AirAsia Faces a Major Crisis: The Loss of QZ8501 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of AirAsia Faces a Major Crisis: The Loss of QZ8501
On December 28, 2014, contact with Indonesia AirAsia flight QZ8501, carrying 162 people, was lost after it left Surabaya, Indonesia bound for Singapore. All passengers were believed dead. Until this horrific incident, AirAsia and its various affiliated airlines, which included AirAsia X and Indonesia AirAsia, along with several other airlines organized in joint ventures throughout Southeast Asia, had recorded rising profits, rapid expansion and, until this incident, a solid safety record. The company was buoyed by a savvy marketing strategy and the leadership of its flamboyant founder. He was concerned now about how this tragedy would affect AirAsia's business in the short and long term. Should he delay or even stop some of his aggressive growth initiatives?
Authors :: Jonathan P. Doh, Thomas Lawton, Andreas Schotter
Swot Analysis of "AirAsia Faces a Major Crisis: The Loss of QZ8501" written by Jonathan P. Doh, Thomas Lawton, Andreas Schotter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Airasia Qz8501 facing as an external strategic factors. Some of the topics covered in AirAsia Faces a Major Crisis: The Loss of QZ8501 case study are - Strategic Management Strategies, Crisis management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the AirAsia Faces a Major Crisis: The Loss of QZ8501 casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of AirAsia Faces a Major Crisis: The Loss of QZ8501
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AirAsia Faces a Major Crisis: The Loss of QZ8501 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Airasia Qz8501, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Airasia Qz8501 operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of AirAsia Faces a Major Crisis: The Loss of QZ8501 can be done for the following purposes –
1. Strategic planning using facts provided in AirAsia Faces a Major Crisis: The Loss of QZ8501 case study
2. Improving business portfolio management of Airasia Qz8501
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Airasia Qz8501
Strengths AirAsia Faces a Major Crisis: The Loss of QZ8501 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Airasia Qz8501 in AirAsia Faces a Major Crisis: The Loss of QZ8501 Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Airasia Qz8501 is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Airasia Qz8501 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Airasia Qz8501
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Airasia Qz8501 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Airasia Qz8501 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Airasia Qz8501 has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Airasia Qz8501 are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Airasia Qz8501 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Airasia Qz8501 has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to recruit top talent
– Airasia Qz8501 is one of the leading recruiters in the industry. Managers in the AirAsia Faces a Major Crisis: The Loss of QZ8501 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Airasia Qz8501 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study AirAsia Faces a Major Crisis: The Loss of QZ8501 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Airasia Qz8501 in the sector have low bargaining power. AirAsia Faces a Major Crisis: The Loss of QZ8501 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Airasia Qz8501 to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– AirAsia Faces a Major Crisis: The Loss of QZ8501 firm has clearly differentiated products in the market place. This has enabled Airasia Qz8501 to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Airasia Qz8501 to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Airasia Qz8501 is present in almost all the verticals within the industry. This has provided firm in AirAsia Faces a Major Crisis: The Loss of QZ8501 case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Airasia Qz8501 is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Airasia Qz8501 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AirAsia Faces a Major Crisis: The Loss of QZ8501 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses AirAsia Faces a Major Crisis: The Loss of QZ8501 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AirAsia Faces a Major Crisis: The Loss of QZ8501 are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AirAsia Faces a Major Crisis: The Loss of QZ8501, it seems that the employees of Airasia Qz8501 don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study AirAsia Faces a Major Crisis: The Loss of QZ8501 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case AirAsia Faces a Major Crisis: The Loss of QZ8501 can leverage the sales team experience to cultivate customer relationships as Airasia Qz8501 is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Airasia Qz8501, firm in the HBR case study AirAsia Faces a Major Crisis: The Loss of QZ8501 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AirAsia Faces a Major Crisis: The Loss of QZ8501, in the dynamic environment Airasia Qz8501 has struggled to respond to the nimble upstart competition. Airasia Qz8501 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Airasia Qz8501 supply chain. Even after few cautionary changes mentioned in the HBR case study - AirAsia Faces a Major Crisis: The Loss of QZ8501, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Airasia Qz8501 vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study AirAsia Faces a Major Crisis: The Loss of QZ8501 has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Airasia Qz8501 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Airasia Qz8501 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AirAsia Faces a Major Crisis: The Loss of QZ8501 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Airasia Qz8501 has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study AirAsia Faces a Major Crisis: The Loss of QZ8501, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, Airasia Qz8501 has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Products dominated business model
– Even though Airasia Qz8501 has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - AirAsia Faces a Major Crisis: The Loss of QZ8501 should strive to include more intangible value offerings along with its core products and services.
Opportunities AirAsia Faces a Major Crisis: The Loss of QZ8501 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study AirAsia Faces a Major Crisis: The Loss of QZ8501 are -
Loyalty marketing
– Airasia Qz8501 has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Airasia Qz8501 to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Airasia Qz8501 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AirAsia Faces a Major Crisis: The Loss of QZ8501 suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Airasia Qz8501 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Airasia Qz8501 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Airasia Qz8501 can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at Airasia Qz8501 can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Learning at scale
– Online learning technologies has now opened space for Airasia Qz8501 to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Airasia Qz8501 has opened avenues for new revenue streams for the organization in the industry. This can help Airasia Qz8501 to build a more holistic ecosystem as suggested in the AirAsia Faces a Major Crisis: The Loss of QZ8501 case study. Airasia Qz8501 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Airasia Qz8501 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Airasia Qz8501 to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Airasia Qz8501 to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Airasia Qz8501 can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, AirAsia Faces a Major Crisis: The Loss of QZ8501, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Airasia Qz8501 in the consumer business. Now Airasia Qz8501 can target international markets with far fewer capital restrictions requirements than the existing system.
Threats AirAsia Faces a Major Crisis: The Loss of QZ8501 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AirAsia Faces a Major Crisis: The Loss of QZ8501 are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Airasia Qz8501 in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Airasia Qz8501 is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Airasia Qz8501 needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Airasia Qz8501 can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Airasia Qz8501 has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Airasia Qz8501 needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Airasia Qz8501 needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Airasia Qz8501 needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Airasia Qz8501 can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Airasia Qz8501 demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Airasia Qz8501 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Airasia Qz8501.
Increasing wage structure of Airasia Qz8501
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Airasia Qz8501.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Airasia Qz8501 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Airasia Qz8501 high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of AirAsia Faces a Major Crisis: The Loss of QZ8501 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study AirAsia Faces a Major Crisis: The Loss of QZ8501 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study AirAsia Faces a Major Crisis: The Loss of QZ8501 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study AirAsia Faces a Major Crisis: The Loss of QZ8501 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of AirAsia Faces a Major Crisis: The Loss of QZ8501 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Airasia Qz8501 needs to make to build a sustainable competitive advantage.
