AirAsia India: Clash for the Indian Skies SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of AirAsia India: Clash for the Indian Skies
Armed with an air operator's permit, Air Asia, a Malaysian low-cost carrier airline, is preparing to enter the Indian aviation market. AirAsia is known as an aggressive player globally. It plans to use aggressive pricing strategies to revolutionize air travel in India and gain competitive edge in the aviation market through highly competitive operational targets. How will AirAsia India's entry and its aggressive pricing decisions work in the oligopolistic Indian aviation market? How will the barriers to entry affect its operational targets? Will its entry cause a clash in Indian skies and disrupt industry equilibrium? What strategies should AirAsia India pursue in such a market for long-term survival and growth? Tulsi Jayakumar is affiliated with professor at SP Jain Institute of Management & Research.
Swot Analysis of "AirAsia India: Clash for the Indian Skies" written by Tulsi Jayakumar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Airasia Aviation facing as an external strategic factors. Some of the topics covered in AirAsia India: Clash for the Indian Skies case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the AirAsia India: Clash for the Indian Skies casestudy better are - – geopolitical disruptions, challanges to central banks by blockchain based private currencies, 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%, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices,
there is backlash against globalization, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of AirAsia India: Clash for the Indian Skies
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AirAsia India: Clash for the Indian Skies case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Airasia Aviation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Airasia Aviation 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 India: Clash for the Indian Skies can be done for the following purposes –
1. Strategic planning using facts provided in AirAsia India: Clash for the Indian Skies case study
2. Improving business portfolio management of Airasia Aviation
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 Aviation
Strengths AirAsia India: Clash for the Indian Skies | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Airasia Aviation in AirAsia India: Clash for the Indian Skies Harvard Business Review case study are -
Analytics focus
– Airasia Aviation 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 Tulsi Jayakumar 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.
Effective Research and Development (R&D)
– Airasia Aviation 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 India: Clash for the Indian Skies - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Airasia Aviation 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.
Highly skilled collaborators
– Airasia Aviation has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in AirAsia India: Clash for the Indian Skies HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Airasia Aviation is present in almost all the verticals within the industry. This has provided firm in AirAsia India: Clash for the Indian Skies 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.
Ability to lead change in Strategy & Execution field
– Airasia Aviation 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 Aviation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Airasia Aviation in the sector have low bargaining power. AirAsia India: Clash for the Indian Skies has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Airasia Aviation to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Airasia Aviation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Airasia Aviation 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.
Sustainable margins compare to other players in Strategy & Execution industry
– AirAsia India: Clash for the Indian Skies firm has clearly differentiated products in the market place. This has enabled Airasia Aviation to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Airasia Aviation to invest into research and development (R&D) and innovation.
Learning organization
- Airasia Aviation 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 Aviation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AirAsia India: Clash for the Indian Skies Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Airasia Aviation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Airasia Aviation has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Airasia Aviation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses AirAsia India: Clash for the Indian Skies | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AirAsia India: Clash for the Indian Skies are -
Need for greater diversity
– Airasia Aviation has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Airasia Aviation products
– To increase the profitability and margins on the products, Airasia Aviation 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 Aviation, firm in the HBR case study AirAsia India: Clash for the Indian Skies needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Tulsi Jayakumar suggests that, Airasia Aviation 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AirAsia India: Clash for the Indian Skies, in the dynamic environment Airasia Aviation has struggled to respond to the nimble upstart competition. Airasia Aviation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AirAsia India: Clash for the Indian Skies HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Airasia Aviation has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As AirAsia India: Clash for the Indian Skies HBR case study mentions - Airasia Aviation 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.
High operating costs
– Compare to the competitors, firm in the HBR case study AirAsia India: Clash for the Indian Skies 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 Aviation 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study AirAsia India: Clash for the Indian Skies, is just above the industry average. Airasia Aviation needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Airasia Aviation has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study AirAsia India: Clash for the Indian Skies, 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.
Opportunities AirAsia India: Clash for the Indian Skies | 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 India: Clash for the Indian Skies are -
Creating value in data economy
– The success of analytics program of Airasia Aviation has opened avenues for new revenue streams for the organization in the industry. This can help Airasia Aviation to build a more holistic ecosystem as suggested in the AirAsia India: Clash for the Indian Skies case study. Airasia Aviation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Airasia Aviation can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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 Aviation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Aviation in the consumer business. Now Airasia Aviation can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Airasia Aviation 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Airasia Aviation can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Airasia Aviation can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Airasia Aviation to increase its market reach. Airasia Aviation will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Airasia Aviation 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.
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 Aviation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Airasia Aviation 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 India: Clash for the Indian Skies - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Airasia Aviation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Airasia Aviation 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 India: Clash for the Indian Skies, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Airasia Aviation 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.
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 Aviation can use these opportunities to build new business models that can help the communities that Airasia Aviation operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats AirAsia India: Clash for the Indian Skies External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AirAsia India: Clash for the Indian Skies are -
Increasing wage structure of Airasia Aviation
– 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 Aviation.
Environmental challenges
– Airasia Aviation 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 Aviation can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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 Aviation 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 Aviation 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.
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 Aviation in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Airasia Aviation 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Airasia Aviation will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Airasia Aviation 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 Aviation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Aviation needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Airasia Aviation has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Airasia Aviation 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.
Regulatory challenges
– Airasia Aviation 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 India: Clash for the Indian Skies 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 India: Clash for the Indian Skies 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 India: Clash for the Indian Skies 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 India: Clash for the Indian Skies 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 India: Clash for the Indian Skies 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 Aviation needs to make to build a sustainable competitive advantage.