Japan Tourist Analysis

Internal RivalryAccording to the geographic and product market, Lion Air, Batavia Air, Mandala Air, SriwijayaIndonesia and even Garuda Indonesia are Air Asia¶s competitors. They also provide cheap prices andnumerous flight routes in South Asia. All these flight companies compete in price except GarudaIndonesia which has a different strategy. As consumer of Garuda, we will get a value-added. Air Asiaclaims that they have no Admin fees but in reality, there are many additional fees which don¶t exist inother flight companies. Which is free for some companies is not for other ones. For instance, we canspeak about booking seats fees or luggage fees. This is definitely the price dimension which matters onthis specific market. Thus the firms struggle on their costs. For instance Air Asia is well-known for theconsiderable development of its Information Technology. Thanks to the considerable use of the IT, theyget low costs and are then able to offer low prices. In Asian developing countries, the middle class isgrowing up. This creates huge opportunities for the airlines. The companies will have to fight to get somemarket shares because customers are not loyal and switch easily from one company to another.y Entry Brand awareness is quite important in this industry. To enter this industry not only is requiredhigh capital but also brand image. Most of the time consumers choose the product or service they reallytrust. New entrants have to create brand loyalty by making huge investments to establish their reputation.The government legislation is one of the barriers for entering airlines industry. Therefore it isvery difficult getting a new flight route from the government. If Air Asia doesn¶t get any more flight-routes, it may affect their profit because they need to extend their network. Hopefully Air Asia has always been close to the governments in South Asia. For instance in Thailand, Shin Corp formerly owned by thefamily of former Thai Prime Minister, Thaksin Shinawatra, holds a 50% stake in Thai Air Asia. Thishelped Air Asia to open up and capture a sizeable market in Thailand. Government policies have limitednew entrances, which is a good thing for Air Asia because they are already settled on the market.

Key inputs as technological know-how, raw materials, distribution or locations may also limit theaccess to the market. But when a company already established creates its own low cost firm, the keyinputs are not a problem anymore. Tiger Airways which has been created by Singapore Airlines is one of the most dangerous competitors of Air Asia.y Suppliers PowerIn airline industry, the power of