The Singapore Airlines acts as the flag carrier of Singapore and its hub is located at Singapore Changi Airport. They make use of the Singapore Girl as the central figure in relation to corporate branding. They pioneered the launching of the Airbus A380 that is the largest passenger aircraft in the world. It is positioned among the top 15 carrier on worldwide basis and it has been ranked in the top position in the world in relation to international passengers (Singaporeair.com, 2017). Singapore Airlines on the 15th of December, 2010 was named as second-largest airline within the world by that of the International Air Transport Association.
A majority part of the Singapore Airlines is owned by the Singapore government. The logo of the Singapore Airlines is a bird that is inspired by the silver kris. The keris is key to the branding of Singapore Airlines. The logo features on the tailfin along with that of the collaterals of the airlines. It continues to remain the same after the split of Malaysia-Singapore Airlines. Singapore Airlines has flights to different 62 destinations within 32 countries (Singaporeair.com, 2017). Its presence is more strongly felt within the Southeast Asian region and along with subsidiary Silk Air helps in connecting Singapore with that of other international destinations. The Singapore airlines plays an important role on Kangaroo Route. It flies around 11.0% among all international traffic in and out of Australia.
Singapore Airlines has organized the human resources in such a manner in order to achieve competitive advantage and outperform the different airlines within its peer group. In the last four decades, it has managed to earn a great reputation in the business of commercial aviation that is hugely competitive (Kleymann, Birgit, and Hannu Seristö 2017). It has managed to provide the customers with service that is of high quality and has managed to dominate the business-travel segment. It has won laurels for being the Best Airline in the world from that of the Conde Nast Traveler 21 times. It has also been awarded with the Skytrax’s Airline of Year Award thrice within the last decade.
It is famous as a cost-effective operator. . It was found that cost per available seat kilometer was only 4.58 cents. On the basis of International Air Transport association study the cost in relation to full-service European airlies was around 8 to 16 cents. For the U.S. Airlines it was around 7 to 8 cents and for the Asian airlines it amounted to 5 to 7 cents.
It combines incompatible strategy in relation to differentiation and it pursues this with the help of high quality service and that of continuous innovation. It has proved itself to be formidable in the arena of cost leadership. There are very few enterprises that has managed to execute the dual strategy in a profitable manner. Management expert like that of Michael Porter has opined that dual strategies involve contradictory organizational process.
The SIA group has reported that operating profit of around $623 million in the financial year of 2016-17 that was 8.5 % lower when compared to that of the same period in the last year. Net profit came down by around 55.2 % that was on account of the net loss incurred during the fourth quarter. The Group Revenue fell around $ 370 million on the year-to –year basis to become $14,869 million. The revenue that is gathered from flown revenue came down by around $ 382 million inspite of having traffic growth. The cargo revenue also came down by $87 million on account of the cargo yield erosion. Other revenue was also lower on account of the absence of income that was earned due to the release of seven delivery slot that was recorded in last financial year (see Appendix A).
Companies can increase the market share with the help of innovation and by strengthening the customer relationships. Acquiring competitors can also help to strengthen the financial condition of the company. Higher share in the market helps to put the companies at a great competitive advantage. Companies that have a high market share can receive better prices from that of the competitors (Peppard, Joe, and Ward 2016).With the increase in market share the productivity will also increase. Innovation is a method that the company can make use of in order to increase the market share.
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Strength |
Weakness |
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It has strong backing from that of the Singapore Government It boasts of satisfied customer base Top airline brand in relation to market capitalisation Superior customer service First-rate branding has enabled it to become one of the best airline in the world Influence in around 60 destinations in near about 35 countries Provides hot meal to the customers Youngest fleet of the aircraft |
It costs a great deal to travel in Singapore Airlines It relies heavily on international traffic Market share is less on account of increasing competition The turnover ratio has reduced because Singapore Airlines boasts of strong financial performance in the last years. The portfolio is unbalanced By reducing the wages and on account of minimum sizing in regard to bad economic conditions, The relationship between that of labour union and that of management has been destroyed |
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Opportunity |
Threat |
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It can influence the outstanding hub that it has created in Singapore It has brand-new fleet that can help in increasing the customer confidence It should leverage international destinations in order to build on its high brand image It can develop marketing strategies that makes people curious. Developing unique marketing strategies in the growth areas can help in attracting new customers. Opportunity to increase the market base by expanding in the region of Middle East, India along with that of China. Offer training program to the staffs in order to ensure brand suitability. |
Competitors like that of Qantas and Thai Airline Should arrange for low cost flights Increase in the price of oil led to increase in the in the prices of ticket Raising of fuel cost |
Fleet modernization along with service innovation has made Singapore Airlines one of the most travel brand that is respected in the world. Success has been brought about in Singapore Airlines with the effort of people. In the year 1972, when it was founded the fleet of the company consisted of 10 aircraft that flew to around 22 cities. Currently, it boasts of a modern fleet that has more than that of 100 passenger aircraft.
Singapore Airlines in the present has code shares with that of 25 airlines who are outside that of the SIA Group that includes 19 members of the Star. United along with Thai Airways lists among the five founding member of the Star that dates back to 1997. When the SIA applied in order to join Star after some years, United objected to the joining of SIA and since then the two airlines had a sour relationship. Currently, SIA code shares with non-aligned hybrid airline that of Jet Blue Airways along with that of Virgin America. SIA in the present operates one daily A380 flight through Tokyo Narita whereas San Francisco is the SIA’a greatest US gateway on the basis of capacity. It served two daily flights 777-300ER flight, one through Seoul and the other one through that of Hong Kong. Most of the Asian competitors of SIA has spread in the market since that of 2013.
Service excellence along with that of innovation requires the investment in resource and needs a value system that would help in pursuing the excellence. According to Porter, a company should not have greater than one strategy because it would lead one to get stuck in the middle without achieving cost leadership or differentiation. Singapore Airlines should balance features that are deemed to be contradictory. Singapore Airlines should have two planning horizons one should be a short term and the other one should be of long term. They should be in a iterative relationship and should balance financial controls along with that of strategic control (Hill et al., 2014).
Singapore Airlines should be able to balance the present (exploitation) with that of the future (exploration) by putting in place separate subsidiaries that has separate strategies. They should be integrated with the help of a common executive team at the level of corporate and this approach is labeled as “structural ambidexterity”. One can adopt a second business model that can act as an appropriate response to that of a disruptive competitor. The two business models should be kept separate in order to avoid organizational conflict but they should be potentially integrated in order to pursue synergies (see Appendix B).The power of the suppliers is high in the case of an airline industry. With the increase in the price of fuel, it has to increase the price of the ticket. Buying power in relation to the individual customer is high as there are many airlines company and the buyers get plenty of choices from which they can choose. The airlines industry is extremely competitive and the growth of megacarriers in the international arena like that of U.S. along with that of European Airlines has posed stiff competition for the Singapore Airlines. These airlines merge in order to cut the costs and this intensifies the competition for the Singapore Airlines (see Appendix C).
Excellent service along with low cost that are key to Singapore Airlines and with the help of intense training it can create a unique place for itself among the major airlines company. With the help of the short term along with that of the long term plan, it will be able to create strategies that will make its business profitable. Short term goals should be set on the basis of prevailing conditions that will in turn determine the long term objective of the company. A common executive team will be able to make policies taking in mind the growth of the organization. A second business model can act as an alternative to that of a business competitor that can illuminate the problems of the company and how they can be solved for the growth of the organization. Synergy in the policies of the organization will ensure that the company works profitably in the long run.
The Singapore Airlines is primarily controlled by policies of the Government. Without any kind of proper authorization it cannot fly to any other destination. De-regulation in relation to the aviation industry opens up opportunities for the new entrants and increases the competition.
The environmental factors that influence the SIA is that of rise in the price of fuel. Another strategic issue in relation to the SIA is that of overcapacity in relation to Southeast Asian market. Volatility has become a major issue in the world today. The runways should be expanded along with that of the terminals. The needs of the consumer are becoming fickle day by day (Hill et al., 2014).The Chinese market is growing at a rapid pace and the needs of individual customer should be taken into account in order to introduce strategies that will expand the business of the company.
SIA should continue to develop the network outside that of Singapore. By adding a fourth daily service in the region of UK and expanding the footprint in the region of Australia and India. Growth can also be achieved with the help of partnership and working closely with that of Star Alliance partner. Joint venture with that of Scandinavian Airlines can prove to be an effective strategy and joint venture with that of the Virgin will allow the SIA to be able to reach secondary point in the Australia (Lin, Yi Hsin 2015).
Acquisition in respect to the remainder of Virgin would cost the company around $1.5 billion that is inclusive of expected recapitalisation in relation to the carrier. It has the financial power to buy the airline and the Australian government should lend its support for the airlines. The Chinese dragging more hubbing over that of Beijing or Guangzhou would draw people away from that of the Singapore hub. The Singapore Airlines boasts of a large order book of 787’s and A350”s and they can transfer some of it to that of Virgin so that it can fly on the trans-Pacific route. Singapore as a destination hub should be promoted and constant improvement in relation to the products and services can benefit the company increasingly.
Staging and pacing is indicative of the speed and sequence in relation to the strategic moves. More focus is laid on the passengers as compared to that of the pricing. Most of the airlines are focusing on post-deregulation and they are offering a price bundle that is proving to be optimal for the passengers. They are taking recourse to yield management and force the passengers to make reservations at a specific time so that they can earn benefits. In-flight service is compromised in the case of these airlines and the passengers of Singapore Airlines are ready to pay a large sum if they have a pleasurable experience while being on the flight. (Hubbard et al., 2014).Training of staff along with that of use of innovations is necessary in order to bring improvements in the organization.
Arena will be able provide answers to the strategy questions that can tell the managers in which arenas the firm should be active. Singapore Airlines has announced that a 452.6 million Singapore dollar are bidding for shares in the budget carrier called Tiger Airways Holdings that is incurring loss. It is planning to increase the stake from that of 55.8 % to eventually 100 %. It is ready to pay the shareholders of Tiger $0.41 per share. It is willing to pay 32% premium on the closing price of the budget carrier closing price. Bringing Tiger within the fold would help in the acceleration of the four-pronged strategy of the Singapore Airlines. Singapore Airlines along with that of Silk Air would lay emphasis on premium traffic. Scott and Tiger would help in tapping the budget demand which is a segment that is very popular in Asia.
Singapore Airlines would focus on the subjective issues that is in other words termed as “human software”. They set apart from that of their competitors by focusing on in=flight service. They try to maintain the golden standard in relation to in-flight service. The entire process of recruiting the in-flight personnel and that of flight attendants are monitored at close quarters and a lot of attention is laid on the minute details so that it can provide a great consumer experience (Gamble, John and Arthur A. Thompson 2014).
They have honed this quality perfectly and providing respect to the individual demands of the customers has created a distinct place for itself in the international arena. Importance was laid on developing the website of the organization in such a manner that the consumers can have a user-friendly experience.
Singapore Airlines is willing to buy new aircraft on times of economic downturn. At such a crucial juncture, the Airlines become ready to provide a great amount of discount to any such buyer who wants to help them out during the recession period. The policy of the Singapore Airlines is thus on the arena of investing when no one wants to spend a considerable amount on the new aircraft. They know the importance of customer loyalty and how this helps in gaining the support of the consumers. The retention rate is extremely high and by taking recourse to these strategies they want to get the returns of their business. The I.T. was previously handled by the internal employees of the Singapore Airlines however it is currently outsourced to reputed I.T. companies so that the arena of information technology can be handled in a superior manner (see Appendix D).
The marketing of the Singapore Airlines is treated like that of an investment and not like that of an expenditure. Marketing is thought of as an investment and that sets it apart from that of the other airlines company. Giving the utmost importance to the consumer instead of the product or service is extremely important for an organization (Shah et al., 2015). Singapore Airlines is customer centric and it involves the customer in all aspect of the business. Involving the customers would help the company to solve the important problems. Co-opting the passengers proves to be a great strategy and it has been adopted by the Singapore Airlines (Eden, Colin and Fran Ackermann 2013).
Internal organizational practices can go a long way in developing effective strategies for an organization. Previously not much effort was laid on the development of staff and of technical innovations. According to the new strategy developed by the Singapore Airlines, effort was laid on the training of staff so that the consumers are satisfied with the organization. Innovation and new use of technology was previously neglected however the new strategy of Singapore Airlines gives a great amount of stress on the factor of innovation. The new strategy emphasizes on the use of information technology that can help in increasing the efficiency of the service. The website of the Airlines was neglected earlier however according to the new strategy a lot of importance was laid on restructuring the website and provide user-friendly experience for the consumers (Testa, Mark 2015).
The customers can very easily check the schedules and buy the tickets. Consumers can find out about the important promotions and can even opt for the meal in the next flight. Using the IT in an effective manner can help in reducing the costs and enhance the level of service of the organization (Kimes, Sheryl E., and Jochen Wirtz 2015).Currently, cost-cutting was on the topmost agenda and importance is laid on the cutting the non-fuel cost and the IF functions are outsourced to reputed IT companies to help them in their working.
It has been noticed that the development of staff is done negligently and is carried out in a routine manner without paying attention to the details hence a lot of importance has to be attached to manner in which the training is carried out. Personnel should be kept in the organization who can see to the fact and introspect whether the employees who are delivering the training are doing this in the right manner (Slack, Nigel 2015).
The outsourcing of the IT should be handled carefully and it should be thoroughly checked whether the company who are being taken recourse to are acquainted with and updated about all the recent technology. Industry experts can provide help in guiding which company can be taken recourse to solve the issues related to information technology.
Managing the uncontrollable factors are necessary in order to manage an organization in an effective manner. Fluctuations in relation to the oil price and government interventions should be handled in an effective manner and it can prove to be an important factor for the success of the airline. Network growth strategy is important in today’s world and tie-up with other important carriers can prove to be effective in growing in the challenging business environment in today’s world. Selected partnership with that of small equity stake can go a long way in helping the organization to grow. In this manner it can stay ahead and prove themselves to be a global leader in respect to aviation (Heracleous, Loizos, and Jochen Wirtz 2014). They should involve themselves in larger investments and that would help their organization to grow. Larger stakes in the alliances like that of joint venture with the Tata Group or alliances with new domestic carrier can help the company to grow significantly. Alliance should be formed with that of brands of strong reputation (Akgun et al., 2017).
The SIA should choose the path that is adaptable and not very risky. They should be able to take the advantage of the benefits in relation to the global strategy. Alliances along with that of small stock can help Singapore Airlines because it may not be properly equipped to handle the political forces (Wirtz, Jochen, and Christopher Lovelock 2017).Owning that of a foreign airline would involve full-scale acquisition and it would involve an expensive stake.
A spreadsheet can help in tracking the strategic goals of the company where they are listed in terms of priority areas. There should be a tab that can help in identifying the status of the company over last five years. The goals and the objectives should be properly noted down and reviewing whether the company is on the right track can help in understanding if the strategy is on the right track. Fields like that of baseline data, the required resources and action plan for the different scenarios can help to understand the current problem and how they should be addressed (Redpath, John F. O’Connell, and D. Warnock 2017).The right people should be kept on the board who can help in the process of implementation of the plan. People with the relevant competency and skill who can provide help in the plan should be recruited by the company who will be able to assess whether the implementation of the strategies is being carried out in an effective manner (Komutanont, Warakorn Pom, and Guilherme Pires 2016).
The strategic plan should clearly state the person who will be responsible for the implementation of the plan and the person responsible for each goal. Document should clearly state the person responsible for the monitoring in relation to implementation of the plan. Decisions should be made on the basis of the results. The key questions that should be asked while evaluating a plan are whether the goals are being achieved within specified timelines (Sze et al., 2015). Another important question is whether the personnel have the adequate resources and whether the objectives are realistic. Frequency in relation to the reviews would depend on the kind of organization. The monitoring as to whether the plans are being implemented should be done on monthly basis. The Board of Directors should check status of implementation on quarterly basis. The status report should always be written down and trends in regard to the progress should be clearly documented in the course of the report (Huang et al., 2017).A risk management strategy can be made use of in order to mitigate suffering losses on account of fluctuations in the pricing of fuel. In order to achieve this objective a tool can help in lending protection against that of unforeseen event. It is mainly centered around the purchase of securities that moves in opposite direction as compared to the protected asset. The strategies that are used by the airlines company is that of hedging strategy that acts like a profit protection tool in order to help in coping with the rise in the price of fuel (Sezgin, Erkan and Deniz Yuncu 2016).
One of the common derivative that is used to hedge risk relates to future contracts. A contract goes on between that of the buyer and seller and it necessitates that both the parties should buy or sell asset at a price that is agreed upon at the time of transaction (Ghoshal, Anupama and Soney Mathews 2015).Airlines company can also make use of fuel sap that can help them in dealing with the fluctuations in the prices of fuel. Jet fuel swap points forward to the agreement between that of parties that helps in ensuring that a floating price is exchanged in return of a fixed price (Lin, Yi Hsin 2015).
Singapore Airlines is adopting different actions that can help in curtailing the emission of carbon. Fuel efficient technology has been integrated into the design and development of the aircraft. It aims in tackling the environmental impact by bringing in improvements relating to the operation of the flight. Bio-fuels should be deployed and noises and emissions should be reduced (Redpath, John F. O’Connell and D. Warnock-Smith 2017).There are different market base measures that make use of markets and economic variables in order to provide the incentives for the companies that are taking effective steps to combat pollution.
Advanced technology that are made use of by the manufacturers and are incorporated within the aircraft can help in reducing the emission. New satellite technologies should be incorporated that can help the airlines to work in an efficient manner (Komutanont, Warakorn Pom, and Guilherme Pires 2016).Another thing that can help in improving the emission is continuous testing. There are other sources in relation to alternative sustainable jet fuel that can meet the safety standards and serve as the effective replacement.
The aviation sector is going through an ambitious paradigm shift in the direction of sustainable operations. A commercial aircraft works for around 25 years that is followed by technical dismantling along with that of recycling. In the case of routine recycling, the owner of the airplane sends it to the dismantling yard where the components of the airplane are stripped off and recycled. Almost 40-50 % of weight in relation to the dismantled airport goes back into the distribution pipeline. A maintenance test takes place in the yard and checking of the systems is carried out (Sengupta, Nilanjan and Mousumi Sengupta 2014).
Aircraft draining is then carried out wherein the toxic materials are stripped away and discarded on the basis of the norms of the environmental regulation. An engineer who is qualified then identifies and removes the parts that are useful so that they can be re-used (Camilleri, Mark Anthony 2018).The interior components are then removed and the fuselage of the aircraft are torn apart by taking recourse to heavy machines.
Protection for the basic right of workers is extremely important for the growth of an organization. The relationship between that of the worker and the management is essential for long-term sustainability of the organization (de Boer, Evert R. 2018).The working conditions should be well-documented and it should be checked whether the working conditions are sustainable or not. Singapore Airlines make use of power solutions in order to reduce the consumption of energy (Huat, Chua Beng 2016).The buildings should be heated and properly air-conditioned by making use of geothermal systems. Singapore Airlines wants to become a great player in the arena of sustainable transportation fuel. It will make the future of aviation healthy and give rise to a healthy environment within the global sphere of aviation.
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