Porter five forces of AirAsia Essay
Rivalry among existing competitor
Air Asia offers flights with lower price that other companies, but there are some companies that also offer service by the same price such as Malindo Air and Firefly and also these companies provide service with the same level of Air Asia so, in this case rivalry among existing competitor is high.
Threat of substitutes
We can define substitutes as a product or service that can be replaced with original product and give more satisfaction to customers. In airline industry these substitutes exist, For example if someone wants to go to Singapore from Kuala Lumpur can choose bus or train. As we know the bus is the cheapest transportation so customer prefers bus. But if we assume that customer wants to go to Australia airline is a good choice and by access internet customers will compare prices and choose the more reasonable for themselves in such a case threat of substitutes is moderate to Air Asia
Power of buyer
Success of industry can influenced by buyer. So, which companies offer better service to their customers , they are winner of the competition. Air Asia has lower price with better services than others, so it can be a good choice for customer. Power of buyer is a quite high to Air Asia.
Power of supplier
Every industry has some suppliers these suppliers have their own effect on the industry for airlines. There are only two options Boeing and Airbus. All airline company have the same situation. Both of them provide almost same standards aircraft and hence switching to Air Asia is low. Moreover Air Asia place order form Airbus to expend its routs to international routes so power of supplier may be reduced as Airbus’s profit may be influenced by Air Asia . Generally power of supplier is a quit moderate to Air Asia Threat of entrants
Setting up airline industry needs a high capital so it has high barriers, for example purchase aircraft, set up services, hire staff and…. It’s not enough most of time customer choose the product or industry which they are really trust. New entrants have to create brand loyalty by making huge investment to establish reputation. government legislation is one of the barriers for entering to this industry because it is too difficult getting a new flight route from government. Profit of Asia Air is related to extend their network for example MAS has been protected by Malaysia government on the route to Sydney and Seoul Incheon hence situation for AirAsia getting difficult to find a new route and it influence Air Asia’s profit. In another way AirAsia is closed to government in south Asia this helps Ari Asia to open up and capture a sizable market in south Asian countries. Government policy has limited new entrant so AirAsia is already settled on the market.
Study Acers provides students with tutoring and help them save time, and excel in their courses. Students LOVE us!No matter what kind of essay paper you need, it is simple and secure to hire an essay writer for a price you can afford at StudyAcers. Save more time for yourself. Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more