Do essay writing needs professional writers? Build a competitive intelligence sales and marketing strategy based on the data 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. 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. Rising Labour Costs 3. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in AirAsia is one of Asias most successful low-cost carriers. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. Physical evidence encompasses the ways in which the company can maintain their position in the industry. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. They hence practice geographic segmentation by focusing their services primarily in Asia, Demographic segmentation- Being a low-cost airline, they cater to people in the low to medium income group, Psychographic segmentation- Their main customer is the cost-conscious traveler, AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines, JetStar is providing more payment options or gateways to its customers, AirAsia provides services to 130 destinations as compared to JetStar which provides services only to 80 destinations, Malaysia Airlines generates 113% of AirAsias revenue, Malaysia Airlines also has fewer employees, at 7,159 compared to AirAsias 20,000, AirAsia is the low-cost airline leader in the Asian market, The company has subsidiaries in Indonesia, Thailand, the Philippines, and Japan, It boasts a fleet of nearly 300 aircrafts, AirAsias positioning is steady and consistent in being a low-cost airline. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. 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. gained a smart rating of 54 whereas Malaysia Airlines has gained the rating of 85 which, signifies the contrast of both the airlines in terms of acceptance of the services and feedback by the customers (Holiday.My, 2018). 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 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: Below are the Strengths in the SWOT Analysis of Air Asia : 1. All work is written to order. 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 AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. Continue reading more about the brand/company. 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. It is an international air travel carrier that started its flights in Malaysia and expanded its base globally. 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. It employs an anchor pricing policy, which establishes a baseline for pricing all AirAsia-operated flights. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. Do check out our Free Digital Marketing Masterclass by Karan Shah. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. 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 opportunities for any brand can include areas of improvement to increase its business. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. The major reason is that the number and type of competitors remain the same for a long time,and this reduces the chance of an airline company at a lower level coming higher in the market.Different airline brands are known for various services, for instance, JetBlue is known for the quality of services and amenities and Air Asia is known for its low cost. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. 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. 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. 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. Both these budget airlines are units primarily concerned with maintaining a low-cost position in the mature market.. History of Garuda Airlines. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. Another strategy that the company will implement in the future is networking. 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. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. The market has confronted critical competition in the form of new competitors who have also introduced low-cost flights. The Threat of Substitution The international airline market has sufficient low-priced airline options available for passengers to travel. Start-up Cost is high. Ease to switching. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. Strengths. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. It allows its customers to choose the services they want without compromising on quality. Your email address will not be published. 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. Lets understand AirAsias competitors better with analysis. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. Air Asia PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. 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. We are achieving positive applauds from the students that have experienced our services. 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). Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. Your email address will not be published. This has raised the threat of substitution for Air Asia, as in any case of customer dissatisfaction or unavailability of service, it will be easy for the passengers to shift to some other airline company. They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. The major issue with maintaining low ticket price is the increasing competition in the airline industry. Some more of these improvement areas can be found through its SWOT analysis. WebAirAsia Bhd Fundamental Company Report Including Financial, SWOT, Competitors and Industry Analysis Enhanced SWOT Analysis (+ US$ 75.00) PESTEL Analysis (+ US$ 150.00) IFE, EFE, IE Matrices (+ US$ 125.00) Porter Five Forces Analysis (+ US$ 75.00) VRIO Analysis (+ US$ 175.00) Special Bundle, including all types of analyses (+ US$ The following are strengths and weaknesses of AirAsia: 1. 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. 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. They truly contribute their lifelong learning in allowing students to succeed in their academics. 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. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. Browse marketing analysis of more brands and companies similar to Air Asia. Similarity in product offering. Thank you for reading this case study. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. However, the company has employed more than20,000employees to manage its worldwide operations. Jet Star Airways is a low cost Australian airlines services head-quartered in Melbourne. 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. 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. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). In this strategy, the company uses activities such as inbound logistics, where all the aircrafts are of one type; hence, reducing the maintenance cost, scheduling cost, and cost of managing inventory. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. Sponsorship is also one of the great marketing tools. Fixed Cost is high. Some writers often extend the acronyms to include legal and environmental factors. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. In 2002, AirAsia became the first airline company in the region that allowed passengers with the facility to pay for their bookings by using credit card. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. 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. In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. 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. If you did, be sure to share, comment, and let us know! Tiger Airways. Below are the top 3 competitors of Air Asia: 1. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. 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. AirAsia is an experienced brand in the airline industry. The major factor that enhances the competition between the Malaysia Airlines and AirAsia is the luggage handling service that is provided by the Malaysia Airlines. 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). 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. Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. This increases the probability of people to avail of airline services frequently. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. 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. 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. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. The acronym refers to political, economic, social and technological factors. 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. In the context of this fact, the loyalty of the customers of Air Asia has been decreased because of the increasing competitors of Air Asia in the airlines, such as Jet Star and Tiger Airways. The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. 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). Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. 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 major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. Furthermore. 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. However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. This article has been researched & authored by the Content & Research Team. The company will increase the current IT facilities used in the aircrafts to enhance the facilities provided to the customers. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. Besides @flyairasia and Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. Supplier concentration in a few hands. WebThe Competitors analysis of AirAsia Flying Low Cost with High Hopes looks at the direct and indirect competitors within the industry that it operates in. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. Air Asia Competitor analysis In order to compete with AirAsia,. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. The new handles will reflect AirAsia's brand identity and values, and make it easier for customers to connect with the airline and the super app on social media. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. 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