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 - – central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, increasing energy prices,
there is backlash against globalization, geopolitical disruptions, 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 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.
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.
Strong track record of project management
– Airasia Qz8501 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Analytics focus
– Airasia Qz8501 is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jonathan P. Doh, Thomas Lawton, Andreas Schotter can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
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.
High brand equity
– Airasia Qz8501 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Airasia Qz8501 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
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 -
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Airasia Qz8501 is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Airasia Qz8501 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Airasia Qz8501 to focus more on services rather than just following the product oriented approach.
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.
Slow to strategic competitive environment developments
– As AirAsia Faces a Major Crisis: The Loss of QZ8501 HBR case study mentions - Airasia Qz8501 takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Airasia Qz8501 products
– To increase the profitability and margins on the products, Airasia Qz8501 needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Jonathan P. Doh, Thomas Lawton, Andreas Schotter suggests that, Airasia Qz8501 is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Airasia Qz8501 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Airasia Qz8501 can use these opportunities to build new business models that can help the communities that Airasia Qz8501 operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Airasia Qz8501 has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study AirAsia Faces a Major Crisis: The Loss of QZ8501 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Airasia Qz8501 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Airasia Qz8501 can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Airasia Qz8501 is facing challenges because of the dominance of functional experts in the organization. AirAsia Faces a Major Crisis: The Loss of QZ8501 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 -
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Airasia Qz8501 in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Airasia Qz8501 can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study AirAsia Faces a Major Crisis: The Loss of QZ8501 .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Airasia Qz8501 business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
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.