$35.80 for a 2-page paper. It also gives the option of ticketless service as a low cost alternative to its customers. Maintaining the low pricing strategy and reducing the total travel time. These influential factors may be identified by analyzing the Political, Economic, Social, Technological, Environmental and Legal aspects of the macro environment (David, 2009). 3 Conclusion and Recommendations reached from SWOT analysis. The improvisation in this first hand interfaces with the consumer would result in enhance customer relationship management. “World’s Most Dangerous Airlines Named: AirAsia Included on List but Malaysia Airlines Scores above Average for Safety.” Daily Mail Online, Associated Newspapers, 22 Jan. 2016, http://www.dailymail.co.uk/travel/travel_news/article-2908531/Ranking-world-s-dangerous-airlines-includes-troubled-AirAsia-Malaysia-Airlines-scores-highly-safety.html. An organization like Air Asia Berhad may identify its inherent capabilities and strengths and try to bank upon them for formulating business strategies. The airline has one of the biggest fleets of Boeing aircraft globally, with multiple models of the aircraft, which helps with the effectiveness of their services. The technology has further intensified the price wars between the Aviation Industry players as the customers can comfortably seek best price deals online through leading e-ticketing websites. AirAsia is a low-cost airline, so they have to manage their finance well to make profit while providing their service. Change ), You are commenting using your Twitter account. The market Development strategy is about offering the existing products and service offering in new unexplored markets. With the use of blockchain for recordkeeping grow- Their prices are 40-60% cheaper than full service carrier (FSC) (“Flight Profile.”). Several of the recommendations listed may also be considered to make brand Air Asia Berhad progressive and well ahead of competition. The Threat of the new entrants for the brand Air Asia Berhad is currently assessed as very low. Air Asia may implement this strategy by modifying its service offering by adapting the latest technology in its service deliverables to its customers. There were several unfortunate accidents, including: 1) a plane slided sideways on a runway in Borneo; 2) a plane crashed into the Java Sea in 2014, killing all 162 on board; 3) entered the wrong longitude into a navigation system, causing the plane to fly in the wrong direction (“Passengers Describe Terror Aboard Indonesia AirAsia Flight.”). Fernandes hopes to achieve AirAsia … TaskRabbit – another dangerous job beside pizza delivery? It also participates in several social events and brand promotion activities. PDF | Facebook may be an excellent Social Media platform that may be used to enhance the organizational communication. “World’s Most Dangerous Airlines Named: AirAsia Included on List but Malaysia Airlines Scores above Average for Safety.” Daily Mail Online, Associated Newspapers, 22 Jan. 2016. It has managed to hold a leadership position in the low cost Airlines industry in Asia. AirAsia besides late introduced GO Holiday, the air hose ‘s online programme where invitees can book vacation bundles online in existent clip. Change ). Air Asia is a low-cost airline headquartered in Malaysia. This is the key persistent threat in a low cost Aviation Industry in Asia. This is partly contributed by the diverse background of the executive management teams which consists of industry experts and ex-top government officials. The competitive pricing with minimal travel time would be a competition cutter. The organization Air Asia would also require using the strategic capabilities identified in the SWOT analysis for the consumer engagement purposes. Blockchain in Recordkeeping: SWOT Analysis. AirAsia turnaround time is 25 minutes, so their utilization per aircraft is 12 hours per day, compared to 8 hours per day to full service carriers. This also involves offering the existing products to new user segments or target markets across vivid geographic regions. As of 2020, Air Asia is one of the leading brands in the airlines sector. Having the increase in fuel prices and the need to drop prices to compete might cause AirAsia to lose profit, considering other companies might surpass AirAsia due to its lack of safety. Introducing loyalty programs may increase the brand loyal customers. AirAsia Price/Pricing Strategy: Following is the distribution strategy of AirAsia: AirAsia stands for low pricing and a no frills policy. The Legal Environment for the Aviation Industry is getting tougher and challenging in the recent years. These measures to minimize the non-renewable fuel resources would not only benefit the respective Airlines in terms of cost control, but it would also help in reducing the carbon foot prints on the planet. It is believed there will be an increase of 160 million more in the next 5 years (Kharas, Homi.). The threat of the substitutes for the brand Air Asia Berhad within the Asian countries is high. This will cause customers switching from AirAsia to a carrier that provides safety and reflects the true price of their services. thanks for sharing this information.have shared this link with others keep posting such information.. Overall I believe the strengths of the organization are effective in expanding the business and market share as its low cost is its main selling point and it has a clear understanding in what the customers want: to get from one destination to another within budget. 5. AirAsia Bhd reported a bumper 26% increase in net profit to USD58 million in the typically slow first quarter ended 31-Mar-09 – the carrier’s best quarterly result since the final three months of 2007. The Increasing regional urbanization, increasing medical tourism destinations and increasing educational institutions across the Asian continent is expected to create new travel destinations for Air Asia Berhad. AirAsia ranks top one as the world’s cheapest budget airline and is famed for its pricing strategy. The number of lawsuits from the stakeholders against the Airlines functional in Asia has increased. 3. “International Tourism, Number of Arrivals.” World Bank, data.worldbank.org/indicator/ST.INT.ARVL. The brand still has a lot of scope for harnessing the power of the social media to attract more young consumers towards the brand. Lastly the brand needs to stay updated on the technological advancements for achieving operational efficiency in the business. , a Malaysian low-cost airline that has been operating since 18th November 1996, and currently offers flight to over 165 destinations in 22 countries (“AirAsia Annual Report.”). Strengths An analysis of the External Environment would be done so as to facilitate a direct comparison between the generic elements where AirAsia has been founded in. Low costs: AirAsia X is the king of low costs AirAsia X has the lowest unit costs in the industry.It is the only airline in the world with CASK below USD4 cents. 13. This strategy explains offering innovative, modified and new products in the existing markets in which an organization operates. Air Asia also engages in several public relation management programs for brand building and customer engagement purposes. SWOT Analysis One strength of Southwest Airlines is the strong fleet base, which enhances the company ability to deliver services effectively. STRATEGIC FACTORS Four Important Internal Factors: Analysis. If these services are included, the plane ticket to be more expensive than full service carrier. In order for global interactions to come true, it soars the demand for airlines. The brand Air Asia Berhad believes in no frills and thus provides bare minimal facilities on board to the customers. Assignment Samples & Case Study Review Sample: The biggest assignment sample database – Chat with MyAssignmentHelp.com Experts to get your own custom made paper! The engaging relationship marketing activities also fulfilled this strategy. Rail and Road Transport are attractive substitutes available for domestic Air travel in the Asian countries. The mishaps such as the recent disappearance of the Malayasian Airlines Fight also affect the consumer sentiments badly, affecting the overall demand for the Aviation Services. AirAsia SWOT Analysis The organization I am interested in is AirAsia , a Malaysian low-cost airline that has been operating since 18th November 1996, and currently offers flight to over 165 destinations in 22 countries (“AirAsia Annual Report.”). ASDA faces a number of competitors in the UK. This may result in increased brand loyalty among the customers. AirAsia Berhad: Strategic analysis of a leading low cost carrier in the Asian region Yasmin Yashodha Taylor’s University Lakeside Campus, No. 1. this included porters, pest, swot, opportunity matrix, and races model. PESTEL Analysis is a tool that helps understand the impact of the external environmental influences on the business operations of an organization. Too many options available for the consumers in the Airline Industry have resulted in this change. The organization’s low-cost attribute has propelled the brand to gain high popularity among the masses. This analysis emerges a trend that in this era of boom in IT sector, the appropriate use of IT is a must for any kind of business. The SWOT analysis of Air Asia is presented below: Strengths: Weaknesses: 1. The Aviation industry still has lot of scope to control the noise pollution and carbon emission issues for the benefit of the environment. The Brand in its slogan has rightly pointed out that anyone can fly. The e-service facilities like the user interface screen or the speed of the website facilitating the Air ticket booking are the minute factors that result in customer satisfaction while availing the booking facilities. The organization managed to improve its service levels and product quality still offering competitive rates in the existing market. In terms of physical resources, they charge every service during their flight, including luggage allowance, food, drinks, blankets, and seat arrangement. Kharas, Homi. Evaluation on the strategic choices in relation to the competitor’s strategies (Using Porter’s Five Forces Model and Opportunity matrix), Porter’s Five Forces Model helps an organization to evaluate the surrounding competitive environment and assess the competitor’s capabilities. The domestic Air travel still becomes a secondary option for many of the travelers belonging to lower income groups in these countries. ... 2017). View all posts by elizabethshingbusinessonline. An organization opting for a diversification strategy has to move out of its existing products and market segments in to new unexplored areas. Convert – This step describes the conversion of a purchase decision to sales. The Air Asia Berhad Airline is thus recommended to continue with its competitive pricing strategy. The AirAsia Group is based in Malaysia, and AirAsia Malaysia remains the biggest revenue contributor. The student is encouraged to critically analyse and offer a recommendation on its solution. AirAsia Berhad is the first airline company that offered a low cost flight in Asian market. This had a positive impact on the business model of AirAsia and surely with the expansion of IT sector the positive impact obviously would be there. 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005. participated); a SWOT (Strengths, Weaknesses, Opportunities and Threats) exercise (~45 individuals participated); an online survey (120 respondents); and a review of select secondary information (see Appendix 1). The economic strength of the organization is its prices strategy. (“Passengers Describe Terror Aboard Indonesia AirAsia Flight.”)” AirAsia has poorly-trained staff that does not know how to handle irregular situations, and cannot provide safety ensurance to the customers as other competitors with professional staff training do. Hire a subject expert to help you with AirAsia Berhad: SWOT analysis. According to this Matrix there are four possible combinations that provide the organizations with possible progressive opportunities. Johnson, G., Scholes, K., & Whittington, R., 2008. Overall I believe the strengths of the organization are effective in expanding the business and market share as its low cost is its main selling point and it has a clear understanding in what the customers want: to get from one destination to another within budget. This report provides with an extensive strategic analysis of the leading low cost Airline in the Asian Region, which is Air Asia Berhad. It has a high revenue of 6.85 million RM (~1 billion USD), and carried over 56 million passengers in 2016 (“AirAsia Annual Report.”). The organization may also benefit operationally with the combined resources and knowledge. For example, the average FSC cost is $516, but after adding meals, luggage, and seat arrangement, the cost for AirAsia is $588, going to the same destinations at the same period. Situational Analysis for Aviation Industry in general (Using PESTEL Analysis) 3. Also the regulators across the ASEAN have imposed minimum restrictions on migration licenses and other legal formalities. The strategic tools of Opportunity Matrix and Porter’s Five Forces Model have also been used for evaluation. PESTLE. The process of booking Air Asia tickets is kept very simple and user friendly by the organization. It engages in an anchor pricing strategy in its marketing mix, which creates a base for pricing all operations carried under the AirAsia umbrella. Customers’ perspective on low cost airline on poor safety maintenance that may affect the ticket sales. 1 Jalan Taylor's, 47500 Subang Jaya, Selangor Darul Ehsan, Malaysia. The Advancement in the technology has resulted in most of the Air ticket reservations to be booked online. Strategic capabilities of Air Asia Berhad (Using SWOT Analysis and Races Model) 6. The analysis presents the situational analysis of the Aviation Industry especially in the Asian region with the help of PEST analysis tool. Hire verified expert. In addition, they will be able to increase capacity on flights and maximize profits per flight. Recently, there was a panic flight accident from Australia to Indonesia, where a passenger described, “The panic was escalated because of the behavior of staff who were screaming, looked tearful and shocked. The cost effectiveness and the affordable pricing structure offered by the Air Asia Berhad have attracted several customers to the brand. This SWOT analysis for Romania will serve as a basis for the industrial policy recommendations and the trade union action plans, envisaged in the project. AirAsia is the Malaysian low cost air carrier that charges the lowest fares per kilometer in the world (Case Study). Apart from that Air tickets are also offered across the counter across all the leading Asian Airports. The Ansoff Opportunity Matrix is another Strategic Management tool that describes and predicts an organization’s growth opportunities with the existing as well as new products and Markets (Capodagli & Jackson, 2007). When demand is high, the revenues will increase for the organization. SWOT analysis for AirAsia The organization Air Asia has less choice with manufacturers and Aircraft suppliers. Let us apply the PESTEL framework for low cost Aviation Industry, especially operating across the Asian region-. It persuades its website visitors to book tickets for their journey and travel plans. 2. “The Unprecedented Expansion of the Global Middle Class.” Brookings, Brookings, 5 May 2017, http://www.brookings.edu/research/the-unprecedented-expansion-of-the-global-middle-class-2/. Analysis and Research PESTEL analysis of Air Asia will help to develop a significant understanding of the impact of Market Liberalization in the Asia-Pacific on the growth and development of Air Asia. As a result, the strategic analysis will involve the PESTLE analysis, Porter’s five forces, value chain analysis and the SWOT analysis (Porter, 2012). By locating AirAsia offices in many Asian countries, they can fly from different parts of the world instead of Malaysia only, and thus expand the business to more stakeholders, increasing their net revenue. According to Daily Mail, AirAsia airline ranks 2 or 3 stars out of 7 for safety. Munusamy Jayaraman, Chelliah Shankar, Pandian Sivamurugan, 2011. This strategy is helpful in maintain the innovator brand image in the market. The adaptation to the latest technology equipments and communication facilities would also benefit the Airline business in terms of improved operational efficiency. This strategy explains organization penetrating exsisting products in existing markets and achieves increased market share. Information on Air fares is instantly available to the Target Audience at free of cost. A political threat for AirAsia is the continued increase in fuel prices. These four basic growth opportunities are Market penetration, Product Development, Market Development and Diversification. Let us discuss the five forces of the Porter’s Model in relation to Brand Air Asia Berhad-. Air Asia has been consecutively designated as the leading low-cost carrier in the Asian region. This is expected to trigger increase in regional travel destinations, attracting more business for the Aviation players. 4. Air Asia Berhad supports the no-frills concept in the Aviation services and has been popularly voted as the world’s best low cost service Airline in the year 2009 and 2010. sity of British Columbia’s unpublished 2017 “Records in the Chain” project report, Estonia is one of many jurisdictions that use blockchain to securely keep med-ical records and a host of other types of government records. The backward integration, forward integration and horizontal integration strategy of the Air Asia Berhad may also result in achieving increased economies of scale for its business operations. this included porters, pest, swot, opportunity matrix, and races model, 1. Our reference papers serve as model papers for students and are not to be submitted as it is. The regulations regarding the safety issues of the passengers and the related legal scrutiny have become stricter. Air Asia Berhad is a Malaysia based low cost airline that operates both domestic and international Aviation services. the 19 – 20 of January 20174. analyse the case study. This is clearly known as it has very strong links with the governements and airline industry leaders. Air Asia’s backward, forward and horizontal integration is an attempt for diversification for increased growth of the organization. The low pricing strategy maintained by the brand has gained increased visibility for its service offering even in the middle and lower income group target segment. Reach – Air Asia offers multiple distribution channels and innovative point of contacts for reaching its customers. Download. This is aided by AirAsia X operating longer average stage lengths (about 5,000km) than other LCCs. Download Full PDF Package. 3. There is no set format for this assignment; the student must, however, show creative and strategic thinking in addressing the issue. This paper will look at the award winning Malaysian low cost carrier- AirAsia’s by analysing its strengths and weaknesses using strategic tools such as PESTEL analysis, SWOT analysis, Porter’s five forces Model. SWOT Analysis for Air Asia. Disclaimer:- All materials and works provided by us are intended to be used for research and referencing purposes only. Order the complete Air Asia SWOT & PESTLE report or view the free sample complete report on our site now! Need help with Air Asia SWOT & PESTLE Analysis? The Asean super app for booking flights, hotels, activities, food, unlimited deals and so much more! The following is the application of the strategic tool of SWOT Analysis for brand Air Asia Berhad-. This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. Act – Air Asia also manages to reach to its target Audiences through its interactive website and leading social media platforms. The Aviation Industry has to necessarily invest in the latest technology equipments for providing better flying experience to its consumers and also to enhance the safety arrangements of the customers on board. Change ), You are commenting using your Facebook account. This is the most distinct and unusual strategy amongst all the three strategies discussed above. Maintaining a balanced communication with the target audiences helps in strengthening the brand image of an organization. The economic weakness is its lack of investments in human and physical resources, which causes the ethical weakness of frequent accidents. Air Asia Berhad operates in an extremely regulated and political environment of the ASEAN region. Table of Contents. And than what is AirAsia SWOT analysis and how AirAsia solves the current issues in their company. Hence, with its distribution network and cheap price, more globalized individuals are willing to travel around the world, and more companies are willing to travel to conduct transactions overseas within budget. This reflects a positive social analysis for the Aviation Industry in Asia. 4. If the government were to continue to increase fuel price, it can destabilize the business model, causing this airline to either increase their prices, or go bankrupt. Let us associate the RACE Model with Brand Air Asia Berhad and list down the viable four steps for maintaining consumer engagement throughout the lifespan of the brand. Since there are also many more low cost carriers joining the market, such as Emirates, Jetstar, and Peach, competition occurs and those with the lowest price attracts the customers. “Crude Oil.” Nasdaq, 7 Nov. 2017, http://www.nasdaq.com/markets/crude-oil.aspx. In Kuala Lumpur. The continuous government support and minimum migration restrictions are also a key strength that has supported the operational functioning of the brand. The political establishment of the Aviation Industry across the Asian continent is governed by strict rules and regulations which favor the passenger safety at the priority level. The development of new urban centers and the increased demand for tourism in the Asian countries are expected to bring in more business for Air Asia Berhad. 3.1 Why AirAsia stressed to be low cost carrier in airline industry Datuk Tony Fernandez as CEO of AirAsia Berhad said his philosophy is very clear: before a business can grow, it needs to have its costs under control. Counterparts for the educational and medical Tourism, www.airasia.com/my/en/about-us/ir-what-is-lcc.page by the brand and high-service business... 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