The primary method for achieving differentiation employed by AirAsia is providing the lowest possible prices. on the value for money, striving to become a service leader instead of a price leader. A senior executive from, Maybank, major Malaysian financial conglomerate, “AirAsia has been cutting flights to. With the idea of low cost flight, AirAsia wins the market of both medium and low income customers. How did AirAsia become one of the leading Asia’s airlines? Exploit Loophole 609 to Boost Your Credit Score and Remove All Negative Items From Your Credit Report, Trillion Dollar Coach: The Leadership Playbook of Silicon Valley's Bill Campbell, 75% found this document useful, Mark this document as useful, 25% found this document not useful, Mark this document as not useful, Save Competitive Advantage of Air Asia For Later. From the deregulation in the 1970’s till the early 2000’s the transformation of the low cost concept in the United States can only be described as a series of innovations, proliferations and consolidations where many other low cost airlines (e.g. Further expand AirAsiaX’s operations. AirAsia gain from the first mover advantage which allows it to establish itself before competition perceive further in this low cost segment, apart from competition that already exists across segments (low cost vs full service carriers). @nethacker. There are approximately 21 direct competitors of AirAsia; LCC with low fares and no frills operated in Asia. Big Nate: What's a Little Noogie Between Friends? (2) Rivalry among existing firms 1. While AirAsia still reaps the benefits of first mover advantage in several of its markets and continues to outperform nearly all of its peers, competition is intensifying. A cost leadership strategy of Air Asia remains viable despite the changing external environment. Thus, it becomes a threat to Air Asia. Marketing strategy: Comparatively low … AirAsia faces stiff competition by trying to minimize their operation costs. Businessdictionary.com defines competitive advantage as a superiority gained by an organisation when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. DOCX, PDF, TXT or read online from Scribd, Good to Great: Why Some Companies Make the Leap...And Others Don't. READ: AirAsia Takes the A330neo Downunder And partner low cost airilne AirAsia X is looking to boost its premium product in a move designed to differentiate it from its low-cost competition and reposition its brand. In the meantime, AirAsia has broadened its existence by winning over customers from state-. Tony, Fernandes stated that AirAsia can compete with another airplane industries if they are able to, reduce cost efficiently.Most of the profit crisis was due to extra fuel costs and price wars, among budget carries. Yet, that does not mean it should not expand its business further, both short and long haul. The AirAsia app hopes to differentiate itself by leveraging the data it has collected from millions of passengers, but also stress its cross-country appeal for cross-border travellers in Asean. It can captures the interest of audiences because of the impact and reach on the, growing and large number of travelers or consumers worldwide. This preview shows page 15 - 17 out of 32 pages. The resources and capabilities own by AirAsia are homogenous in the market however aspect such as work culture and innovative routes differs it from the competitors. Course Hero is not sponsored or endorsed by any college or university. AirAsia.com on Friday added the flights of other carriers through a partnership with travel tech company Kiwi.com. Thus, it becomes a threat to Air Asia. The facts are that AirAsia has re-written the rule book for airlines in Asia and beyond and today AirAsia has 90 aircraft flying to 75 destinations, while AirAsia X has 25 aircraft flying to 22 destinations. Product differentiation is a marketing management strategy that aims to distinguish or differentiate a company’s products or services from the alternatives offered by competitors. 43 How does the company face competition AirAsia is considered to be a leading, 16 out of 17 people found this document helpful. AirAsia’s main competitors are Firefly, Tiger Airways and Jetstar Asia. There are few low cost carriers such as Firefly, Tiger Airway and etc which makes their services provided weak differentiation. Type of business. 2. Although competition and rivalry amongst budget airlines is high, and it is difficult to differentiate from other providers due to the nature of the industry and product, it still has a first mover advantage which makes cost-leadership remain viable. AirAsia uses E-commerce IT. However, AirAsia had some advantages over its competitors by the advantage of experience and its brand enjoyed good recognition. learning from other competitors’ approach (e.g. What distinctive resources . installing kiosks for fast check-in).   Terms. In applying the RBV concept, AirAsia has a competitive parity based on its valuable and not rare resources and capabilities. CRM initiative development – to differentiate from other competitors, AirAsia should not adopt the “fast follower” approach to CRM initiative development, i.e. Even though AirAsiaX faced already established competition when entering the long-haul market it successfully gained market share by utilizing the LCC model. As Tan Sri Tony Fernandes, CEO of airasia group always says “Our greatest asset is our people.” Operation effectiveness and outstanding efficiency are two main characteristics of low cost businesses including AirAsia. At the same time consumers appear to be … Moreover, AirAsia is not the only one who provides airline service. Are you wondering about how to differentiate your business from competitors? "If you find your company is not in first place in comparison to your competitors, a method of differentiation is to focus on one aspect of your business product/feature and make it the best in your space. These can come with complex and changing rules which affect how much miles and points are worth. What Is Airasia Competitive Advantage. The different pricesoffered between airlinesoperating in low cost carries industry, influence decision making of customers. Words: 1973 - Pages: 8 ... (cost analysis and differentiation) 1.0 Porter’s … DECEMBER 3 — One contributing factor for Malaysia Airlines Berhad’s (MAB) struggles was competition from the low-cost-carrier (LCC) AirAsia group. How did AirAsia become one of the leading Asia’s airlines? AirAsia builds and sustains its competitive advantage by providing services at a price that is simply lower than competitors’ price. Resources and capabilities owned by AirAsia are homogenous in the market but aspect such as work culture and innovative routes make it difference from the competitors. In this case, the rivalry among existing competitors is quite high to Air Asia. The fact that it has … Airline industry has become, the highest opportunity for AirAsia based on this statement. Everything which causes inefficiencies are eliminated and reduced. on the value for money, striving to become a service leader instead of a price leader. The changes includesreplacement of, airline’s fleet with more fuel-efficient aircraft, automatic check-in procedures and reduce, overhead expenses. With competitive pricing, the airline will then be able to successfully differentiate themselves from its competitors and attract customers who are looking for cheaper and value alternatives. Moreover, AirAsia is not the only one who provides airline service. AirAsia’s remarkable track record of success over its first 12 years has come at a price –­ more competition as others look to duplicate the group’s formula. Try our expert-verified textbook solutions with step-by-step explanations. The following sections describe recommended strategies, along with reasoning and expected results, for AirAsia to move forward with. Knowing the said changes, AirAsia applied the adaptation process (Hanan & Freeman, 1984) by expanding its operation to long haul services to various destinations. Anti-cyclical marketing (to keep demand stable) Brand building through sponsoring (Williams Formula 1, soccer teams) Supporting detail 1: Malaysia Airline is a Malaysia-based company service whereas Airasia is a Thai-based company that engaged in air transportation and their related services. For example, unless the Malaysian government makes an effort to minimise crime, travellers may choose to visit other destinations. The growing number of travelers, worldwide can be a delightful opportunity for AirAsia to run their operation in order to, compete and survive from competition. AirAsia’s remarkable track record of success over its first 12 years has come at a price –­ more competition as others look to duplicate the group’s formula.While AirAsia still reaps the benefits of first mover advantage in several of its markets and continues to outperform nearly all of its peers, competition is intensifying.. It includes actual physical and perceived differences, of which the latter can be acquired through advertising. Hence, AirAsia have to come up with new strategies in order to stand out from its competitors. Given that the pandemic has hit both companies badly, the future of Malaysia’s aviation connectivity may be at stake and the current market calls for an alternative to the competition, such as a strategic merger between the traditional rivals. Find answers and explanations to over 1.2 million textbook exercises. Thus, AirAsia needs to develop strategies and create. Marketing strategy: Comparatively low marketing efforts . You’ve got to stand out to survive and thrive in business. Barely competition within short-haul, low-cost segment . 4.3.2 Cost Management AirAsia faces stiff competition by trying to minimize their operation costs. The second step is to market the focused product/feature explaining how it is better than your competition." installing kiosks for fast check-in). This can be a justification on why AirAsia had been rewarded as the best for so many years, as there aren't many competitors in the market to compete compared to other industries.From the firm's analysis using the business model framework, the value offered to the customers serve as AirAsia's strategy to win customer's loyalty. CRM initiative development – to differentiate from other competitors, AirAsia should not adopt the “fast follower” approach to CRM initiative development, i.e.   Privacy The company stands out from the rest of Asian airlines by offering the most attractive fares. Polar Bear, Polar Bear, What Do You Hear? AirAsia mostly owned by people who has the power in the countries that make the establishment and operation easier. This may affect AirAsia’s profitability because, competition among this industries is very tough. new market, at the same time able to grab greater opportunities in the tough competition. The Malaysian market, the group’s original and by … installing kiosks for fast check-in). Barely competition within short-haul, low-cost segment . AirAsia provide the services at very low cost than its competitors and it has competitive advantage over its competitors. The AirAsia Group serves 165 destinations across 25 countries. AirAsia builds and sustains its competitive advantage by providing services at a price that is simply lower than competitors’ price. One hedge traditional airlines have over their low-cost competitors is the frequent flier program. AirAsia has made a name for itself as the world’s lowest-cost airline and should keep excelling at just that. Topic Sentence: Both Airasia and Malaysia Airlines engaged in trading and services industry. learning from other competitors’ approach (e.g. There are, many competitors going against AirAsia Company that offers similar services such as Firefly, Airline, Berjaya Airline and Malindo Airline. AirAsia pricing strategy is to offer the lowest, possible fare compared to their competitor in order to maintain current market and tap into. Check out these powerful ways to differentiate your business from competitors and win…It’s getting harder and harder to stand out today. (these numbers exclude the JV partners). Operation effectiveness and outstanding efficiency are two main characteristics of low cost businesses including AirAsia. University of Kuala Lumpur • ACCOUNTING EAB 41403, University of the People • BUSINESS 5111, Northern University of Malaysia • BPMM 1013, Northern University of Malaysia • OYAGSB OEEM6013, Open University Malaysia • BUSINESS BBPM2203, University of Malaysia Pahang • ELECTRONIC DEE2931, Asia University, Taichung • CASE STUDY INTERNATIO, Copyright © 2021. While for AirAsia, price differentiation strategy is utilised whereby AirAsia is able to provide affordable price for budget flight. CRM initiative development – to differentiate from other competitors, AirAsia should not adopt the “fast follower” approach to CRM initiative development, i.e. Course Hero, Inc. Improve Upon … Stanley Meytin True Film Production. Thus, AirAsia need to roll out strategies to, compete with competitors in the same industry at the same time improve performance and, According to Daniel Chan (2000), the airline industry is fascinating and a unique, industry. In this case, the rivalry among existing competitors is quite high to Air Asia. learning from other competitors’ approach (e.g. installing kiosks for fast check-in). In today’s continuously changing business environment, constantly affected by unpredictable external factors, it is the human assets that can differentiate a company from its competition. Product differentiation may take the form of features, performance, efficacy (or the ability of the product to do what it is purported to do), meeting specifications, or a number of other criteria. CRM initiative development – to differentiate from other competitors, AirAsia should not adopt the “fast follower” approach to CRM initiative development, i.e. The weakening of Indonesian rupiah and currencies in other countries, where AirAsia to made fuel procurement become more expensive. The central objective is to achieve bigger cost advantage than the rivals by continuously searching areas for cost reduction along with its value chain. AirAsia applies E-commerce in their business and maximized IT technology in order, to face competition. Both emphasizing on their own core competencies and … IntroductionIncreasing liberalization of the regulatory environment inwhich regional and global airlines compete has createdchallenges for major carriers as well as opportunities forcarriers that are able to deliver high-quality services at thelowest possible price.As a result, low-cost airlines are an increasingly commonsight in airports around the world where no-frill air … Product differentiation is probably the most visible. AirAsia"s External Environment General external environment Global -AirAsia is a domestic, regional and international airline serving Southeast Asia, Europe, India, Indonesia, and Australia Suppliers -selected on a competitive basis Demographics -serving those that cannot afford the main stream airlines; about 500 million people within 3.5 hours flying time from their hub in … The merger has the potential to leverage management and strategic expertise from both companies. AirAsia can be possibly competing with other airplane industries if they can make efficiencies to reduce cost and make the low possible fare than other airplane industries. Tony, Fernandes, announced the business plan of company for fiscal 2014 will be concentrating on, cost-cutting efforts in order to improve profitability. While for AirAsia, price differentiation strategy is utilised whereby AirAsia is able to provide affordable price for budget flight. Truly, what makes airasia great is its people. 2305 Words10 Pages. Given that during an economic downturn, low cost airlines are generally more popular, AirAsia believes it is in a strong position to recover faster than many of its competitors. AirAsia and its competitors can also be negatively affected by government decisions. 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