How Does Porter Five Forces Airasia

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Porter‟s Five Forces Analysis of AirAsia In this case study we going to evaluate the attributes to assess the effectiveness of the strategies implemented by airasia in supporting its competitiveness in the airline industry using porter’s five forces analysis. In 1980 Michael E. Porter develops a model of the Porter‟s Five Forces this model is to identifies and analyzes 5 competitive forces that shape every indusrty and help determines an industry’s weakness and strengths.

These are the Porter‟s five forces analysis of AirAsia

These are the porter’s five forces:
Threat of new entrants.
• The customer has slight brand loyalty with airasia ,most of them are loyal to the lowfare if airasia fails to offer the lowest fare customers will choose another airline company which able to offer them a cheaper price.As may be seen as a result that airasia customers do not have brand loyalty with the brand or the company itself .This reason attracts new entrants to enter.New entrants and competitors are decreasing the customers’ loyalty and airasia’s market.

• High capital requirement.Airline business needs a big sum of start up capital
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Most of the customers of LCC are individuals; groups of travelare a small part. So the flight ticket sold are purchased individually, airlines cannotrely on travel agencies or few groups. Thus, the buyer has strong bargaining power. Bargaining power of supplier • Various suppliers. In the airline industry, there are some main suppliers andsecondary suppliers. The vital suppliers like fuel and aircraft have strong bargaining power. The number of suppliers is so limited; only Airbus and Boeing for the aircraft;and company purchase is only a small part of supplier business. On the other side thesecondary suppliers like food suppliers, merchandise suppliers, and other suppliershave very limited bargaining power to the company. A company can select thesupplier that fit for its business.

AirAsia Porter‟s five

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