The purpose and objective of this report is to look into the business and management strategies of Singapore Airlines. Thing that I am looking into would be the various challenges and threats that Singapore Airline face and also I will be sharing on how and the type of strategy they used to survive and become on top of the competition. I am using SWOT analysis to analyze Singapore Airlines strategies, to give an in-depth understanding on what are the contributing factors that helps or cripples the business.
Table of Contents
Introduction 3
Strategies of Singapore Airlines
Service strategy 4
Human Resource Management and Marketing strategies 5
Competitive challenges faced by Singapore Airlines 6
How did Singapore Airlines outstand their challengers 7
Star alliance 7
Cargo alliance with Lufthansa 7
Cost reduction 7
Problem Singapore Airlines might face in the future 8
SWOT analyze of Singapore Airlines
Branding 9
Quality of services 9
Weakness 9
Opportunity 10
Threat 10
Analysis of SWOT 10
Recommendation/conclusion for the report 11
References 12
Introduction
A brief introduction to Singapore Airlines on how it is form and what difficulties the business faced initially.
Singapore Airlines was within 1947 with Malaysian Airlines (known as Malayan at that time), it was a joint venture between your Malaysia and Singapore government, putting their service mainly in the South East Asia region. Singapore Airlines is considered one of the world's best airlines travelling up to 93 destinations and 38 countries.
After Singapore Separated from Malaysia in 1965 and both governments coincide to set up different airlines. Thus, Singapore Airlines was created in 1972.
Different from almost every other airlines, Singapore Airlines was at a disadvantage position as compared to them. What can cause this is because it is due to that Singapore Airline is not given the decision of domestic routes to serve, as Singapore itself it too small, so Singapore Airlines is force to contend with international airlines for routes as soon as it starts its business. The things to compete for are like getting access to terminals, securing flights slots and landing rights, and also wanting to draw in a new customer base. Nothing like most state-owned entities, Singapore Airlines was force into to massive competition from the start of its business. Using this as motivational factor, it led and brings Singapore Airlines competitive spirit to the incomparable level and also the dedication to produce a good branding of Singapore Airline be much better than every service sector. These factors have stayed within the business acting as the core and since then, it has shown to serve the airline perfectly, allowing them to overcome any challenges.
It was shown that Singapore Airlines earned a profit of $253 million in April to June 2010. This was a whole change of $560 million from the loss of $307 million recorded in the same quarter this past year. [1]
Strategies Singapore Airlines used to accomplish success
Service Strategies
Singapore Airlines is known as one of the greatest and popular brands in the international business world. Singapore Airlines is also well respected as an airline that with the capacity of providing one of the better flight services on the globe. They are not only popular for its brand but also on its service quality, beating other famous airlines such as Fly Emirates, Qantas and British Airlines
The first aspect that I'd share on is approximately the service process. This is a factor which has always has been presenting at its best by the complete cabin crew for the passengers up till present. The service has been personified in the Singapore girl figure, which is the environment stewardess of the airline. The Singapore girl constant visual advertising slogan applied to depictions of stewardesses of Singapore Airlines dressed in distinctive our Malay ethnic costume sarong Kebaya. This has been representing as the icon of the service guarantee and the exciting and unforgettable flight experience.
Secondly, what contributes to the Singapore airlines glory is their strategy where they can be always keeping the impressive edge particularly on the in-flight services. The Singapore airlines is the first airlines that brings in the non-public system of the entertainment system and video on-demand for every seat. It is called the Krisworld. After that, also, they are the first airlines who introduce the seat configuration that brings maximum comfort to the passengers. Recently, in addition they introduce the first suite class in the commercial airlines which is the A380, a class that designed just as the 5 star hotel room, finished with the private compartment which also brings the comfort level even higher.
Thirdly, Singapore airlines regularly use new airplanes for just one purpose. It really is to enable a lower cost of operational as it is cheaper and better to maintain younger airplanes as compared to older airplanes. This can help in reducing the price for Singapore airlines in the financial aspect.
Using those three strategies point, the wonderful service, the continuity innovation, and the technology superiority, this is the reason why Singapore Airlines is often remaining as among the best airlines.
Human Resource Management and Marketing Strategies
The Singapore airlines make use of a Human resource management policy where productivity is closely related to motivational policies for employees to provide better service and productivity. It really is to state that higher income particular are much more likely than low income particular to report them at higher sense of satisfaction. This practice is found in Singapore airlines where human resource management in Singapore airlines approaches viewing performance management as to further improve the particular performance through assessing past performance and rewarding them in purely financial terms.
The most important and different marking strategy exploited by Singapore Airlines is dependant on their quality of image and service of Singapore girl. The Singapore Girl is vital part of the brand image. Among the Singapore Girl core value is having the mindset of approachable customer orientated staff delivering better quality of customer service. This has become the main competitive advantage for Singapore Airlines, because Singapore Girls can be considered as the frontline behind the success of the achievement. In order to retain its customers, staff trainings and development programs have been implied to the employees. To guarantee the professional service among employees, there is also to attend language courses and attitudinal programmes. Global customers are high because of the knowing of the Singapore Girl image.
The effective marketing strategy helped Singapore airlines to reduce their cost pressures in order for them to compete in the airline industry through value adding targeted market division. Using the Singapore Girl as an icon for Singapore airlines has boost Singapore Airlines competitive position in the industry.
Competitive challenges faced by the Singapore airline
Airline industry has seen many changes and competition are better and fiercer than ever. Which range from business and economical class flights to low-cost flights and the coupled with economic downturn, your competition between your airline industry is remarkably high. Some of the low-cost flights operators such as Ryanair, an Irish low-cost airline, tend to be more flexible in giving an answer to increase the cost pressure on profitability which set a threat to Singapore airline procedures and growing.
Singapore airlines acted to these pressures and so invested in newer technology to be able to keep its cost levels while trying to not sacrifice any customer support quality in order to accomplish profitability. One concern caused at this time in considering changing the consumer behaviour and attitudes towards flying in Singapore Airlines are related to what extent Singapore Airlines will be able to preserve and enhance its brand image of customer support. Continuous cost pressure such as increased in fuel costs as well as operational costs related to increased security will continue to be an effort for Singapore airlines in preserving profitability in competing with budget operators. If budget operators to date have been either locally or regionally based should operators like Ryanair by expanding to provide international journeys, this will create huge threat to Singapore airlines in conditions of competition for long-haul passengers.
Due to the monetary downturn, individuals are leaning towards the area of low pricing of low-cost flights. Some notable rivals that Singapore Airlines are facing would be Cathay Pacific, Ryanair and the Malaysian Airlines.
How did Singapore airline outstand their competitors?
Singapore airlines increased its network via code-sharing with members of Star alliance marketing partnership including Lufthansa and united airlines. Code-sharing allows airlines to sell tickets using one another's flight which will offer service to additional destinations.
Star Alliance:
Partnership with star alliance allows Singapore airline to develop and improve operations, facilitates and processes and able to provide access to new functions as well as new knowledge and new technologies. The major airline part of star alliance marketing partnership which includes Lufthansa, united airlines, Thai airways and Singapore airlines. These legal agreement linkages are designed to meet the several needs for expanding worldwide through marketing linkages, without acquiring the costs involved in major fleet investments.
Cargo alliance with Lufthansa:
Partnership between Scandinavian Airlines's cargo, Lufthansa and Singapore Airlines where this procedure marketed under the brand name 'WOW'. Expands are created including the carrier's services as well as information technology and cargo handling. This alliance will help both airlines to expand their market to even wider area over the world where they didn't have it previously.
Cost Reduction
Singapore airline has been seeing an increasing of its profit by starting new alliances with an increase of other airlines. SIA has benefited in three ways. The first is the success of getting the economies of scale through the joint businesses of air and ground services. Secondly, scope which is through increased reach and efficient connections and lastly, the increased in traffic density through network expansion and additional traffic feed.
Problems Singapore airline might face in the future
Singapore airlines produce an alliance with united airlines where it is now operating under bankruptcy protection. This alliance may face difficulties in the future and also have a reduction in the market share in america sector. If something eventually the alliance, it'll affect Singapore airline greatly. And there will also be bigger carriers that'll be developing from each band of alliances. Big giants of the airline industry are combining which will soon turn into a threat to other airlines.
Lack of clear goals and objectives
Singapore Airlines might also face the situation of having somebody who lack of clear goals and objective. It had faced similar issues with the American carrier delta and Swiss air, thus had to leave the tri alliance. Reasons for such failure are mainly is due to different objectives, inability to share risk and lack of trust towards the several companies.
SWOT analysis of Singapore Airlines
Strength
Branding:
Singapore airline established fact for its branding from all over the world. Singapore airline is the the one which gets the most profit internationally. It is the strong brand management that driven mostly by its top management. Singapore airlines brand is exclusive in the way that the boardroom takes commitment of leadership of the brand strategy unlike a great many other airlines. The Singapore Airlines keeps improving innovation as an important area of the brand, and the ambience and experience are fundamental factors of the success today.
Quality of service:
The quality of service of Singapore airline plays an extremely crucial part in the effectiveness of the company. Behind the professional performance of cabin crews, Singapore airline gives their entire cabin crew rapid trainings to keep their high quality of service. They constantly educate their cabin crew including Singapore girl, in order to fulfil the top notch airlines service standard. This is why Singapore airlines is usually at the top at customer satisfaction survey about in-flight service observed by the independent institution.
Weaknesses
Heavy, on-going investments and high costs.
Singapore airlines has dedicated itself strongly to positioning branding name and quality of services, and to be able to keep up the high standard, it is of a high financial costs. By purchasing of new and young aircrafts, it proves to have a bigger fleet space and thus will create a higher parking and maintenance cost. Each one of these expenditure will be a weakness in down times.
Opportunities
The expansion into key aviation markets has provide Singapore airline to break through its limited space when compared with before, which will increase market shares worldwide. Alliances, code-sharing with other aviation company increases Singapore airlines possibility to provide better services and also to cut costs.
Threats
After terrorist attack on September 2001 in united state, it has been confronted with a tremendous decline in international tourism. The airline industry became more competitive in Asian region as there are more than thirty country operate around thousand of airline company. Singapore airline is one of the operating Asian region as well as in Europe and American region. This has affected the travel density for Singapore airlines.
The outbreak of H1N1 is also an enormous threat to Singapore airline as people are in concern with travelling overseas because of the infection rate and highly contagious nature of the virus. And to add on to the bad news and misfortune, one for our Singapore airline flight attendances is also first cabin crew to be contracted with H1N1. This has tremendously afflicted the airline.
Analysis of SWOT
Opportunities of Singapore airlines can help to overcome their weaknesses. Their weaknesses is principally high costs and heavy, on-going investments. By having the chance to partnership with others this help to cut cost. Alliances, code-sharing with other aviation company increases Singapore airlines possibility to provide better services and also to cut costs. Singapore airlines threat can even be overcome by the business strength which is quality of service and branding. The competitive benefit of Singapore airline has achieved sustainable competitive advantage. Singapore airlines have consistently outdo its rivals since the time it was created, and still retaining high standard and services for customers.
The major factor of Singapore airlines competitive success that it were able to drive skilfully between poles that a lot of companies think of as different. This includes delivering best service in a cost-effective way, at cost levels lower they are much like budget airlines on the planet.
Recommendation/conclusion for the report
What recommendations I've for Singapore airlines are as the following.
I think that Singapore can use the most amount of benefits by the prevailing alliances and equally contributing to the partners by services or other benefits. If not, Singapore airlines can also prefer to have fewer partnership in the industry and add more to the destination, more aircrafts and customer support which will make them sustain their position to be the best. I assume that they have to continue working on its branding and providing excellent service which is intended to maintain customer satisfactory level, and continue having strong workforce at the trouble of costs.
They should maintain what they are actually like their branding name and quality of service and if they were to switching to different market, this might provide risky results if their strategy fails. This can prove fatal to the business as there are also others that are also have established their names on the market. Through researching on Singapore airlines, it seems if you ask me that the core of their success soon would be reliant on their innovativeness, this is because they have come to a point where all the airline are providing almost a similar thing. Things like technology can be easily obtain by another different companies.
