They have been a major player in the low-fare airline industry and have connected over 88 countries together. It employs an anchor pricing policy, which establishes a baseline for pricing all AirAsia-operated flights. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. WebThe two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). Lets take a look at AirAsias marketing mix. In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. Similarity in product offering. Interested in learning more? In anchor pricing strategy, the company prices its services along with the tickets at a low price. The major issue with maintaining low ticket price is the increasing competition in the airline industry. 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. Such events and teams have got millions of fan following, when an airline sponsors a team or an event, then it allows the company to reach new customers. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. 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. 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. It seems as the destination and customer market share of AirAsia is only limited to the Asian countries. WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. 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 focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. AirAsia has won many awards over the years. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. As AirAsia expanded its services, the company expanded its facilities, including travel Ease to switching. Tiger Airways. As the rivalry is strong, Airasia may constant in price reduction to compete with them. 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. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. Home Samples Marketing Environment Analysis of Air Asia. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. The increase in oil prices has critically impacted the operations of the organisation. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). 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. 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. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. Specific analysis has been conducted in order to analyse the market environment for AirAsia. Student Life Saviour is a prominent name in providing assignment, essay and dissertation help services to students. Relative Price. The company is constantly using innovative solutions to provide low-cost transportation. In contrast to this, Jet Star Airways has more types of planes that are provided to its customers that includes A320, Bombardier Q300, A321 and Boeing 787 Dream Liner; whereas AirAsia offers only two types of planes to its customers, which are A330 and A320. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. 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). This has been possible due to the companys relentless communication through various marketing channels. AirAsia focuses on providing guests with comfort through competent facilities that meet industry standards, as well as regular flights and secure point-to-point connectivity. Do check. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. We hope you found what you were looking for. However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. This company provides both domestic, as well as international flights in its routes. AirAsias mainproducts and servicesare KL Syariah Index of Bursa Malaysia, low price Santan meal, and duty-free merchandise, drinks, food, and other menus if you buy on board. Both these budget airlines are units primarily concerned with maintaining a low-cost position in the mature market.. History of Garuda Airlines. Relative insignificant influence of buyer to supplier. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. Use Slintel to connect with top decision-makers at AirAsia. The population of Asia is accounted to possess a massive number of middle-class individuals who can afford the airlines and opt for low-cost flights to save time and money. As there are approximately 59 low cost airline operating in the industry,it is always easily for the customer to look for alternative. For example, they had a #responsibletraveller campaign on Instagram. 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. 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. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. Step 4 - Determine overall industry structure and test analysis of consistency. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. It was started in 1993, and the operations began in 1996. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. In order to build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. The organisation can be witnessed to confront critical competition from the competitors who are facilitating similar costs and additional services and privileges which act as a drawback for the organisation (Man and Justine, 2005). AirAsia is one of the largest low fare airline companies in Asia, which has been expanding its routes to different countries since 2001. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. Jetstar Airways 2. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. 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. Fixed Cost is high. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. Best regards from Kazakhstan.My name is Ainash. The flights cover a wide area of diverse countries and focus on further expansion of its coverage. Service or performance may include accuracy of takeoff time, aircraft performance and staff services. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. 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). Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). AirAsia is known for its low fares and no-frills policy. 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! No plagiarism, guaranteed! Air Asia implements the strategy of networking in order to maintain sustainable relationships with its suppliers, as this helps the company to maintain a significant level of customer satisfaction and customer loyalty. High Switching Cost. In Kuala Lumpur. Interested in learning more? 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. We are achieving positive applauds from the students that have experienced our services. AirAsia focuses on delivering accessible promotions, in which customers are aware of new product offers with minimal company intervention through simple tools such as emails. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. 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 should expand into more countries, increase the market, and target new customers. Air Asia is a low-cost airline headquartered in Malaysia. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. 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. Web- High margins compare to Airline industry's competitors - Even though Airasia is facing downward pressure on profitability, compare to competitors it is still racking in higher profit margins. Before we get started, lets get to know the company a little more. They have official handles on all major platforms but for the purposes of this segment, we shall take a look at the main 3, which are Instagram, Twitter, and Facebook. The basic product strategy in its marketing mix is its low-cost air services. AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. 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). AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. 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. 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. Other than that, hes a fun loving person. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. 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. Another important strategy that Air Asia will consider enhancing is improving Information Technology (IT) services in the company, as well as in the aeroplanes. The Threat of Substitution The international airline market has sufficient low-priced airline options available for passengers to travel. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. They may compete in term of their route offering that Airasia does not fly. 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. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. Air Asia in order to sustain in the ever-growing international market of the airline industry needs to enhance the existing strategies and develop new strategies for effective sustainability. AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines As per the results of the survey, AirAsia has. 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). Disclaimer: The reference paper provided by Student Life Saviour should be used as a model paper, and are not intended to be submitted to the universities. 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. They have a vast network of operations around the world, flying domestically and internationally. That was AirAsias 4Ps mix, detailing each strategy and its purpose. The price will be cheaper if you book earlier. 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. 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. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. 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. WebAnalysis for Cost Leadership Strategy and Core. 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 is due to Airbus is a UK based aviation company and their customer may come from around the world. Well established LCC operating out of South East Asia, 3. 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 is an international air travel carrier that started its flights in Malaysia and expanded its base globally. Today, well discuss the swot analysis of AirAsia. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. Below are the Strengths in the SWOT Analysis of Air Asia : 1. 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). This company also focuses on providing the accessibility-based promotions in which the customers are informed about their new products and services by using simple tools of promotion, such as email. 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). Some factors like increased competitor activity, changing government policies, alternate products or services etc. Learn how your comment data is processed. They may compete in term of their route offering that Airasia does not fly. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. The company confronts various complaints and issues from the customers who are numerous to resolve instantly and result in customer dissatisfaction. AirAsia is an experienced brand in the airline industry. The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. Thailand s market currently has just two local LCCs, Thai AirAsia and Nok Air. It allows its customers to choose the services they want without compromising on quality. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. 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. Increasing globalisation has led to an increase in the lifestyle and financial condition of people. Do essay writing needs professional writers? AirAsia is a global airline with operations in more than 160 destinations in 25 countries. Low Cost Model: Low cost operations and fixed costs . Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. 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.
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