Nothing
1.Potential strengths of the new entrants in the low cost air transport industry
2.Increasing competition in e-commerce
3.Escalating prices of fuels used in business operation
4.Attack by the low-cost government airlines
Threat of Entry
There is a high barrier entering airlines industry since it requires high capital to set up everything such as purchase or lease air craft, set up office, hire staffs, and etc. Thus, this has reduced the treat to Air Asia. Moreover, brand awareness is quite important in this industry. Hence, to enter this industry not only required high capital but also have to take some time to create brand awareness. Consumers always choose the product or service they really trust. Thus, instead of creating brand awareness, new entry has to create so called brand loyalty. Hence, this is reducing treat to Air Asia too.( Roy L. Simerly) However, the government legislation is one of the barriers for entering airlines industry. For example, MAS has been protected by Malaysia government on the route to Sydney and Seoul Incheon.(Appendix) Therefore Air Asia find itself very difficult getting a new route from government. This not only affects the timeline set by Air Asia but also influence their profit. Nevertheless, this has limited the new entrance due to the government policy. In overall, the treat of entry is low to Air Asia.
The threat of new entrants is not strong - According to Davies & Lam (2001), barriers to entry are related to economies of scale, the existence of learning and experience curve effects, brand preferences and customer loyalty, capital requirements, cost disadvantages independent of size, access to distribution channels and government actions and policies. The economies of scale, for instance, implies that the more scale economies, the less threat of entry in that if entrant cannot quickly get large market share, it will have a major cost disadvantage. In the case of Air Asia, the threat of new entrants is not strong
2.Increasing competition in e-commerce
3.Escalating prices of fuels used in business operation
4.Attack by the low-cost government airlines
Threat of Entry
There is a high barrier entering airlines industry since it requires high capital to set up everything such as purchase or lease air craft, set up office, hire staffs, and etc. Thus, this has reduced the treat to Air Asia. Moreover, brand awareness is quite important in this industry. Hence, to enter this industry not only required high capital but also have to take some time to create brand awareness. Consumers always choose the product or service they really trust. Thus, instead of creating brand awareness, new entry has to create so called brand loyalty. Hence, this is reducing treat to Air Asia too.( Roy L. Simerly) However, the government legislation is one of the barriers for entering airlines industry. For example, MAS has been protected by Malaysia government on the route to Sydney and Seoul Incheon.(Appendix) Therefore Air Asia find itself very difficult getting a new route from government. This not only affects the timeline set by Air Asia but also influence their profit. Nevertheless, this has limited the new entrance due to the government policy. In overall, the treat of entry is low to Air Asia.
The threat of new entrants is not strong - According to Davies & Lam (2001), barriers to entry are related to economies of scale, the existence of learning and experience curve effects, brand preferences and customer loyalty, capital requirements, cost disadvantages independent of size, access to distribution channels and government actions and policies. The economies of scale, for instance, implies that the more scale economies, the less threat of entry in that if entrant cannot quickly get large market share, it will have a major cost disadvantage. In the case of Air Asia, the threat of new entrants is not strong