Airasia porters 5 forces

So far 9, aircraft had been ordered, out of which 5, aircraft had been delivered by the company.

porters five forces in marketing

On the other hand, if a single supplier is producing something the company has to have, the company will have little leverage to negotiate a better price.

The Porter Five Forces Analysis will give you a good explanation for the profitability of an industry, and the firms within it. The need for more fuel-efficient airplanes is now an integral part of reducing costs in the aviation industry.

Bargaining power of buyers in air asia

The customer choice is subject to their convenience and flight schedule that fit them best. Porter has identified five competitive forces that shape every industry and every market. In airline industry, there are two types of substitutes, indirect and direct substitutes. In such situations when the supplier bargaining power is likely to be high, the buying industry often faces a high pressure on margins from their suppliers. Thus, the higher the number of competitors, the more fierce the competition. If consumers of Air Asia do not have brand loyalty, then the strength of the threat of new entrants is very high. Bargaining power of buyers No significant product differentiation. This is because in Malaysia, the airline industry is very competitive already and that the government also wants to protect the interest of its national airline, MAS which is operating on loses a few years back. The airline industry incurs high fixed cost which consists of finance cost, hire purchase, and staff costs. Thus, new competitors are difficult to make known their websites to travelers. Simerly Moreover, Air Asia always leaves customers an image as they always delay the flight. If you want to know why a company is able or unable, to make a decent profit, this is the first analysis you should do. If the customer is going to a budgeted trip, definitely he will choose bus which is the lowest price among the three. Easy to switch.

Thus, they are very sensitive to the price no matter in what product or service. The supplier of airline companies is the fuel supplier, foods supplier, merchandise supplier and aircraft supplier.

Porter 5 forces

Consumers always choose the product or service they really trust. However, both suppliers provide almost same standard aircrafts and hence the switching to Air Asia is low. Previously the company used Boeing models, which they lease it and the company had since phased out most of the models and replace with Airbus. Customers have access to market information. Thus, the higher the number of competitors, the more fierce the competition. There are about 59 low cost airlines competing in the industry. The airline industry incurs high fixed cost which consists of finance cost, hire purchase, and staff costs. Performance of other airlines are quite similar with Air Asia given there is no obvious product differentiation. New competitors which want to come in the industry have to spend little to compete with Air Asia. Other than that, the technology used by Airbus is the most advanced, thus Airasia must rely to the Airbus engineers to do maintenance of the aircrafts and seek advices.

Easy to switch. Therefore Air Asia find itself very difficult getting a new route from government.

porters five forces summary

By implementing this package AirAsia is looking to successfully maintain process integrity, reduce financial month-end closing processing times, and speed up reporting and data retrieval processes.

Some of the airlines offers cheaper price to achieve profitable passenger loads. The airline companies are not relying on a few groups of customers only.

value chain analysis of air india

The airlines serve over one hundred cities and islands across the sub-continental regions of South Asia, Southeast Asia and Northeast Asia.

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