Singapore Airlines, which is located at the Singapore Changi Airport, is the flag carrier of the country. It highlights the country’s national sign and symbol. The company is involved customer service to the people and is one of the leading names in the airline industry. The company was founded on 1 May 1947 (Heracleous and Wirtz 2014). It was founded as Malaysian Airways. The company commenced the operation of the business from 1 October 1972. The company has an alliance with the company Star Alliance. The slogan of the company is “A Great Way to Fly”. The headquarters of Singapore Airlines is at Airline House, Singapore. The company at present has 24,350 employees in the workplace. Singapore Airlines ranks among the top 15 carriers in the world regarding revenue and ranks among the top 10 for the total capacity of the airway. Singapore Airlines has become a trendsetter and enjoy a brand name and value. The International Air Transport Association named the Singapore Airline as the second largest airline.
It has been viewed that Singapore Airlines had developed into a brand name and has become a trend setter. It has become one of the world’s renowned cargo and passenger carriers. In due course the company has become a trendsetter with major attention given to is operation strategy. it has been seen that the operation strategy of the company contributes to the competitive advantage of the company and the reason behind it being a brand name. There are certain strategies that Singapore Airline uses and discharges to the public (Heracleous and Wirtz 2014).
Major attention was given to the development of the in-flight services. Major effort is given on the improvement of the facilities and services at Changi airport. It is complemented by innovative technology. It introduced the concept and practically implemented the technology of wireless gatelink. This was implemented within diameter of the airport in order to share data successfully and improve the various levels of functions that were carried out within the organization (Rothaermel 2015). Another example of innovation was providing entertainment on demand to all classes. This strengthened the customer satisfaction, which the company required to maintain brand value and customer loyalty in the process. Therefore, major attention was given on the improvement of technology, which could benefit the company and in the process increase the profitability. The company stresses on training programs so that employees are trained in discharging quality service and consequently contribute positively to high level of satisfaction among people. The employees are motivated to looks after the needs and requirement of the customers so that they can provide the best quality service to the customer, which will help the company to achieve customer satisfaction and in the process help the company to strengthen its brand image and profitability index of the company. However, the negative point of this strategy is that increase the cost and investment of the company in technology and training program. Therefore, the challenge of rising cost is an important consideration that the company has to make. It is the negative side of this operational strategy. The cost of developing in house facilities and technology depicts the negative side of this operational strategy (Verbeke, 2013).
One of the highlighting strategies that Singapore Airlines adopt is the dual strategy. This strategy highlights the two main aspects of differentiation and cost leadership that the company adopts. According to this strategy the company focuses on providing quality service to the customers. It can be seen that recruitment procedures, high level training and cultural diversity contribute to the quality service that the company provides to the passenger. Cost leadership is another strategy of the company and it can be seen that the company employs low cost strategy to maintain high profitability index (Garg, Agarwal and Acharya 2016). The company outsources the non-primary activities and follows strict standards, low maintenance cost to enable the company to maintain low cost in the process. It helps the company to maintain high profitability index without affecting the price of the service. It creates customer satisfaction, helps the company in making a strong customer base and thereby helps the company to grow and expand in the process. It helps the company to fight competition and gain the competitive edge in the process. In the current situation of price war, one fact that needs to be noted is that dual strategy is a potent weapon to combat this situation (Schofield 2016). However, there is a negative side to this as well. The dual strategy is a difficult and a tricky proposition. Sustainability in the longer run is the major drawback of this strategy. It is difficult to sustain this strategy in the longer run. It tends to involve conflicting investment and organizational procedures (Bentley, Omer and Sharp 2013). Thus, it is not possible to continue this process and strategy in the long run.
The airline company follows a strategy termed as “internal growth strategy.” This strategy embarks on an aggressive growth approach that the company adopts. The two subsidiaries of the company assist the company in growth and expansion of the company. SIA Engineering plays a critical role in increasing the productivity and assumption of better opportunities in business (Lin 2015). The advent of globalization has led the company to expand internationally and indulge in cross country dealings. The company invests in different airline companies and develops new subsidiaries in different countries so that it improves and provides enhanced level of support to its airlines. The investment helps the company to improve the various elements of the company. It helps to renovate the cabin and other necessary departments that are subjected to continuous scrutiny and maintenance. It helps the company to keep the price level low and enables the company to have a high bargaining power over the suppliers. It gives the company the competitive edge and the brand value that the company genuinely requires. it assists the company in expanding its size, fleet and adds route. However, this strategy has its necessary pitfalls as well. It can be seen that globalization has mixed blessings. The cyclical trend of economy has a major effect on this strategy. The Asian Financial Crisis compelled the company to re-evaluate and re assess the operation cost of the company and the investments it made it different airline companies because the financial crisis had a major effect on the investments and operation cost of the company (Johnson 2014).
The customer oriented approach adopted by the company makes it give significant emphasis on the service that is given to people. For this purpose, training programs are given primary importance. The emphasis is given on training the recruits and employees about the importance of culture and cultural diversity. It majorly stresses deportments and ethical practices. It emphasises on effective communication level that will ensure better understanding and communication with the passengers. The cabin crew of the company are effectively trained to efficiently communicate with American, Chinese and Japanese passengers (Schofield 2016). However, it can be seen that such training programs are expensive and time consuming. It increases the expenditure level of the company and at the same time it is noticed that cultural issues are very critical and sensitive issue and thus, there could be major shortcomings in such regards.
On evaluating the swot analysis of the company, the advantages and feasibility of the strategies and operations can be depicted. It is seen that the strength of the company lies in strong customer, proper hub in Singapore and able support from the Government. The weakness of the company is seen in international traffic, high competition, tension between trade union and management. Opportunities include improvising training programs, global expansion policies in Middle East, China and India. The threat for the company is noticed in the increasing price of oil and fuel cost. Increasing number of competitors also pose a major threat to the company (Buckley, Burton and Mirza 2016).
Thus, concluding the essay, it can be viewed that the business strategies adopted by Singapore Airlines is highly strategic and efficient. There are certain pitfalls that is noticed in the strategies and approach assumed by the company. The dual strategy adopted by the company is highly beneficial and it ensures that the company has a high customer base and high profitability index. These strategies have helped the company to ensure a sound customer base with good and resounding profitability level. The company has been a global name and the increasing brand value in the airline industry. The critical evaluation of the business strategies of the company shows the pros and cons of these strategies and highlights the scope of the company in terms of growth and profit in the longer run.
Bentley, K.A., Omer, T.C. and Sharp, N.Y., 2013. Business strategy, financial reporting irregularities, and audit effort. Contemporary Accounting Research, 30(2), pp.780-817.
Buckley, P.J., Burton, F. and Mirza, H. eds., 2016. The strategy and organization of international business. Springer.
Garg, M., Agarwal, D. and Acharya, S., 2016. A Study on Sensory Advertising and Impact on Consumer Behaviour 2016. PARIPEX-Indian Journal of Research, 5(2).
Heracleous, L. and Wirtz, J., 2014. Singapore Airlines: Achieving sustainable advantage through mastering paradox. The Journal of Applied Behavioral Science, p.0021886314522323.
Johnson, B., 2014. Reflections: A perspective on paradox and its application to modern management. The Journal of Applied Behavioral Science, 50(2), pp.206-212.
Lin, Y.H., 2015. Innovative brand experience’s influence on brand equity and brand satisfaction. Journal of Business Research, 68(11), pp.2254-2259.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill.
Schofield, A., 2016. Mixing models: Singapore Airlines refines the formula for low-cost carrier ownership. Aviation Week & Space Technology.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
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