Asia : 1. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. The content on MBA Skool has been created for educational & academic purpose only. 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 adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. Points to consider while selecting a topic for dissertation help. Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. KLIA-Singapore is also served by four Singapore-based carriers Jetstar Asia, Tigerair, SilkAir and Singapore Airlines. Build a competitive intelligence sales and marketing strategy based on the data It is the largest airline company based on the concept of the Low-Cost Carrier (LCC) (Zhang et al., 2017). Today it is one of the most reputed Asia-based airline companies. AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. WebAnalysis for Cost Leadership Strategy and Core. Do you have a 2:1 degree or higher? 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. Relative insignificant influence of buyer to supplier. 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. They may compete in term of their route offering that Airasia does not fly. It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. Before we get started, lets get to know the company a little more. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. There is no product differentiation while the only different is the airlines packages offered. AirAsia has been a successful part of the airline industry for over a decade. 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. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. It has a fleet of over 70 aircrafts, which fly to over 120 destinations and operates over 400 flights daily from its hubs situated in Thailand, Malaysia and Indonesia (AirAsia, 2018). The company is constantly using innovative solutions to provide low-cost transportation. Supplier concentration in a few hands. The Essay Writing ExpertsUK Essay Experts. 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. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. 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 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. The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. Fixed Cost is high. Many airline companies have entered the airline industry and they have made the market very competitive. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. 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. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. He has been a guest speaker at prominent colleges in India including IIMs[Read full bio], Your email address will not be published. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. As AirAsia expanded its services, the company expanded its facilities, including travel AirAsia is headquartered in Malaysia and provides transportation services to its passengers along with cargo and courier services. 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. 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). Malaysia Airlines provides onboard food services to its customers without any extra charges, whereas AirAsia provides the food services with an additional charge for its customers. The competitions are depending on the services provided and the suitability of the flight time for the customer. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. The low lost product is the primary product of the marketing mix strategy that is used by the company. 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. 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. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). 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