AirAsia India: Clash for the Indian Skies SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
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 - – technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, increasing commodity prices, increasing transportation and logistics costs, increasing energy prices, increasing government debt because of Covid-19 spendings,
challanges to central banks by blockchain based private currencies, there is backlash against globalization, 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 -
Cross disciplinary teams
– Horizontal connected teams at the Airasia Aviation 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.
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.
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.
Organizational Resilience of Airasia Aviation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Airasia Aviation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Airasia Aviation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AirAsia India: Clash for the Indian Skies Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Airasia Aviation is one of the most innovative firm in sector. Manager in AirAsia India: Clash for the Indian Skies Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Ability to recruit top talent
– Airasia Aviation is one of the leading recruiters in the industry. Managers in the AirAsia India: Clash for the Indian Skies are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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 brand equity
– Airasia Aviation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Airasia Aviation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
Aligning sales with marketing
– It come across in the case study AirAsia India: Clash for the Indian Skies 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 India: Clash for the Indian Skies can leverage the sales team experience to cultivate customer relationships as Airasia Aviation is planning to shift buying processes online.
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.
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.
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.
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.
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.
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.
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 Aviation supply chain. Even after few cautionary changes mentioned in the HBR case study - AirAsia India: Clash for the Indian Skies, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Airasia Aviation vulnerable to further global disruptions in South East Asia.
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 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.
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 -
Developing new processes and practices
– Airasia Aviation can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing 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.
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.
Buying journey improvements
– Airasia Aviation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AirAsia India: Clash for the Indian Skies 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Airasia Aviation 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 Aviation to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Airasia Aviation 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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Airasia Aviation is facing challenges because of the dominance of functional experts in the organization. AirAsia India: Clash for the Indian Skies 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.
Loyalty marketing
– Airasia Aviation 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.
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 -
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.
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.
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.
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.
Stagnating economy with rate increase
– Airasia Aviation 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AirAsia India: Clash for the Indian Skies, Airasia Aviation may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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 Aviation.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Airasia Aviation 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 India: Clash for the Indian Skies .
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 Aviation business can come under increasing regulations regarding data privacy, data security, etc.
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.
Shortening product life cycle
– it is one of the major threat that Airasia Aviation is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
