Singapore international airline has started its journey as Malayan airline in 1947. It was joint venture airline between the two governments of Malaysia and Singapore. It served primarily in the south East Asian region. Singapore Airline was born in 1972 after the independent. Singapore airline faced many difficulties to get the competitive advantages. There were no domestic routes to serve, it was forced to straight away start competing with international airlines for routes, getting right to use to airports, securing flight slots and landing rights, and attracting a new customer base.
They built on branded service/ products differentiation strategy from 1972. Modernism, high quality technology, quality services for instant hot meal in flight is introduced by SIA and brilliant customer service were the major drivers of the brand. The company started growing extending services cargo, operates more than seventy destinations, SIA engineering company and SATS. They have young fleets and most technological commercial flights and other subsidiaries’ are Skil Air, Trade winds. They have a strong relationship with the communities, such as education field, needy, handicapped children through sports, arts, and educational supports.
Question 1 Strategic role – identify / analyze The mission statement of the company Strength and weakness, thread and opportunities to the organization Answer Singapore International airline Mission statement “Global company for providing air transportation services of the highest quality and to maximize returns for the benefit of its shareholders and employees” They are focusing their current services providing good quality services. No differentiation in treating the customer classes. The Singaporean girls are the customer service (Singapore girls symbol is an indication of the quality customer care and service).
Their relationship with the passengers (well treatment, good communication, and hard works on board) and expanding services globally owns many subsidiaries. Maximize the returns and benefit its ?shareholders and their employees. SWOT analyzing areas of Singapore airline Analyzing internal factors Strength • Singapore international airline culture is a corporate culture, their corporate culture encourage the labours to improve cabin services. The employee unions are clearly stabled in their work. They classified their employees unions according their employment.
Company culture leads the SIA to get the competitive advantage. According to businessweek. com Michael Tan, SIA’s Senior Executive Vice-President (Commercial)’s statement their company culture is competing in the marketing lead front. • The Singapore airline’s image and reputation are shown high impact on the people in Singapore and the passengers who are from worldwide locations love to fly on the SIA. This is strength of the company. Their services toward their regular customers are encouraged the people to switch it back to SIA. • Structure of the SIA is strong enough.
They are having subsidiaries’ this wills to give more profits and they formed subsidiaries in Singapore out of Singapore. They are providing not only passengers transporting services but also they are providing cargo services, around eight countries. SIA has fully owned no frill airline services. These structures are holding the SIA’s market share in high level. • Employees are the asset of their strategic. They are recruited from the global labor markets. The pilots also recruited from the global markets. Around 30000 specialized in their fields. SIA is getting high effective and efficient work from their employees. They have established hubs and subsidiaries in many countries it is strength of managing their resources effective and efficiency. It will increase the profit of SIA. • SIA has the strong experience of more than fifty years from the beginning of the MSA. Experience is also strength of SIA. Because it is widely known its services in time based. It will have good experience management and managers. Experience came up with new ideas to satisfy their customers. • Online ticket booking reduce the operational cost. For instant it will reduce the cost forming agency offices and marketers cost.
It will widely cover the people. Customers no needs to search for SIA office just click and book the ticket. • SIA has a big operational capacity it is strength of the company. It has hub in Singapore and widely giving its services to many countries and get more income. It will get fuels in from its subsidiaries’ which are located in other countries. Because petrol cost in Singapore is high. It will reduce the operational cost. • SIA market share report in 2002 December is 18. 47 per cent. Recent report is around 25 per cent. The growth of the market share is strength. No language dependent in Asian region customer services. So people who are in Asian region like travel on SIA, because of their good customer services. It builds the SIAs market share in Asian region. • SIA won many awards. Weakness • Less moral among different staff, their company culture they classified staff unions according to their employments. Different union have different moral. For an instant according to the business article, a staff was slapped by another staff in front of many passengers. It will lead to labor union strike. • Their air port location is a weakness because.
It is high security and a busy airport. High tax and high penalty for delay takeoff. It leads the operational cost high. • Online marketing system has a problem did not give the clear instruction of the locations. Majority of people search the location according to the country not city. For instant I am going to visit to Malaysia this is my first journey to Malaysia and first time I am going to book online on SIA. I’ll search Malaysia first. But the booking they only placed Kulau lumpur. So this online booking only support to the regular customers it doesn’t support new flyer.
Analyzing external factors Opportunities • Singapore people are thinking SIA is their asset, they are commenting on SIAs weakness and they are giving their own ideas to improve customer services. For an instant, according to business news, a Singaporean passenger flies on SIA she found a problem Singapore girl (cabin crews) they have language dependent on communication. She comment to the management, due to her argument management came up with a solution, when they recruit the girl they clearly select the girl they have no language dependence in Asia region. SIA makes partnership with many world top hotels, credit card companies and Telecommunications Company. For instant KrisFlyer members who are also Samsung credit cardholders, Car rental companies. What is the advantage is they are going to give combined services to the customers. There are two opportunities customer will get advantages and these companies will get regular customers. SIA will get same profit and giving quality services to its regular customers. • Singapore government policy is an opportunity to SIA.
High tax for AirAsia bus which are carrying passengers from Johor air port. This is an opportunity for SIA, because AirAsia planned to reduce it operational cost through landing in johor. It will reduce the high tax to land on Singapore airport. If they reduce their operational cost they can reduce the travelers cost. This will pull down the SIAs Asian region market share. • So the government policy increases the operational cost of the AirAsia. This is an opportunity the SIAs market share keep growing in Asian region. The two major leading commercial aircraft manufacturers known as namely Airbus and Boeing are power full suppliers to the SIA. What are the opportunities’ SIA a will get from it. The customers of the SIA will satisfy with the flights. SIA will get the high quality, high technology flights to lounge in the service in first. • World widely they are getting political supports educated people support because “SIA practice good corporate citizenship actively through the support of arts, sports and educational initiatives, both locally and overseas.
They also committed to helping the privileged, sponsoring program for the needy, involving handicapped and protesting environment”. It is opportunity to SIA. • Free media publicity, Singapore international air won many awards. It urges the journalist to write about SIA. Threats • Its main competitors are Cathay Pacific Hong Kong airline, Japan airline, and Malaysian airline, their new inventions and new policy and their promotions towards Asian people reduce the growth of SIAs market share. Even though the no – frill airlines are catching their customers from SIA.
For an instant AirAsia and the Johor airport, AirAsia planned to land on Johor and it decide to transport their passenger by bus from Johor to Singapore. It will reduce the operational cost and they can catch more customers from Asian region and Australia. • Singapore International Airline has many subsidiaries world wide. They are invested widely. For instant think of Sri Lanka, their economy is going down and down because of the war. This will affect the invested companies in Sri Lanka. The instability of the economy will lead lack of storage advantages.
For instant oil storage, the oil price is not in stable, it is going up and down, cannot store oil/ fuel, and high questions from the suppliers. • Introducing new technology will lead operational cost and staff training cost. • Government taxation, they are paying high tax and high penalties for delay are very costly it makes the return small and flying price pre mile will increase. • The international economy non stability is a thread to SIA. War in Iraq hit the oil price. The economy falling will show non stable pricing for flying per mile. It will lead the people unhappy with the company.