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SWOT

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by

shanhong chen

on 5 September 2013

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Transcript of SWOT

Agenda
Air Asia
marketing study case
Presented by Ari, Jean, Patrick,
Ryoko, Shanhong
SWOT
Weakness
Threats
Opportunity
Strength
Expanding “Global Middle Class”
Source: Kharas and Gertz, Airbus

Air travel has proved to be resilient to external shocks
Source: ICAC, Airbus
… and is expected to remain resilient in the future
Strong brand awareness
No frills company culture
Pioneer advantage
Lean distribution strategy
Low cost operations
Strong relationships with
local partners
strong management team
extensive network
Long haul LCC Business Model
Ancillary revenue streams
Untargeted customer segments
Increasing customer base in
existing markets
Unconnected destinations
Increasing internet population
Low customer loyalty
Inflexible due to LCC business
model
Limited distribution channel
Reliance on secondary airport
Government interference and regulation
Volatility in fuel prices
Heavy reliance on local
infrastructure
Intense competition
Competitive Advantage
Strong Brand / Image
Global brand recognition
Strong Social Media
presence (1.8M Facebook
likes, 680k Twitter
followers)
High Quality Operating Model
Young Fleet
On-time performance 85%
Operational reliability
Ancillary Revenue (RM40/pax)
16% of total revenue
Offsets fluctuation in fuel
prices
Considered innovative
First Mover Advantage /
"No-Frills"
Consistent Low Cost
company culture
Vast knowledge base and experience in LCC industry
Lowest Operating
Cost Basis Globally
High Utilization
High aircraft density
Low cost hubs
Labour productivity
Large established route
network
Aviation Industry
Low Cost Carrier (LCC)
Target budget-constrained customers
Single –class service
Single fleet types
Primarily short haul routes
Point-to-point services
Flexible, entrepreneurial corporate culture
Full –Service Carrier (FSC)
Target all market segments
Offer several passenger classes
Operate a wide variety of aircraft types
Serve all routes
Own hub operations at national gateway airports
Serve as national flagship carriers
Buying Decision Process
Problem
Recognition
Information
Search
Evaluation
of
Alternatives
Purchase
Decision
Post Purchase Evaluation
Consumer Needs Analysis
Holiday Travelers
Small & Medium Enterprise
(SME) Travelers
Direct Flights
Low-Cost
Brand Affinity
Premium Cabin
On-time Departure/Arrival
Proximity to Airport
Online Ticket Purchase
Profile
Name | Melissa
Age | 20
University student from Australia who is backpacking around South East Asia during her summer break
Budget Travelers
Baggage Allowance
Flexibility
Free Pre-select Seats
Safety
In-flight Entertainment
Free Meal Service
Seat Comfort
Mileage Program
Technological
Enhance of the Internet infrastructure
New technology allows to
save fuel and CO2 emission
for aircraft

Demographic
More air traffic user esp. in APAC
Economics
Air industry’s strong
growth
More middle class
esp. in APAC
Fuel volatility
Political / Legal
Regulation is highly
diverse
Visa restriction
discourages trip
Natural
Geographical advance
in air transport
Socio-cultural
More Internet travel
site users
External
Environment

The independent traveler

46% of travelers are
mainly making their
own travel arrangements
and bookings via the
internet, and estimated
to rise to 52%.
Especially in China, Korea,
Japan.

Asia-Pacific leads world traffic by 2031
Source: Airbus

Asia Pacific regulatory perspectives
Highly diverse region: multiple government and regulators
Inconsistencies in level of commitment to regulatory oversight and safety initiatives
ASEAN open sky agreement, covering 10 countries in SE Asia, is to be implemented in 2015
Across APAC regions, 6% of travelers quote visa restrictions as their main impediment to travel, ahead of others such as lack of funds, lack of time.
Profile
Name | Darren & Patrick
Age | 32
Indonesia-based entrepreneurs who travel frequently between Indonesia and Malaysia for business

Direct Flights
Low-Cost
Brand Affinity
Premium Cabin
On-time Departure/Arrival
Proximity to Airport
Online Purchase
Baggage Allowance
Flexibility
Free Pre-select Seats
Safety
In-flight Entertainment
Free Meal Service
Seat Comfort
Mileage Program
Corporate Travelers
Family Travelers
Visiting Friend & Relatives (VFR)
Profile
Name | Siti bin Zahari
Age | 56
A retired Malaysian school teacher from
Penang, who flys to Kuala Lumpur once
a month to visit her children
Direct Flights
Low-Cost
Brand Affinity
Premium Cabin
On-time Departure/Arrival
Proximity to Airport
Online Purchase
Baggage Allowance
Flexibility
Free Pre-select Seats
Safety
In-flight Entertainment
Free Meal Service
Seat Comfort
Mileage Program
Key Issues &
Implications for
Marketing Strategy
Build Customer Loyalty & Brand Awareness
Differentiate Service Offering
Leverage on Growth Opportunities
Distribution Channel Strategy
Standardization vs. Localization
Cost Leadership vs. Service Offering
Enhance Customer BIG Loyalty Program

Offer short-term rewards & discounts



Enhance Customer Relationship Management

Communication strategy for delayed flights

Complaint Management (e.g via mobile App)

Customer engagement („name the aircraft“ competition)



Adjust Branding Campaign Strategy

Focus on Sport events in APAC region

Reach out to additional target customers (Families: Lego Land, Disney)

Target „non-flyers“ in APAC region as they may be future customers

Develop Innoative Ancillary Revenue Streams
In-flight entertainment
Ancillary Revenue package deals ("Ladies" or "Business" packages)
Current Split of Distribution Channels (AirAsiaX)
84% Direct online sales via airasia.com,
mobile App., and expedia.com
Limited Accessibility in certain regions (Internet, Credit Cards) requires alternatives (Internet Kiosks, Convenience Stores)

Need for Training ("How to book online" youtube videos or demonstrations)

Strategical partnerships with complementers to create win-win situation
Online travel agencies (Expedia ???) and local travel agencies
Facebook booking
Operating Costs of LCC & FSC
Operating costs of LCC in Asia Pacific
Company Analysis
Senior Travellers
Price conscious Business
Travellers
SMEs account for 80% of
employment in APAC but
< 20% of travellers
Long Haul LCC--First Mover Advantage
Strategically evaluate alternatives based on profitability
and needs of target segment! (Europe?, US?)
Partner with governments to connect remote areas in
APAC region
Target Group Marketing
Macro & Micro Analysis
External Environment
Customer
Industry / Competition
Company
Collaborators & Complementers
Porter’s 5 Forces
SWOT
Findings & Recommendations
Thank you for flying with us
Full transcript