air asia

Topics: Malaysia Airlines, Airline, Kuala Lumpur Pages: 3 (477 words) Published: May 24, 2014
Porter five forces of AirAsia

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…....
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