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SWOT ANALYSIS

(AIRASIA)
Key Internal Factors
STRENGTH
Low cost budget model
Aggressive and focused management
Low fare rates
Quick turnaround time between flights
Economies of Scale
WEAKNESS
Overcapacity
Not a Flag Carrier
Irregular situations may not be handled by
limited human resources
Reliance on E-ticketingsystem glitch may
disrupt sales operation
Inflexibility when input price increase due to
thin net margin
TOTAL

Rating

Weighted
Score

0.30
0.10
0.10
0.05
0.15

x
x
x
x
x

4
4
3
4
4

1.20
0.40
0.30
0.20
0.60

0.10
0.05

x
x

2
1

0.20
0.05

0.03

0.03

0.10

0.20

0.02

0.02

1.00
Key Internal Factors

OPPORTUNITY
Market growth in Asia
Government policy (Deregulation, Open
Skies)
Asias geographic location
Growth of tourism industry
Change in consumer preference
THREAT
Government policy (aviation regulation,
favoring flag carriers)
Terrorism, natural disasters, and other
incidents that may affect consumers
confidence
Infrastructure (availability of airport)
Competition (other LCCs, full service,
ground service)
High fuel price decreased yield
TOTAL

Weig
ht

3.20

Weig
ht

Rating

Weighted
Score

4
3

0.72
0.36

0.18
0.12

0.08
0.10
0.07

x
x
x

3
4
3

0.24
0.40
0.21

0.05

0.15

0.07

0.14

0.08

0.16

0.15

0.45

0.10

0.30

1.00

3.13

Vision:
To be the largest low cost
airline in Asia and serving
the 3 billion people who are
currently underserved with
poor connectivity and high
fares.
Mission:

To be the best
company to work for
whereby employees are
treated as part of a big
family

Create a globally
recognized ASEAN brand

To attain the lowest


cost so that everyone can
fly with AirAsia

Maintain the highest


quality product,
embracing technology to
reduce cost and enhance
service levels

STRENGTHS
1. Low Cost Budget Model
2. Aggressive and focused
Management
3. Low fare rates

4. Quick turnaround time


between flights
5. Economies of scale

WEAKNESS
1. Overcapacity
2. Not a flag carrier
3. Irregular situations may
not be handled by limited
human resources
4. Reliance on E-ticketing
system glitch may disrupt
sales operation
5. Inflexibility when input
price increase due to thin
net margin

Business Model:
Low Cost Model
OPPORTUNITIES
1. Market growth in Asia
2. Government policy
(Deregulation, Open
Skies)
3. Asias geographic
location
4. Growth of tourism
industry
5. Change in consumer
preference

THREATS
1. Government policy
(aviation regulation,
favoring flag carriers)

S-O Strategy
Penetrate potential markets
though acquisition or joint
ventures. This will enable
AirAsia to establish its
presence abroad with the
assistance of the local
foreign partner. Joint
ventures or acquisitions may
provide knowledge of
government workings,
regulations, internal markets
and distribution or operation
know how. These kinds of
knowledge are valuable for
AirAsia since they are
unfamiliar of the new
territory they will penetrate.
S-T Strategy
Aside from market
development through
acquisition or joint venture,

W-O Strategy
Strategize price increase on
certain routes during peak
season without hurting the
companys position on price
leadership in the industry.
This will give the company
buffer on net margin/income
during off-season. This will
also give the company
additional budget to
structure a contingency unit
who will then be assigned on
forming tactics to address
unforeseeable system
breakdown.

W-T Strategy
Penetrate potential markets
through acquisition or joint
ventures with other local

2. Terrorism, natural
disasters, and other
incidents that may affect
consumers confidence
3. Infrastructure (availability
of airport)
4. Competition (other LCCs,
full service, ground
service)
5. High fuel price decreased
yield

AirAsia should also provide


trainings for their employees
that include dealing with
unprecedented situations
and instilling their roles in
effective customer service.
Once they become effective
customer service provider,
improvement on basic
services will follow. The right
mix of good customer
service and low fare rates
could be AirAsias formidable
competitive advantage.

airlines which will not only


provide comfort in entering
these markets but also in
dealing with government
policy issues. We also
suggest that the company
strengthen their contingency
unit in case of
unprecedented scenarios.
Lastly, being the current
trend, using guerilla
marketing will also help
heighten their marketing
strategy for brand awareness
and recall while incurring
minimal additional costs.

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