AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. Strengths. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. 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. This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). Do check out our Free Digital Marketing Masterclass by Karan Shah. There are several companies associated with AirAsia including AirAsia X, Tun Hotel, Tune Monkey, AirAsia Berhad, Thai AirAsia Co. Ltd., AirAsia Japan Co., Ltd., PT Indonesia AirAsia (India) Limited. This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. Hi, I am an MBA and the CEO of Marketing91. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. Lets see how they compare amongst a few key indicators. 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 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 worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. The created segments consists of consumers who share similar interests, requirements and locations. They may force to continue their operation even they are facing losses in order to cope with fixed costs. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). 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. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). They truly contribute their lifelong learning in allowing students to succeed in their academics. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. WebFive steps to successful analysis of. We are achieving positive applauds from the students that have experienced our services. Thank you for reading this case study. They may compete in term of their route offering that Airasia does not fly. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. 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. 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. 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. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). This comes with a lot of competition. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. Looking for a flexible role? From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. Liked our work? Its routes include both domestic and international flights. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. Marketing mix 7 Ps and SWOT analysis can improve the brand value of AirAsia and identify the strengths and weaknesses of AirAsia along with determining the future opportunities. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. This model is widely implemented by various organisations for the development of their strategies in the industry. Air India, Emirates, and many other Asian airlines have also started following the low-cost carrier strategy to attract market share. Below are the Strengths in the SWOT Analysis of Air Asia : 1. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. For example, they had a #responsibletraveller campaign on Instagram. Air Asia is known as one of the most low-cost airlines in the airline industry. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. AirAsia participates in a lot of price-based promotions. Ease to switching. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. The dynamic oil prices and service costs result into criticality for maintaining the low-cost flights as the organisation focuses on facilitating the most affordable costs to its customers (Daft, Murphy and Willmott, 2010). Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. Brands, such as Jet Star Airways and Tiger Airways, are sustaining in the competition as they also provide air transportation at cheap costs to people along with enhanced in-flight services and varied options for passengers.This directly affects the customer strength of Air Asia, andthese companiespose a threat to the company. The largest airline in Malaysia the business is known to be highly employee centric. 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. 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. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. 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. Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. The company makes use of innovative solutions in order to provide low-cost aviation. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. Rise of Other LCCs in Market. The airline brand should exploit these circumstances. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). Jetstar Airways 2. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. 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. A recipient of numerous awards Air Asia has been consecutively designated as the leading low-cost carrier in the Asian region. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. No plagiarism, guaranteed! The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. 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. 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). Use Slintel to connect with top decision-makers at AirAsia. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. Physical evidence encompasses the ways in which the company can maintain their position in the industry. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. 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). This is due to Airbus is a UK based aviation company and their customer may come from around the world. However, the company has employed more than20,000employees to manage its worldwide operations. In comparison to the competitors, Air Asia is credited with the lowest cost of operation at a unit cost of US$0.023 per available seat kilometer (ASK) and a passenger breakeven load factor of 52%. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. Do essay writing needs professional writers? Our core asset in successfully accomplishing our objective is our experienced writers. AirAsia is one of Asias most successful low-cost carriers. 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. Browse marketing analysis of more brands and companies similar to 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. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. Supplier concentration in a few hands. The content on MBA Skool has been created for educational & academic purpose only. 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! It allows its customers to choose the services they want without compromising on quality. Service or performance may include accuracy of takeoff time, aircraft performance and staff 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. We hope you found what you were looking for. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. 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 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. 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. AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. 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). (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). Let us now get into its marketing strategy. Today, well discuss the swot analysis of AirAsia. Customers have access to market information. Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. The following are strengths and weaknesses of AirAsia: 1. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. The major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. It must have a good relation with hotels and tourism companies around Asia. After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. 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 company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. Continue reading more about the brand/company. The Essay Writing ExpertsUK Essay Experts. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Similarity of product. Strong Promoter 2. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. Lets take a look at AirAsias marketing mix. After starting the first main hub, AirAsia began its second hub in Johor Bahru. The competitions advantage is the centre of a companys performance to face a direct competition. 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. Learn how your comment data is processed. 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 increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. The verdict overturned the Malaysian Competition Commission (MyCC) ruling that AirAsia and Malaysia Airlines (MAS) had colluded to share the market. Similarity in product offering. 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. This increases the probability of people to avail of airline services frequently. The increasing cost, competitors, and limited international destinations are some of the main challenges. But in 1993, Air Asia was established to finally connect Asia like no other airline company. Free resources to assist you with your university studies! Relative Price. Sponsorship is also one of the great marketing tools. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. Specific analysis has been conducted in order to analyse the market environment for AirAsia. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. 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 biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. This involves a detailed analysis of their actions and how these would affect the future strategies of AirAsia Flying Low Cost with High Hopes. Performance of rivalry. Required fields are marked *. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. The increase in oil prices has critically impacted the operations of the organisation. Air Asia has established itself as a strong competitor in the airline industry. Basic things to know before seeking help in assignment. 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. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. Air Asia is a low-cost airline headquartered in Malaysia. According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. Interested in learning more? It mainly constitutes of two major subsidiary airlines that includes MASwings and Firefly. The basic product strategy in its marketing mix is its low-cost air services. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. Known as one of Asias most successful low-cost carriers started following the flights! 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