Consumer Service Retailer of Singapore Airlines-Free-Samples

Question: You are required to prepare a strategic analysis for a consumer service retailer of your choice in Singapore. Write your answer in the form of a report. Answer: Introduction The Singapore Airlines is one of the highly regarded airlines by most travellers and competitors in the global airlines industry as the best airlines to use when travelling due to its best services and customer relations. The airlines started operating in the year 1972 after the Malaysia-Singapore Airline (MSA) split into Malaysian Airline System (MAS) and Singapore Airlines (SIA) (Air Transport World 2014). The company is well known for its excellent customer service, commitment to the maximization of shareholders returns, uncompromising adherence to safety and security and young fleet that have given it competitive advantage in the industry offering three classes of travel; Economy, First and Business classes. While onboard they provide services such as relishing meals, entertainment on Kris World and it also provides online booking. The company has recorded a consistent rise in its performance indicated by its increasing market share and returns making it to win numerous accolades for its outstanding services (Heracleous and Wirtz 2012). External Analysis This is a form of analysis which focuses on a companys environment analyzing how the environment influences the operation of the business. The analysis helps in depicting both the opportunities and risks that a company is exposed. PESTLE Analysis PESTEL abbreviates the Political, Economic, Social, Technological, Legal and Environmental aspects of a business organization. The following PESTEL framework therefore illustrates the forces that affect Singapore Airlines. Political The political temperatures in a nation often have significant impacts on the operations of the airline industry owing to the fact that nearly all nations have a national carrier. Since the national carrier symbolizes the country, the airline receives significant support from the government which enables to smoothly carryout its operations even amidst challenges (Wirtz et al. 2008). Economic The airline industry operates across different national economic boundaries and due to their high level of resource intensity; they are prone to the prevailing vagaries of both national and international economy. Singapore Airlines is faced with the threat of the rising fuel costs resulting from the continuous political unrest in the Middle East which have made the fuel prices to rise to unprecedented levels (Chan 2000). Social For a long time, long distance travelling has been the preserve of the wealthy in society but with the recent increase in disposable income among most individuals, such faraway destinations travels have become affordable. Additionally, consumer preferences has been shifting from the original premium travels to the current low cost travel styles as noted by the increase in the number of low cost carriers (The Times of India 2014). Based on the changing market trends, Singapore Airlines which has been a premium carrier have started offering lows cost travels to attract the new market. This is evidenced by their decision to expand their shares holdings of Tigerair which is a Southeast Asian low cost carrier despite the absence of profitability (Chan 2000). Technological In a highly saturated passenger travel especially in the premium market position to which Singapore Airlines belongs, technological innovations play a vital role to counter the stiff competition. Due to technological advancements in the industry, Singapore Airlines has one of the youngest fleets and is the first airline to adopt the use of new innovations such as the use of seatback entertainment systems, headsets and reclining seats (Steven 2010). Legal Making changes to a countrys regulatory framework often have great impacts on national carriers and these often result in adopting new operation strategies. The act of terror in September, 2001 for instance contributed to the implementation of some regulatory changes in which passengers have to undergo screening before being allowed to travel (Chan 2000). Environmental There has been a rising concern among most passengers for green services integrated with their corporate social responsibility (CSR). However, Singapore Airlines have been quite slow in responding to the new customer demands. Porters Five Forces for Singapore Airline There are five forces which impact the performance of Singapore Airlines which determines the probability of its market success. These forces are; The Threat of New Entrants Singapores current business activity is dominated by long-haul passenger airline business which has resulted into weak threat of new entrants. Additionally, the investment in airline industry requires large capital base with corresponding long lead times to recover the investment thereby making it quite difficult for new firms to enter the business. However, there are few entrants in the market in which Singapore Airline operates and they include Air Asia and Jet Star (Cook, Tanner and Lawes 2012). Intensity of Rivalry The airline industry is often characterized with some level of internal intense rivalry which usually occurs on a route-by-route basis. Despite the fact that routes can be serviced by variety of airlines, the rivalry is usually quite intense forcing companies to either adopt price cutting strategies or provide high quality services to expand their market share. Based on its performance resulting from high quality services has enabled Singapore airlines to capture the Kangaroo Route (Wang 2014). The Threat of Substitute Services The threat of substitute services to the airlines short-haul element of the business s moderate resulting from its business structure. Globalization has led to the rise in investments in transportation links that exist between of the geographical hubs among whom are served by Singapore Airlines. The Bargaining Power of Customers Generally, the bargaining power of clients in the airline industry is quite low due to the low switching costs. The low switching costs have resulted from the decline in high street airline offices and the proliferation of the internet (Chan 2000). Most airlines are however debating on increasing the switching costs through such strategies as loyalty schemes. The Bargaining Power of Suppliers In most instances, the airline suppliers have a relatively strong bargaining power since most airline fleets are supplied through a duopoly market structure. On the other hand, the airline engines are supplied through oligopoly markets. With such a few number of suppliers in the industry, most producers can easily dictate the prices of their products. Internal Analysis Tangible and intangible Resources Tangible resources are those assets which can be accorded monetary value and can be physically measured. Some of the Singapore Airlines tangible resources include Changi Airport which contains facilities such as hanger, catering center and hangar (Cook, Tanner and Lawes 2012). Singapore Airlines currently have an estimated 22% 747-400 aircrafts out of the total global aircraft production. These planes have higher flying range, with efficient fuel consumption and quieter cabin than most that found in most airlines in the industry (Wang 2014). The company further has a comprehensive human resource management system in which the firm provides extensive training and motivation to its workers to enhance their skills and knowledge. Intangible resources are classified as the identifiable resources which cannot be accorded monetary value neither can they be seen, touched or be physically measured (Steven 2010). By estimation, Singapore Airlines as by the June 2017 amounted to about $ 309 million. These intangible resources include Goodwill. SWOT Analysis Table Strengths Weaknesses -Singapore Airlines has the youngest fleet which has the highest fuel efficiency -Have recorded consistent growth in sales and profits in the last two years. -The company is an innovator -Having share holdings in Tiger Airways -Having some restrictions to access certain routes Opportunities Threats -Expansion of its partnerships -Having a promising business growth in India -Experiencing low cost operations by Scoot -Having a constant steady growth -Consistent fluctuations in the aviation fuel -Competition from other carriers like British Airways outside Middle East Possible Strategic Options Option 1: Adoption of Dual Strategy on Global Market Over the years, Singapore Airlines has remained a legendary in the industry owing to its client appeal which led to her winning the prestigious Cond Nast Travelers Readers Choice Award for remarkable twenty-two times. Essentially, the firm emphasized the elements that differentiated it quality service at low costs and these have always given it a competitive advantage in the market. Markides and Sosa (2013) refer to this strategy as a repeatable model where the company ensures that the two elements go hand in hand. It maintains its service levels through proper recruitment, intense staff training, regular innovation and integration of well-developed organizational culture. It also supports low cost for its products and services through the use of rigorous standardization protocol, lower maintenance costs and outsourcing some critical facilities such as payroll and ticketing (Markides and Sosa 2013). To remain competitive in the global market which is characterized by cut throttle competition, SIA must adopt its successful dual strategy as a global player. According to Heracleous and Wirtz (2012) since becoming a global actor is no longer considered as a choice for the airline, it must use its adaptable strategy to cushion itself from potential risks and losses. Evidently, the adopted dual approach is consistent with the carriers strengths and therefore using it in a global strategy would enable the firm to reap most of the benefits from the volatile market. Option 2: Lowering Risks and Managing the Uncontrollable While it is true that the uncontrollable remains unprecedented and unplanned for, their effective management is essential to the success of the business. For instance, the impact of war, fluctuations in the oil prices, local epidemic and even government intervention is always essential for success in an airline industry (Olienyk and Carbaugh 2011). Thus, to properly manage the uncontrollable it is important that SIA engage in the formation of partnership and alliances to ensure the growth of its network. Wu (2016) observes that through these agreements the company will diversify its routes to different market regions and this allow proper understanding of the dynamics of the industry from various perspectives. Its worth mentioning that while the approach of alliances presents the best way for the company to stay ahead in the aviation sector, it must indulge into manageable investments with corresponding lower risks. Given that exploiting new market regions through a partnership with other large airlines, Singapore Airline is exposing herself to major international threats and risks. It must mean therefore to protect its safe economic zones; the company must strategically invest in lower risk ventures especially in a new market just as a way of protecting its interests when the market is not as welcomed as anticipated. Another way of lowering the potential risks is by evaluating and validating a potential company for a partnership before engaging in business with it (Pearson and Merkert 2014). This is vital to ensure that the firm only makes alliances with those companies that have success stories and good reputation in the international market. Recommendation Strategy The best strategy that Singapore Airlines should adopt to further expands its sales volume and profit margin in the global market is the first option which is the adoption of dual strategy on the global market. Based on the companys SWOT analysis, the firm should maximize on its strengths to enhance its global competitiveness to position itself strategically as one of the best and admired airlines in the global airline industry. As observed by Heracleous and Wirtz (2014), Singapore Airlines should put in place every viable strategy that propels it to keep its superiority and stay ahead of the stiff airline competition in the global market irrespective of the prevailing economic conditions. The company should also strive to maintain its competitive edge in the industry despite the strategies that are employed by its main competitors such as British Airways. The company needs to have an in-depth understanding of the business strategies used by some of its leading competitors which include Cathay Pacific, British Airways, and Virgin Atlantic to enhance the quality of services of its travelers while on board (Heracleous and Wirtz 2012). In understanding the business strategies of its competitors, the company should capitalize on the weaknesses of its competitors and through its domination of the global markets, Singapore Airlines will create a conducive avenue for foreign investments (Heracleous and Wirtz 2010) Overall Conclusion Singapore Airlines is viewed as one of the best airlines globally enjoying a significant percentage of the global market share. Based on the changing market trends, Singapore Airlines which has been a premium carrier have started offering lows cost travels to attract the new market. Based on the firms external and SWOT analyses, it is quite evident that the company enjoys considerable market share and competes favorably in the global industry. Despite the various challenges in the global economy, Singapore Airlines has maintained its level of service quality, ethical standards and Corporate Social Responsibility (CSR). In summary, therefore, improving and restructuring the firms business strategy will further propel the company to greater heights in the global airline industry. References Air Transport World. 2014. Singapore Airlines boosts Tigerair stake. Online at https://atwonline.com/finance-amp-data/singapore-airlines-boosts-tigerair-stake . Chan, D. 2000. The story of Singapore airlines and the Singapore girl. Journal of Management Development, 19(6), pp.456-472. Cook, A., Tanner, G., and Lawes, A., 2012. The hidden cost of airline unpunctuality. Journal of Transport Economics and Policy 462), pp.157-173. Heracleous, L. and Wirtz, J., 2010. Singapore Airlines balancing act.Harvard Business Review,88(7/8), pp.145-149. Heracleous, L. and Wirtz, J., 2012. Strategy and organisation at Singapore Airlines: achieving sustainable advantage through dual strategy. InEnergy, Transport, the Environment(pp. 479-493). Springer London. Heracleous, L. and Wirtz, J., 2014. 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