Case Study Of Singapore Airlines Limited

Vision and Mission

Discuss about the Case Study of Singapore Airlines Limited.

The Singapore Airlines Limited is one of the biggest airline companies present in the globe. The company has its origin in Singapore. The company was incorporated in the year 1972, and due to the monopoly at that time the company became a leader in the sector. The airlines have always had a bigger picture in mind and aims to become a leader in the market. This mission was achieved when the company got various aircrafts like Boeing 777 and Airbus A380 (Heracleous & Wirtz, 2012). Although the factors do not lie within the organization, they possess a huge power to influence the business of the firm (Anderson et al., 2015). Hence, if this is so, the organization needs to prepare. The external analysis of the given company will be done using PESTLE Analysis and Michael Porter`s Five Forces. An issue will be identified and analyzed along with recommendations for the same.

Figure 1: Highlights of the Group’s Performance

Source: (Singstat.gov.sg, 2018)

The mission of the Singapore Airlines is to:

• To be the best organization to work wherein all the employees are treated as the part of the family
• To attain the lowest fares as all the customers can fly with Singapore Airlines
• Create globally recognized brand in an effective manner
• Maintain the high kind of values along with high quality products and services with embracing technological advancements to reduce the cost. The embraced kind of technology is helpful in enhancing the level of services and reducing cost inn an effectual manner

The vision of Singapore Airlines are as follows:

The main vision of the respective Airlines is to be the largest low-cost kind of Airlines in the entire world and serving more than 2.5 billion individuals who are underserved with poor kind of connectivity along with high kind of fares

There are different kind of core competencies of Singapore Airlines that includes the following:

• It is one of the debt free Airlines Company in the entire air power sector and this helps them in being the largest participants in the low priced infinite global environment
• Price sensitive is the other core competency of Indigo Airlines along with time sensitive wherein the company has achieved cost advantage through usage of assorted kind of procedures that includes avoiding the in-flight kind of services
• Lastly, the operational kind of efficiency and innovative strategies has helped Singapore Airlines in setting up different kind of centralized operations and provides progress information as well

Strengths

• Singapore Airlines is one of the strong kind of global airlines that has proper backing from the government
• High visibility of the brand through different events sponsorship
• Excellent marketing and branding that has made the respective airlines having high recall
• It has good access to Europe and Asia

Weaknesses

• The respective airlines rely heavily on the international kind of traffic
• There is increasing competition that means the market share growth is less in the respective airlines

Opportunities

• They can tie up with different other airlines as this helps in increasing their reach and business
• Fleet is brand new as this helps them in increasing customer confidence
• More international destinations in order to leverage high value brand image

Threats

• The rise in the cost of the fuel affects the entire margin of Singapore Airlines
• The regulations of the government can impact the different kind of operations
• Increasing kind of competition is affecting market share of Singapore Airlines

The appropriateness of the SIA’s strategic response has helped Singapore Airlines in overcoming the different kind of crisis that includes that there was little inflow of foreign capital along with different kind of terrorist attacks as well. However, the performance management of SIA’s has helped in making them the first in the entire competitive market with innovations.

 The appropriateness of the SIA’s strategies has helped them in being the premiere kind of airlines and they had strong kind of balance sheet as well that has helped them in becoming the best in the entire market. Lastly, the organizational policies of SIA include rigorous kind of recruitment and selection procedures along with active seeking of the feedback of the different customers as well.

The PESTLE Analysis can be described as a strategic management tool which is used by many business organizations to analyze the external business environment.

• Political- The political scenario of the given country tends to have a huge impact on the operations of the airlines. Any change in the government policy of the country which tends to have an impact on the performance of the business of the airlines. The political stability of the country is defined as good because of the transparent system of the leader which encourages the anti-corruption laws and procedures. The country has recently scored 84 points on the corruption index which is quite less when compared to other developing countries but quite high when compared to countries like Switzerland, Norway and Denmark. Singapore has been the only country to reach the list.

Figure 2: Pollution causes by transportation

Core Competencies of Singapore Airlines

Source: (Singstat.gov.sg, 2018)

• Economical- According to Lin (2015), any internal airline company is generally subject to the condition of the different economies. Although they are affected by the economy of the nation company, varying effects of the external environment are also observed on the Singapore airlines.

Figure 3: The GDP growth by sector

Source: (Singstat.gov.sg, 2018)

• Socio Cultural- The socio cultural environment of Singapore tends to have an impact on the given market of the Singapore Airlines as it is a huge determiner of the preference of the consumer market, increase in the income of the target market (gov.sg. ,2018). As the given airline has been in function since a long period of time, the firm has the trust of the people and this shall tend to have a huge impact the trust invested by the residents of the country (Hillier, 2015). This works well for the given organization as people avoid taking the competitors offers and this leads to increased revenues for the given organization.
• Technological- With the advancements in technology, the way the airline operates has changed considerably. Automation and advanced machines will enable the organization and take them to new heights which help the airline company to compete with the different competitors who are present in the given market. Singapore airlines will make use of the new technology to make up for the increased cost of fuels (Wu, He & Cao, 2013). The use of automated technology which Singapore airlines has invested in will have a good impact on the profitability of the firm, however it has received huge backslash from the other communities for causing unemployment (Limited, 2018). 
• Legal- The legal environment of the airline company comprises of the legal and regulatory policies which the firm needs to abide by. The airline industry has a strict set of rules and policies which they need to abide by. As the given company is a pioneer of growth and development in the economy, the rules have been considerably relaxed; however certain restrictions on the given organization have been placed like the various environmental policies and limits on carbon emission (Joo & Fowler, 2014).
• Environmental- The environmental factor of the Singapore airline industry is a crucial aspect of it as it determines the different responsibility that the company has towards the development of the business and the society (Buono, 2015).The company realizes that it has certain responsibilities towards its consumer base and for this reason; it aims to provide them with the highest quality.Being the primary airlines, Singapore airline believes that it has certain responsibility towards the environment and has the duty of preserving the environment.

Figure 4: The fuel consumption data (Source: Singstat.gov.sg. ,2018)

Threat of new entrants- VERY LOW

The threat of new entrant’s factor throws light on the competitors present in the industry. The competition present in the industry might either encourage or discourage the new companies to enter the given industry. The airline industry in Singapore is extremely competitive, and thus the threat of new entrants is comparatively quite low. Furthermore, the cost of entering the industry is very high which keeps the new entrants away (Singstat.gov.sg. , 2018). Asia Airways, silk air, scoot and silk are some of the competitors of the Singapore Airlines.  

Intensity of Industry rivalry- VERY HIGH

A business needs to be aware of its competitors in order to understand whether it is performing well or not. The same is the case for Singapore Airlines where it becomes extremely important for the business to analyze its competitive environment to ensure that the firm is leading, globally, the number of mega flyers have increased considerably which has become an area of concern for Singapore Airlines (Pearson, Pitfield & Ryley, 2015). However, in Asia the company has Jetstar Airways, Silk air and Scoot. However, Singapore is the market leader. In the low-cost sector, Singapore airlines has been losing out on potential routes and clients because of the no frills concept of the new low cost travel airlines like Tiger, Firefly and Cebu Pacific have taken the market (Jeng, 2016).  

Threat of substitutes- LOW

The threat of substitutes for Singapore Airlines is comparatively low. As recent trend suggests, travelling in cruise has become popular which provides stiff competition and threat. The high-speed railway between Singapore and China serves as a cheaper option. However, it is a concept for the future.

Bargaining power of Buyers- MODERATE

The buyers are the customers who are the potential passenger’s o the airline. The buyers are exposed to a wide variety of options with respect to the various carriers available and therefore. It can be stated that to a certain extent, the power is high. However, the quality services provided by the airline are difficult to copy (Whyte & Lohmann, 2015).  However, companies like Cebu Pacific and Air Asia provide no frills travel which is very a barrier for Singapore Airlines.

Bargaining power of Suppliers- HIGH

The primary suppliers of the given industry are the providers of raw material and the fuel companies. The suppliers tend to have a major impact on the company`s business and determines their strategic mapping. The aircraft part suppliers are also a supplier. The supplier power is very high in Singapore. Although the airlines has a greater market, share the suppliers providing good quality products win the game. As various other airlines have now entered the game, the suppliers have now strengthened their position in the given market.

SWOT analysis of Singapore Airlines

The competitive conditions in the airline industry have become quite challenging. Fuel prices and security concerns are already an issue and furthermore the risk of long range airline also serves as an issue. SIA has been aiming to seek approval to fly from various hubs like pass from Europe to Australia. The competitors on the Singapore Airlines heels are quite competitive and offer high quality services. For instance, Emirates has priced the tickets lower than its competitors which then is important factor for the passengers.

The company has been facing issues with respect to the employees as well. The number of employees has been affecting the profitability of the firm which would go a long way affecting the performance of the given firm in the industry. The price of fuels is also an issue being faced by the given industry. The price has had an additional impact and burden on its finances.

Various competitors and critiques have also complained that the position of the company is good due to governmental factors and not its own capability. As it is a developed organization and contributes greatly to the benefit of the country, the country ensures that it proves adequate facility to the given organization (Heracleous, 2014).

After analyzing the varying issues it can be stated that the following recommendations can be adopted by the firm.

• Human resource management strategic change- As stated earlier the company has already employ various people who are not necessarily required by the organization and this is impacting the financial position (Pearson, Pitfield & Ryley, 2015).
• Investing in low cost sector- The Company can diversify its operations into the low-cost sector which will then help the firm to cater to the needs of the untapped market. Singapore Airlines has adopted various strategies but the given strategy will go a long way in helping it to expand in a new market with challenging requirements (Taylor, 2013).
• Diversifying product line- The Company can expand and inculcate various other aircrafts and travel services which could adopt the ecofriendly notion. This way the firm would be fulfilling its corporate social responsibility aspect seriously along with making something so valuable that the future of airline industry is altered completely altered.

Therefore, from the given analysis it could be stated that the given company Singapore Airlines, has been doing well since the beginning of its operations, but recently it has been facing certain problems with respect to its operations and outside factors alike. The report discussed various aspects of the organization like an external environment analysis using Michael Porters Five forces and PESTLE.

References

Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., & Cochran, J. J. (2015). An introduction to management science: quantitative approaches to decision making. Cengage learning.

Buono, A. (2015). An Introduction to Management Consultancy. Academy of Management Learning & Education, 14(1),.

Heracleous, L. a. (2014). Singapore Airlines: Achieving sustainable advantage through mastering paradox. The Journal of Applied Behavioral Science, 50(2),, 150-170.

Heracleous, L., & Wirtz, J. (2012). Strategy and organisation at Singapore Airlines: achieving sustainable advantage through dual strategy. In Energy, Transport, & the Environment (pp. 479-493). Springer, London.

Hillier, J. (2015). Roethlisberger Memorial Award Goes to “Let’s Burn Them All: Reflections on the Learning-Inhibitory Nature of Introduction to Management and Introduction to Organization Behavior Textbooks. Journal of Management Education, 6(39), 681-683.

Jeng, S. P. (2016). The influences of airline brand credibility on consumer purchase aintentions. Journal of Air Transport Management, 55, 1-8.

Joo, S. J., & L. Fowler, K. (2014). Exploring comparative efficiency and determinants of efficiency for major world airlines. Benchmarking: An International Journal, 21(4), 675-687.

Lee, B. L., & Worthington, A. C. (2014). Technical efficiency of mainstream airlines and low-cost carriers: New evidence using bootstrap data envelopment analysis truncated regression. Journal of Air Transport Management, 38, 15-20.

Limited, S. (2018). Singapore Airlines Official Website | Book flights from India. Singaporeair.com. Retrieved 26 April 2018, from https://www.singaporeair.com/en_UK/in/home

Lin, Y. H. (2015). Innovative brand experience’s influence on brand equity and brand satisfaction. Journal of Business Research, 68(11), 2254-2259.

Pearson, J., Pitfield, D., & Ryley, T. (2015). Intangible resources of competitive advantage: Analysis of 49 Asian airlines across three business models. Journal of Air Transport Management(47), 179-189.

Pearson, J., Pitfield, D., & Ryley, T. (2015). Intangible resources of competitive advantage: Analysis of 49 Asian airlines across three business models. Journal of Air Transport Management(47), 179-189.

Singstat.gov.sg. (2018). Welcome to Statistics Singapore. Retrieved April 26, 2018, from https://www.singstat.gov.sg/statistics/visualising-data/charts/visitor-arrivals

Singstat.gov.sg. (2018). Welcome to Statistics Singapore. Retrieved April 26, 2018 from https://www.singstat.gov.sg/statistics/visualising-data/charts/visitor-arrivals

Taylor, B. W. (2013). Introduction to Management Science (Global Edition ed.). Virginia Polytechnic Institute and State University.

Whyte, R., & Lohmann, G. (2015). The carrier-within-a-carrier strategy: An analysis of Jetstar. Journal of Air Transport Management(42), 141-148.

Wu, Y., He, C., & Cao, X. (2013). The impact of environmental variables on the efficiency of Chinese and other non-Chinese airlines. Journal of Air Transport Management, 29, 35-38.

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order