Potential Entrants
Competitive rivalry is possibly to be high due to the fact that there are high exit barriers among existing competitors and Air Asia is rapidly growing in Asian aviation market. Air Asia has strive its best in the industry in order to be well recognized and provide its service as well as low fare cost among other low cost carriers. There are other competitors in Asian aviation industry and Air Asia cope among them in an effective manner as the competitors are in balance.
Potential entrants is mainly like a threat of new entrants due to the fact that it requires high capital investment to lease an aircraft and service agreement could also build barriers to those who enters the Asian aviation market. There are also regulatory limitations from the government bodies. The threat of new entrants are moderate and it don’t have a brand loyalty where as Air Asia is well known as low cost carrier. Therefore, the threat of new entrants is low towards the Air Asia as it’s well established.
Buyers are one of the factor in Asian aviation market due to the alternative sources of supply could be offered as the buyers are the customer which is a power related to the number of customers in the organization. Air Asia is coping with this threat very well as there are low switching costs and provides its service in a well diverse way.
A substitute brings in the threat due to the fact that if the product is substitute somewhere else then the competitive pressure can increase. Air Asia copes with this threat as it offers low fares and provides its consumer an ease. It also brings in to diminution in demand as customers can switch to alternatives. The probable substitution is inclusive of the surface transportation particularly the trains in the field of aviation. This is a major threat to Air Asia due to the fact that it is mainly late and buyers can choose other low cost carrier airline Company to assure that they arrive to their desire