Question

Why the Bargaining Power of Suppliers on Air Asia is high? What are the factors? Please provide 3 factors and explain in more detail.

Answer 1

1) dependence on airbus- airbus uses advanced technology but AirAsia's technical department is quite week. so technically airasia is depend on airbus for technology and maintenance. Airbus demands desirable money for support and supplies.

2) being small- air Asia only contributes 2% in airbus's total business. It is UK based company. That's why airbus possess high bargaining power on AirAsia. For example like shopkeepers has strong bargaining power on their small customers.

3) monopoly in this case- AirAsia depends only one for aircrafts. So like monopoly market it have to pay as they want.