Singapore Airlines: A Great Way to Fly

Singapore Airlines
Great Way to Fly
Singapore Airlines
Table of Contents
1. Executive Summary .......................................................................................................................... 3 1.1 Background .................................................................................................................................... 5 2. External Analysis for Singapore Airlines ............................................................................................. 2.1 PESTEL Framework: ...................................................................................................................... 2.2 External Environment of Airline Industry (Asian Context): ............................................................ 2.3 Five Forces Analysis of Singapore Airline: ..................................................................................... 3. Internal Analysis of Singapore Airline: ................................................................................................ Strategic Capability of Singapore airline ......................................................................................... Resources and Competence of Singapore Airline ............................................................................ Unique and Core Competence of Singapore Airline ........................................................................ 3.1 Competitive Advantage of Singapore Airline................................................................................. 4. SWOT Analysis ................................................................................................................................... Strengths ....................................................................................................................................... Weaknesses ........................................................................................... ........................................ Opportunities......................................................................................... ........................................ Threats .......................................................................................................................................... 5. Singapore Airlines strategy ............................................................................................................ 6. SIA s organizational activity system .................................................................................................... 6.1. Rigorous service design and development ................................................................................... 6.2. Total innovation .......................................................................................................................... 6.3. Profit-consciousness ingrained in all employees ...................................................................... 6.4. Achieving strategic synergies through related diversification and infrastructure.......................... 6.5. Dev eloping staff holistically ......................................................................................................... 7. A dual strategy of differentiation and cost leadership ........................................................................ 8. Turbulence on the horizon ......................................................................... ........................................ 8.1 HR Related Issues ......................................................................................................................... 9. Recommendations ............................................................................................................................. 10. References ....................................................................................... ................................................ 10 10 12 13 14 14 14 14 14 15 15 20 22 23 25 27 27 29 30 31 32 35 37 38 42 49
BMGMT3202 Strategic Management
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1.
Executive Summary
The growth of modern Singapore can be traced back to the policies and priorities established by the then prime minister who was a staunch believer in free trade and internally driven growth. Despite of, the Government being the majority share holder Singapore International Airlines (SIA) faced heightened competition f rom the start as the government declared that it would not give any subsidies to the airline. SIA traced its roots to an organization which had proved to be quiet beneficial to the fledgling company. From the crews impeccable safety record to personnel with crucial operating experience helped SIA to reach over 90 destinations in more than 40 countries all over the world by early 2003. SIA established an enviable record both in terms of the operational performance and its profitability history. Using its brand image, geographic location, and outstanding service as the cornerstones of its strategy SIA enjoyed a run of exemplary profitability and service performance by the year 2004. It had built its strategy around the principles of a differentiated positioning. In recent years, there have been many environmental shocks, such as SARS, that have challenged the continued viability of the model. The model of strategy that SIA had built in order to compete in the airline business in the late 1990s is to take some important steps to fortify its position globally. By joining the star Alliance SIA expected code sharing services, fine tune traffic flows and enter destination where it did not had access, like more secondary the alliance network brought some concerns like restoring the brand image of SIA which it so caref ully nourished over the years. The loss of control over some key decisions also posed challenges to SIA. To gain the control of alliance SIA took some decisions which later came out to be a bit costly for them. Such as the partnership with Air New Zealand resulted in loss and hasty retreat from the initial foray to establish control of the key Australia- Asia routes. The second wrong move was to acquire the
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49% of the equity with U K based Virgin Atlantic Airways for 1.6 billion. Virgins decision not to join the Star Alliance placed SIA in delicate position and the threat of invoking the ire of other alliance partners should it favor Virgin over United and other f or channeling some of its transatlantic passengers. On the other hand rejecting the opportunity to participate in the venture of Virgin Blue, which later posted very good returns in the Australasia market was another wide of the mark decision of SIA. The low cost carriers in Asia became one of the greatest threats for now. The Air Asia and Virgin Blue have acquired considerable percentage of Asian and domestic Australian markets and SIA has found itself challenged by the entry of many other low-cost airlines in its home market.SIA is at the cross roads in its history and the next few strategic moves would determine the rise of the best Asian Airline to become a global player commanding the respect of the worlds largest carriers. The case closes with a decision that SIA needed to make about how it would address the onset of low-cost competitors, and whether it would make sense to move away from its differentiated premium approach.
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1.1 Background
Singapore International Airlines (SIA)-A Benchmark Airline: Over the years the Singapore International Airlines has built up a strong brand name as a trend-setter in the aviation industry, particularly in terms of safely, innovation and service excellence. Its focus on the differentiation of its services from other airlines has made it one of the most successful and recognizable airline brands in the recent past. It is also an industry bellwether for air-craf t purchases. Its major shareholder being the Government of Singapore, SIA has always received tremendous support from them. It is the parent airline of the Singapore Airline Group of Companies. It has diversified into airlinerelated businesses such as aircraft handling, engineering and catering. The Singapore girl as we know is what the hostesses are called- is recognized as a symbol of excellence in service quality. The concept of choice of meals in the economy class was first pioneered by the SIA. Other tangible and intangible differentiations were first pioneered by SIA which is now copied by all major airlines. The Advent of Problem in the SIA: The problem began during and after the difficult economic conditions such as the SARS outbreak in 2003 and the Middle East crisis. The relation between the group management and the labor unions began to sour, particularly after the wage-cuts and lay-offs of over 400 employees. It was regarded as the highest number of lay-offs in the history of SIA. It went on for a further wage-cut and lay-offs in order to trim its operating costs. The whole incident was being regarded as self-serving by the Unions. The full support from the SIAs major shareholder, the Government of the Singapore was also considered by the unions as suspicious and they did not like it a bit. They thought these excuses were used just to downsize the number of employees. Duplication of SIA differentiation strategy by other Airlines: Then came the copycats, the other airlines who did not waste any time in copying many of the remarkable innovations pioneered by SIA. SIAs development as a carrier came through their strategy of differentiation. But soon it became a norm, as a result of the other airlines adapting the ways. The sensational additions of luxury such as choice of meals in economy class, innovative entertainment options etc that were introduced by the SIA which became their specialized field, no longer remained so. Main concern was the increasing competition from International carriers headquartered in the neighboring countries, such as Thai Airways, Cathay Pacific, Malaysian and Qantas. They duplicated some of the key features of SIAs competitive strategy, which included recruitment, in-flight service, fleet management etc .
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Buying of stakes of other airlines by the SIA: SIA has a strong presence in the Southeast Asia, South Asia, East Asia and Kangaroo-route. But soon after the low-cost carriers began to make their presence felt in the Asian region that also included the routes that SIA ruled for so long. As a result the business of SIA began to slow-down. The Government of Singapore on the other hand was on the process to launch a low-cost carrier around that region and with that they also declared that possibilities are there that they might sell its 57% stake in SIA. This declaration made some believe this would help SIA to compete with other low-cost carriers evenly. Along with this, they also believed that this relationship between the SIA and Singapore Government gave the SIA greater Privileges but the SIA has denied it all along. The Operational Investments by the SIA in recent times: To make its presence powerfully around the world, SIA in order to expand its business, purchased 25% of Air New Zealand. But as the Air New Zealand went bankrupted, the deal turned sour and SIA lost about $157 million. Around the year 1999, SIA bought a 49% stake in Virgin Atlantic Airways worth $1.6 billion. By 2007, it lost 60% of its value. Many said that the partnership was not working because of the different cultures of the respective airlines. Mr. Chew Choon Seng the CEO of the SIA was faced with a challenging task of determining the competitive strategy of SIA in turbulent times. The Traditional Airline Industry: Conventionally, due to the national and international regulations, the airline industry based on the limiting effects was fragmented. Each country has its own landing rights and local ownership requirements. The large airline companies developed domination only on their own regional markets. Thats the best they could do even being industrys biggest airlines. The competition was divided into each region and it was not global. The sole reason being different countries not allowing other airlines to have their business in their countries and only the government owned national carriers were given the autonomy to run their business in their respective countries. Exception was the United States, where they did not allow the national carriers to dominate rather they encouraged a fair competition among the airlines inside their country. However the scenario eventually changed in the 1990s when the industry began to reform as a result of the deregulation, privatization and the advent of the new technologies. The Consequences of the Reformation of the Industry: United States deregulated its airlines in the late 1970s and as a result it has witnessed the severe competition among the airlines in its country. Europe, soon after the creation of the European Union, terminated the country-specific barriers and allowed free-market competition among the carriers. As a result they also entered the world of competition of the airline industry. In Asia, some major regions started allowing greater access to foreign carriers. Japan took an enormous step in the process of
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deregulation by selling off its shares in the then state-owned Japan Airlines and authorized All Nippon Airways to serve international markets. On the other side of the globe, in South America, many small national flag carriers were privatized. Countries such as Argentina, Mexico removed the anti-competing barriers and infused considerable levels of market competition in their airline industry. They also privatized their national carriers. This trend gained a lot of significance and appreciation. Countries such as the European nations were by then having discussions with the United States to operate an open transatlantic market area where landing rights would be determined by free market f orces rather than regulatory process. Thus the traditional airline industry coming to an end. The era of globalization started. Nations started having open-skies agreements between each other. There agreements were bilateral agreements between countries that agree to provide landing and take-off facilities for air-carriers coming from any of the partner countries. The Globalization Era: The ref ormation through deregulation and privatization helped the airline industry to become global. It transformed the fragmented competitive market into a global competition. It was seen that most of the large carriers retained their regional powers. But many airlines tried to make alliances with the other leading carriers, in order to provide perfect services across the wider geographic regions. These alliances made most of the larger airline companies into de facto global organizations. That is they became a group and cooperated with each other in order to provide services to customers. Due to globalization many regions were witnessing the significant and intense competition among the airline companies. It was clearly exposed in case of the f ares offered by the airline companies. There were high fare wars among them. Since the customers had more options to choose from, they became concerned and more pricesensitive then ever before. The competition became so intense and acute that many carriers started to focus only on their service offerings. They concentrated on upgrading their service offerings. To sustain the competition, many carriers in the process of improving their service offering, contributed in the declining yields in a priceconscious market. The presence of so many airlines competing with each other worsened the situation. The passenger-revenue yield declined in all geographic regions. The carriers around the world were passing a very tough and challenging stage in order to extract higher levels of efficiencies from their operating structures.
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The Evolution into Alliances: It became a norm for the carriers around the world to be a part of the alliances during the late 1990s. By 2004 most of the major airlines were part of mega alliances. These alliances have evolved in order to include several carriers under a single alliance brand. One such alliance was called the star alliances and it included ten-carriers representing Asia-Pacific, North America, Latin America and the Europe. Another similar network of partnership included eight carriers across a similar geographical territory to Star.The reason of the existence of these alliances was to redirect traffic, increase profitability, and help leverage scale economies in operations. In addition differentiate services and convince potential customers to buy their services and make them their regular carriers. But along with the advantages, came the short comings of being a part of the alliances. It had its own problematic issues. The issue that rose first was if all the carriers in the alliances would be able to perform consistently or not. That is the partner carriers were concerned if the level of service across carriers, safety records of the partners, and willingness to let go control to an alliance. Becoming a partner meant losing the control to some extent. As the partnership suggests, they also had to listen to other members of the alliances and act in accordance with them. They have to work as a unity. The crucial factor seemed to be the difficulty in developing a harmony among the partners regarding how they would establish common safety, service, and performance standards. The other major issue was the cross-shareholdings between carriers especially in the Europe markets as the privatization accelerated. It was seen that many carriers were purchasing shares of other airlines but it was not like everyone was purchasing everyones shares. Rather it occurred between two-three carriers and that endangered the scenario f or the alliance. Inside one big alliance, small alliances were emerging and it was giving rise to rivalry among them. This also happened as the partners were allowed to negotiate side deals with other carriers irrespective of their alliance membership.
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The Successful Saga of Singapore: By the 1990s Singapore became a flourishing nation and was envied by the neighboring countries for its triumphant achievements. Its per capita GNP increased by 32% by the 1990s. Mr. Lee Kuan Yew, the most powerful Prime Minister in the countrys history was the very reason for such change in the country. He was able to motivate his fellow countrymen. He announced his intent to develop Singapore so that they could compete head to head with rival Switzerland in terms of standard of living. He was not late to unitize the patriotic spirit of the people. He gave emphasis on superior education standards, a controlled labor environment, significant outlays for training and development of the people of the country. He believed that these all helped to enhance the quality of human capital. By 2004, Singapore had the highest rate of literacy rate in the region. Kuans vision did pretty well fit together with the Singapores Confucian work ethic. It stressed on responsibilities over rights and placed enormous value on attributes such as hospitality, caring and service- the biggest asset of Singapore. Thus, as a result of all these, Singapore ranked among the best countries in terms of human capital in 2004 and was often regarded as the friendliest place to do business with. But with the rising of standard of living meant a higher wage. In addition to that the small size of the local population and a very low unemployment rate, the availability of labor was seen as a potential obstacle in the drive toward further growth. Many large companies were already depending on a considerable number of expatriates that is they were hiring labors f rom other countries, particularly from the neighboring countries and west in the workforce.
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2. External Analysis for Singapore Airlines

Singapore Airlines Limited (SIA) is the national airline of Singapore. Singapore Airlines operates a hub at Singapore Changi Airport and has a presence in the airline markets of Southeast Asia, East Asia, South Asia, Europe and American region. The present external environment of airline industry also concern for Singapore airline.
2.1 PESTEL Framework:

In analyzing the macro-environment, it is important to identify the factors that might in turn affect a number of vital variables that are likely to influence the organization's supply and demand levels and its costs (Kotter and Schlesinger, 1991; Johnson and Scholes, 1993). The "radical and ongoing changes occurring in society create an uncertain environment and have an impact on the function of the whole organization" (Tsiakkiros, 2002). A number of checklists have been developed as ways of classification the huge number of possible issues that might affect on industry. The PEST analysis is one of them that are merely a framework that categorizes environmental influences as political, economic, social and technological forces. Sometimes two additional factors, environmental and legal, will be added to make a PESTEL analysis, but these themes can easily be subsumed in the others. The classification distinguishes between: Political factor: This refers to government policy such as the degree of intervention in the economy. What goods and services does a government wants to provide. To what extent does it believe in finance firms such as Singapore Airlines has withdrawn its bid for a stake in Air India, dealing a heavy blow to the Indian government's privatization programmed. This is a political barrier for Singapore airline. Economic factors: These include interest rates, taxation changes, economic growth, inflation and exchange rates. The Singapore Airlines offer to buy a 24 percent stake in China Eastern Airlines for 7.2 billion Hong Kong dollars (US$923.8 million) appeared in trouble Wednesday after a major shareholder criticized the deal as unfair. Social factors: Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work. In the year 2002 there was a fatal crash of a Singapore Airlines flight SQ006 at Taipei's Chiang Kai-Shek International Airport. Authorities blamed "pilot error" for the accident. Singapore Airlines has accepted "full responsibility" for the crash, saying it was obviously a case of "pilot error". The airline has offered $400,000 in compensation to the relatives of each of the dead and announced it will meet the medical expenses of the injured and discuss compensation with them. But facts have already begun to emerge that point to a number of other causes, some of which are directly linked to cost-saving measures by airlines and airport authorities. The death toll has risen to 82 people with the death of a survivor in hospital. Another 81 passengers were injured. This accident makes societal effect on Singapore airline. Technological factors: New technologies create new products and new processes. Organization must have-to concern about the new upcoming technology. Singapore Airlines is the first and only airline to install a productivity suite for the benefit of its passengers who can now continue to work after boarding the plane without having to power up their laptops. In addition to providing the world's widest First and BMGMT3202 Strategic Management Page 10
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Business Class seat and a technologically advanced seat in Economy Class, which makes the competitive advantage for Singapore airline. Figure 1 shows the PEST framework for Singapore airline:
Figure 1
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2.2 External Environment of Airline Industry (Asian Context):

The external environment has an enormous impact on the Airline industry. These hav e been unstable times for the Asian airline industry. It has been confronted with a marked decline in international tourism in the aftermath of the September 2001 terrorist attacks in the united State and, more recently, traffic loss attributable to the war in Iraq and sev eral terrorist activities. The airline industry are more competitive in Asian region because there are more than thirty country operate around thousand of Airline company, Singapore airline is one of them operating in Asian region as well as in Europe and American region. Figure 2 shows the circle of external environment and the airline industry.
Figure 2
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2.3 Five Forces Analysis of Singapore Airline:

This Porter's 5 forces analysis deals with factors outside of airline industry that influence the nature of competition within it, the forces inside influence that how Singapore airline compete. These are: mean and figure 3 shows this five forces and Singapore airline.
Supplier Power: Suppliers power is very high in airline industry. Singapore airline also concern about this factors. For example if the jet fuel price increase, the airline company has no choice. Recently increase in the price of jet fuel, Singapore Airlines will increase its fuel surcharge for tickets issued on or after December 4, 2007. The price of jet fuel has increased piercingly in recent weeks, and is now hovering around US$115 per barrel. Buyer Power & Substitution: The buying power for individual customer is too high in airline industry. There are hundreds of airline company operate in Asian region, in this fact individual buyers has so many option to choose which airline he wants to fly. Competitive Rivalry & New Entry: Singapore airline has to concern about the competitors because airline industry is so competitive. This has already started with two national carriers, Air Canada and Garuda of Indonesia, seeking to curb Singapore Airlines' access to their home markets. Growth of global megacarriers, as U.S. and European airlines merge or form alliances to cut cost, will also intensify competition for Singapore airlines.
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3. Internal Analysis of Singapore Airline:

Strategic Capability of Singapore airline Strategic capability identifies the capacity of a business to deliver future value to his end user. So, most companies discuss their strategic capabilities to get the competitive advantage. Resources and Competence of Singapore Airline Singapore airline is the strongest brand from Asia and it's long-serving, almost iconic. Singapore Airlines has consistently been one of the most profitable airlines globally, and has always had the reputation of a trendsetter and industry challenger. There are several good reasons for this. Most relates directly to the strong brand management driven primarily by the Singapore Airlines boardroom and top-management, and healthy brand equity as the result of a dedicated, professional brand strategy throughout a diversified, global organization. Unique and Core Competence of Singapore Airline Singapore airline is the strongest and iconic brands from Asia. Singapore Airlines has consistently been one of the most profitable airlines globally. There are several good reasons for this. Most relates directly to the strong brand management driven primarily by the Singapore Airlines boardroom and topmanagement. The Singapore Airlines brand is unique in the sense that the boardroom takes dedicated leadership of the brand strategy unlike many other Asian companies. SIA also has the high brand attributes. They have pioneered many in-flight experiential and entertainment innovations, and strived to be best-in-class. SIA was the first to introduce hot meals, free alcoholic and non-alcoholic bev erages, and hot towels with a unique and patented scent, personal entertainment systems, and video-ondemand in all cabins. The company keeps driving innovation as an important part of the brand, and the cabin ambience and combined experience are key factors of their success.
3.1 Competitive Advantage of Singapore Airline
Singapore Airlines (SIA) has achieved sustainable competitive advantage. SIA has consistently outperformed its competitors throughout its three and a half decade history. One key element of SIA's competitive success is that it manages to navigate skillfully between poles that most companies think of as distinct: delivering service excellence in a cost-effective way, at cost lev els so low that they are comparable to those of budget airlines in the U.S.A. and Europe (in 2005-6 for example the cost per available seat kilometer was S$7.9 cents, or US$5.2 cents).
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4. SWOT Analysis
SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plans. Such an analysis of the strategic environment is referred to as a SWOT analysis. A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the f irm usually can be classified as strengths or weaknesses, and those external to the firm can be classif ied as opportunities or threats. The SWOT analysis provides information that is helpf ul in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy f ormulation and selection.
Strengths
SIA Has A Track Record Around Its Superior Strategy Of Differentiation: SIA has established an outstanding standard on inventing and implementing new strategies in airlines industry. It always keeps herself up-to date in the industry and introduced diverse types of strategies, which had helped to dominate in the market for a long time. Innovation on different sectors within airline industry has given them supremacy over other airlines as the rest of them could not bring such a new thing simultaneously. Obviously, diversity is a mandatory criterion in any service industry. Different strategies of SIA that have introduced the airline customers with new era of comfort and luxury, had lead them superior in the market. So building and implementing tactics seems a key success factor for SIA.
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SIA Has deployed Its Routes W orldwide Including Very Attractive Tourist Spots: SIA, due to increase its profit have reached to almost all major cities of the world. Within 2003 they covered 90 destinations in more than 40 countries in Asia, Europe, North America, Middle East, the Southwest pacific and Africa as well. This vast expansion ensures their sky superiority as well as their customers appetite. Its quite impossible to make airline business profitable without expanding new routes. SIA has realized it and take the advantages of its massive fleets. It has reached to all major attractive cities of the world. So no matter whether it is a business trip or leisure trip Singapore airline is ready to serve its customers needs. Long routes means more flight, which at the end of the day will bring more profit and enhance customer satisf action. SIA Has Impeccable Safety Records: SIA has a prolonged history of keeping best safety standard. A top-notch airline needs to regularly update and maintain its aircrafts. SIAs aircrafts are almost very modern and got state or art technology on board. They go under safety check regularly. Moreover, SIA does not keep older aircraft. Most of the aircrafts are a little over five years old, which is quite unimaginable for most of the airlines. Safety is a very vital factor upon which an airlines success depends mostly. Due to lack of a good safety record a significant number of airlines that have invested a lot even failed to attract considerable amount of customers. Whereas, SIA has got awards for its safety records which naturally influenced travelers both short and long haul travelers to choose SIA. The major thing is SIA have achieved the confidence of customers by its safety records. Singapore Airlines Catering Service Is One of the Best among the Other Service Providers in the World: Singapore airlines catering service is one of the best in the world which is included in their terminal service knows as SATS (The Singapore Airlines Terminal Service). Its airport known as Changi International Airport produce the meals of 45,000 people for each single day. They serve foods for different world-renowned airlines like British Airways, Qantas, and Lufthansa, Japan airlines and obviously for SIA. In-flight catering is definitely a vital point for airline industry. Many other competitors of SIA have left behind because of poor catering facility. It is well known fact that in long haul flight customers will look for good and hygienic food, which they consider as a part of comfort and luxury as well. So, to satisfy customers it is a must to prepare top class menus. So adding a world class catering service on board has given SIA supremacy over other competitors. SIA is determined to Give Best Terminal Service for Its Customers: One of the biggest f acilities for SIA is its terminal services like people handling efficiency and cleanliness. No other airlines can claim that they can deliver baggage like SIA. Singapore airlines can deliver a passengers baggage within ten minutes after arrival in Changi International Airport. Cleanliness is
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another strong point f or Singapore airlines terminal service. It has been awarded for several times due to its cleanliness and ground operational procedures. A passenger has now a lot of options to do in the ground while he or she waits for the departure from the airport. Its not boring anymore like the previous days. Most of the harassment occurs during baggage collection after arriving in the airport. Even some renowned airliner cannot guarantee hassle free baggage collection for their passenger. But SIA can offer them this unique service, which is a definite advantage for them. So before give a booking for a ticket for traveling a passenger would certainly think what is the best option for him or her to choose if he/she looks for a smooth journey and of course a pleasant departure from the airport. This unparallel service has also ensured the dominance of SIA over other competitor airlines as well. SIA Provides Best Technical Facilities And Possess Unparallel Engineering Capability: Technical facilities are always very crucial factor for any airlines in todays competitive airline industry. SIA has its own engineering company which is a subsidiary. This company provides aircraft maintenance and engine overhauling services. It also test s the status of the aircraft engines and many other services, which includes fueling as well. Not only for Singapore airlines but also for many other airliners they are offering services.Undoubtedly, technical superiority brings enormous advantages for Singapore airlines. They are technically self-dependent whereas other airlines have to spend a significant amount of money each and every month for routine maintenance and check up procedures. Singapore airlines technical department has strong tie up with reputable companies like Rolls Royce, Pratt & Whitney and others. Working jointly with these worlds renowned companies ensure technical supremacy and safety of Singapore airlines over its competitors. SIA Has Adopted the Policy to Make the Journey of the Passengers steady and dynamic: Singapore airline has introduced the system of online booking for the customers. So, now a days passengers need not to go to the travel agencies or anywhere else for ticket booking. They can do it now from home just by clicking on their mouse. This kind of system has made life more easy and dynamic. Moreover, Singapore airline has the option to bypass the queue of passengers. They dont need to stand for reporting as they can do the necessary tasks through online. Customers always want to save their time and energy. Online ticket booking system and automated check-in-systems have now helping them to reduce their travel time. They dont need to come earlier at the airport for checking. Definitely this is a very attractive f acility for any passenger. Due to this opportunity many of the travelers blindly select SIA for any short or long distance traveling. SIAs Aircrafts Are Capable for Long-Haul Flights with Huge Number of Passengers: SIA has got a large fleet of diverse kind of aircrafts, which includes Boeing 747-400, which is just more than five years old. In 2003 they had 97 aircrafts, which were capable of carrying considerable amount of passengers for long-haul flight. SIA is the first airline that has ordered for super jumbo jet produced by
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Airbus that has got double deck. If one single flight can carry more passengers than two flights, certainly it will bring more benefit f or any airline rather than running more flights. Long haul flights, which SIA has been operating does, not need require refueling. As those flights do not halt at any stoppage on the way so it can reach to its destination earlier, which in the long run saving passengers journey times. In todays busy life everyone likes to reach to his destination earlier rather than waiting in the aircraft. Singapore airline is providing this opportunity to the travelers, which is obviously a big advantage for them and can attract the passengers easily. SIA Has Been Providing Top-Notch On Board Facilities: SIA provides some unique facilities for the passengers on-board. They are the first airline in the world that have installed video screen on the back of each seat no matters whether it is business class or economy class. They show many video channels, have larger amount of stereo channels and even game channels. The leather seats they use are of top quality, which are being used for Ferrari, Jaguar as well. Other necessary equipments are imported from top class companies like Clad in Connolly, French fashion house, Givenchy etc. Passengers like to pass a nice and comfortable time during their travel period. SIA has got all necessary equipments to fulfill their needs. This usually gives supremacy over other airlines that offer cheap flights with less quality of products on-board. People who like comfort and luxury, certainly SIA is the top most choice f or them both for short and long haul flight SIA Provides Best Training Facility For its Pilots: For any reputable airlines its pilot is one of the most vital f actors upon whom the reputation of the organization depends a lot. Thats why SIA has given highest priority to its pilots development program. They do have their own aviation college for improvement in quality of the pilots. Moreover, SIA has their own flight simulators, which ensures world-class training for the cadets. Better training is the key point for safety. SIAs pilots have a significant contribution on building reputation of the SIA. Behind that their extra-ordinary training has worked as a key f actor. Unparallel training facilities have distinguished SIA from other airlines. Even from other airlines pilots come to learn at Singapore airlines. The unique capability of SIAs pilot have a good demand in aviation industry which on the long run bring benefits for SIA by establishing them as a brand name in the aviation sector.
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SIA Has Provided A Supervene And Dynamic Workplace For Their Employees: For a long period Singapore airline is one of the most exciting place for working. The environment is truly multicultural and very dynamic. It is also a suitable place for learning a development. A large number of Malaysians and Singaporean works there. The recruitment and selection process is fare and f ree from any kind of biasness. They do run cadetship program, which is somewhere known as Graduate recruitment as well.SIA has a strong policy for talent hunting. Top quality workplace and on job training has made them first choice among all other Singaporean companies to the young generation. So automatically SIA is getting enormous talents on their pipeline that at the end of the day are brining signif icant change both on technical and operational sides. Among the employees job satisfaction is the biggest criteria, which determines the period of existing in any organization. Here SIA has got the biggest success as well. Their corporate atmosphere has been able to retain the employees. So turnover rate is very low unless it is something worldwide crucial moment or any natural disaster occurs. This has brought enormous strength inside of SIA, as the human beings are the main assets for any organization who are responsible for making any organization profitable and dynamic.
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Singapore Airlines Weaknesses

SIA Does Not Receive Any Subsidies Or Protection From The Government Though It Is The National Flag Carrier: A big drawback for Singapore airline is it does not receive any subsidies or protection from the Government. Unlike other airline they dont get any financial support from the Government. They are totally private organization and they have to heavily depend over their shareholders and upon the benefit of the business. Many airline of the world that is national flag carrier do receive subsidiaries or some financial protection from their Government. This helps them to survive during turbulent period. On the other hand, SIA is getting deprived from this facility. So if anything goes wrong they have to face terrible situation. They have to cut down their workers, have to close down some operations; they might have to close some other routes. These all will certainly decrease the benefit level of Singapore airlines and can jeopardize its position in the aviation industry. SIA Has To Bear Various Expenditures Behind its Aircrafts Pilots: Pilots are one of the major key players behind the success of any airlines in aviation industry. So its very necessary that every airline have to keep a considerable amount of budget behind the pilots. SIA has a diverse and multicultural workplace. A considerable amount of pilots have come from the different countries that are not native. As they are expatriates so SIA has to bear various types of costs behind them, which are sometimes expensive. There is a disadvantage of having expatriate pilot in any airlines. They are often expensive and a lot of headache is involved on managing those pilots. If they form a group and go for the strike then obviously any airline will suffer. They will be failed to maintain their schedule, which will certainly be a strong reason f or losing business. Moreover, pilots do demand a lot of facilities for which an airline has to spend more than other employees. Another weakness of SIA is, as these pilots are expatriates so there is always a chance that the pilots can leave the job anytime within a short notice. SIA needs to maintain high standard behind pilots training, as they are committed to maintain top class all the way. These training include flight simulator training, ground training etc which are highly expensive. So, if any pilot moves to other airlines certainly the investment they have made will be a complete disaster.
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SIA Is Unable To Reduce Traveling Cost Due To Keep Highest Standard: Singapore airline is committed to keep the best standard in every service sectors of its operation. Thats why they have to invest a lot behind different equipments, training, operation management etc. This, at the end of the day, influences over the price of the ticket that are being taken from the passengers. Generally the cheap airlines like EasyJet, Air Asia etc who have been offering low cost travel are getting advantages. As much as the low cost airliner is arriving to the industry will that much SIA has been facing competition. Obviously SIA cant decrease its price, as it cannot compromise with its quality. But there are signif icant amount of passengers who always seek for low cost travel. They dont go f or luxury. They are more interested for saving their money. But unfortunately, SIA cant get their attention due to high price than other cheap airlines. So a large chunk of people is always out of SIAs service. And SIA is losing business due to its price.
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Singapore Airlines Opportunities

Singapore And United States Had Signed For An Open Skies Agreement: This is a new phenomenon where two or more countries make a deal to do business together. In this deal they come to a consensus where the skies of the each country will remain open for each other. This is known as Open sky. Under this treaty countries who will sign will be able to land and take off their aircrafts from any of the airport of the corresponding countries. Open sky agreement between USA and Singapore is a massive opportunity for SIA. USA is a vast country where millions of opportunity exists. Moreover, aviation industry is not very dynamic there though there are still some competitors are playing vital role like Virgin, Delta airlines and of course Southwest airlines. But SIA is getting the biggest opportunity thought the bilateral agreement between USA and Singapore government. Now they are going to land and take-off their aircraft in USA. They can go to any city or state in USA. There are a huge number of people living in different states who were not served before by SIA. Now this enormous market is going to be opened in front of SIA. The people f rom USA had to depend on other airlines or some low cost airlines like Southwest previously. The outstanding service of SIA will certainly attract the luxurious people of USA. Furthermore, SIA has lot of extra facilities, which other existing airlines in USA dont offer generally. So, SIA has a very good prospect in USA market. SIA Can Use The Alliance Network Which Is Yet To Serve: This is another good option f or SIA to leverage their business in aviation industry. Forming alliance is a new phenomenon in this sector that allows any airlines to tie up with other airlines and share their common values and work under a single alliance brand. For an example, Star alliance, this covers a lot of cities of the world, even the continents. For a single airline its really difficult to cover a large area consisting diff erent routes simultaneously. Building alliance is a massive task but it opens more opportunity for any individual airliner. An individual airliner sometimes faces some difficulties with various types of problems. It might be technical, operational, and strategic and so on. Its very tough to solve those problems lacks lonely. Sometimes its not possible to operate flights on some routes due to operational cost though it might have prospects as well. Financial constraints most of the time create headache as well. Forming alliance is a good solution for it where everyone works under same umbrella. Working under an alliance will give SIA a unique opportunity to work with other friendly airlines and would able them to reach to other different destinations in Europe and USA, the zones that are yet to be served by SIA. This will definitely increase the profitability margin. SIA will be able to reach to cover up their loses on different zones by forming alliances with its friendly companies. It will help them to share profit as well because some people might not travel by SIA but they may travel through one of the airlines of the alliance.
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Singapore Airlines Threats

SIAs Competitors Are Duplicating Its Own Corporate Strategies: It is well known that the strategies SIA adopts are world class and effective under any circumstances. Thats why its competitors have started to follow him blindly. For any example, online reservation system, introducing different cabin systems, on-board entertainment facilities all these are the brainchild of the executives of SIA. Some of the old executive who has switched to different airliners is now adopting the same policies that SIA follows in the business. Thus SIAs policies are getting copied in a vulnerable way among other of its competitors. Its very tough to run business when the competitors are copying the corporate strategies rapidly. SIAs key business strategies are getting copied thats mean SIA cant have the profit for which they make the decisions. Its continuously making them looser and they are going back in the competition. If business secrecy is being leaked out then obviously its crucial for any organization and the survival will be questionable. Other airlines now introduced music system, multiple video channels on-board which were being introduced by SIA the first. But as those facilities are now being available on other cheap airlines even, and so travelers are now getting interested on SIAs competitors. SIA Has To Struggle With Low Cost Airlines: Low cost airlines are getting a big question mark for Singapore airlines day by day. In Europe, RyneAir and EasyJet have changed the conventional system of airline business. Other big airlines giant like British Airways, SAS, KLM etc have been struggling against them. These cheap airlines offer very cheap flight within Europe, which is almost one tenth of traditional fare. These bring enormous threat for traditional airlines. The advent of Air Asia in Asia continent and Virgin Blue in Australia brought major problems for SIA in both of the continents. Traveling through cheap airlines is a phenomenon among the air travelers. Now a day it takes very few amount of money to travel from one country to another country, which was unimaginable some days ago. These low cost airlines dont off er luxurious facilities but they do offer the minimum amount of service. Most of the customers are delighted with it no matter whether they are getting world-class luxurious facility or multiple entertainment channels or not. So all other facilities that SIA is off ering is not getting that much value to the customers like before. Definitely they are losing their business to the low cost airlines. If SIA cant bring any solution then rest of the customers will blindly select these low-cost airlines for the coming days.
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Individual Airlines Under Alliances Are Making Side Dealing With Other Competitors: There are some potential risks on getting attached with any airline alliance though it is beneficial for some cases. First of all, any individual airline may have poor standard on safety record, sometimes they might have poor level on service delivery or employees performances standard are not up to the mark. So the poor performance of one member of the alliance may effect on the reputation on overall alliance. Secondly, some of the alliance member may run their business in parallel with other airliners that might be rival group. It would be very vulnerable for the alliance, as it would directly impact on the business.SIA has a very fresh and prolonged reputation on airline industry where very few airlines of the world can dare to reach. But due to turbulent nature of the airline industry SIA is getting forced to tie up with other airlines. If they do this and get a partner with poor performance then certainly who are the regular passengers of SIA will not show interest to board any of the aircraft of the alliance. These will seriously damage the reputation of SIA. Due to the fault of one airline the whole alliance including the SIA will suffer. Side business of its partner with rivalry group also may jeopardize the business position of SIA as well. A large chunk of passengers may migrate to different alliance or other member of the SIAs alliance who are getting benefited in a different way by depriving SIA. So, both ways there are threats for Singapore airlines if they go under alliance.
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5. Singapore Airlines strategy

Singapore Airlines is positioned as a premium carrier with high levels of innovation and excellent levels of service, and has made a strategic choice of giving priority to profitability over size. The internal organizational practices outlined in this paper, such as continuous people development and rigorous service design are key aspects of operationalizing and sustaining this positioning and strategic choice. At the corporate level, SIA f ollows a strategy of related diversification. The Singapore Airlines Group has 36 direct subsidiaries and associated companies (Singapore Airlines, 2008). SIA Group subsidiaries include Singapore Airport Terminal Services (80.8%), Singapore Engineering Company (81%), and Singapore Airlines Cargo (100%) (Singapore Airlines, 2008). Its airline subsidiaries which include 100% ownership of regional carrier Silk Air, budget carrier Tiger Airways (49%), and Virgin Atlantic (49%) cover the key customer segments within the industry. According to CEO Chew Choon Seng we intend to play in all the segments SIA at the high end, Silk Air on middle ground and Tiger Airways at the low end (Outlook, 2004). The shareholders in Tiger Airways include Temasek (the Singapore governments investment arm as well as SIAs majority owner) and Irelandia Investments, the private family investment vehicle of Anthony Ryan, the founder of Ryanair, one of the worlds leading budget carriers. As part of its international strategy, in April 2000, SIA joined the Star Alliance, one of the three major airline alliances (the other two being Oneworld and Skyteam). In the meantime various divisions of the SIA Group have been investing in China and India through strategic alliances with local organizations (cargo division, airport services, engineering services and catering). Use of inf ormation technology is an essential f eature of SIAs strategy both in enhancing customer service as well as increasing efficiency. SIAs web site is one of the most advanced and user-friendly in the industry, where customers can check schedules, buy tickets, check into a flight, manage their Krisflyer (frequent flyer) account, find out about promotions, and even choose their meal for their next flight. Given that agents commissions can be up to 7.5% of total operating costs (and reservations/ticketing a further 5.4%) (Doganis, 2006), effective use of IT can significantly reduce costs and enhance service levels. When the current CEO, Chew Choon Seng took over in mid-2003, cost cutting was on the top of his agenda with particular emphasis on cutting non-fuel costs by 20% within 3 years, and outsourcing IT functions to IBM. The sustained drive for efficiency as well as quality has enabled SIA to increase the spread between breakeven load factor and actual load factor to 6.7% by 2006. With regard to business-level strategy, Singapore Airlines has managed to deliver premium service to very demanding customers (achieving differentiation); at a level of costs that approach those of a budget carrier. This achievement challenges Porters suggestion that differentiation and cost leadership are
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mutually exclusive strategies. Singapore Airlines supports this dual strategy of diff erentiation and internal cost leadership through the core competency of cost-effective service excellence, enshrined in a unique, self reinforcing system of organizational processes and activities.
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6. SIA s organizational activity system
The five pillars of SIAs organizational activity system, described below, are rigorous service design and development, total innovation, profit consciousness ingrained in all employees, achieving strategic synergies, and developing staff holistically.
6.1. Rigorous service design and development

Almost two and a half decades ago, services marketing Professor Lyn Shostack (1984) noted that service design and development were characterized by trial and error rather than by a structured process as was the case in manufacturing. Things appear to have changed little since then for most service organizations. SIA however views product design and development as a serious, structured effort. SIAs initial commitment to exceptional levels of service and innovation begun in 1972, when, after its separation f rom Malaysian Airlines, it chose not to be a member of IATA, whose rules SIA considered too constraining. SIA has a Service Development department that hones and thoroughly tests any change before it is introduced. This department undertakes research, trials, time and motion studies, mockups, assessing customer reaction; to ensure that a service innovation is supported by the appropriate procedures. Underpinning the continuous innovation is a corporate culture that accepts change and development as not just inevitable, but as a way of life; a cultural element that is also inculcated at the national level by Singapores government. A trial that fails or an implemented innovation that is removed after a f ew months is acceptable, and damages no-ones reputation.
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At SIA it is expected that any innovation may have a limited shelf life. SIA recognizes that to sustain its differentiation, it must maintain continuous improvement, and be able to dispose of programs or services that no longer provide competitive differentiation or that could be offered in a different way. According to SIAs senior management, It is getting more and more difficult to differentiate ourselves because every airline is doing the same thing...the crucial fact is that we continue to say that we want to improve. That we have the will to do so. And that every time we reach a goal, we always say that we got to find a new mountain or hill to climb.you must be able to give up what you love (Yap Kim Wah). The stakes are raised for SIA, not only by its competitors but also by its customers, who have sky-high expectations: Customers adjust their expectations according to the brand image. When you fly on a good brand, like SIA, your expectations are already sky high. And if SIA gives anything that is just OK, it is just not good enough. (Sim Kay Wee). Combined with its extensive customer feedback mechanisms, SIA treats its customers high expectations as a fundamental resource for innovation ideas. Weak signals are amplified; every customer letter, be it complaint or compliment, creates a reaction within the airline. There is also a program called SIA, for staff ideas in action, where staff can propose any ideas they have that would improve service or cut costs. Additional sources of intelligence are the IATA, Global Airline Performance (GAP) survey, and SIAs spy flights, where individuals travel with competitors and report detailed intelligence on competitive offerings. Lastly, SIA recognizes that its competition does not just come from within the industry. Instead of aiming to be the best airline its intention is to be the best service organization. To achieve that, SIA employs broad benchmarking not just against its main competitors, but against the best-in-class service companies.
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6.2. Total innovation
SIA does not aim to be a lot better but just a bit better in every one of its functions and offerings than its competitors. This not only means constant innovation but also total innovation innovation in everything, all the time. Importantly, this also supports the notion of cost-eff ectiveness. Continuous incremental development comes at a lower cost than radical innovation, but delivers that necessary margin of value to the customer: It is the totality that counts. This also means that it does not need to be too expensive. If you want to provide the best food you might decide to serve lobster on short haul flights between Singapore and Bangkok for example, however you might go bankrupt. The point is that, on that route, we just have to be better than our competitors in everything we do. Just a little bit better in everything. This allows us to make a small profit from the flight to enable us to innovate without pricing ourselves out of the market. (Yap Kim Wah). In addition to incremental improvements, SIA also implements frequent major initiatives aiming to sustain service excellence. Organizational initiatives include SIAs Outstanding Service On The Ground program, Transf orming Customer Service and Soar, f or Service above all the rest. As a way of inspiring discontinuous service innovations, SIA strives to gain a deep understanding of trends in customer lifestyles, and debates their implications for the future of better service in the air. According to the Senior Vice President (Product and Service), Most new changes that really secure the wow effect are those things that customers never expected. . .we have our Product Innovation Department that continuously looks at trends and why people behave in a certain manner, why they do certain things. And then we do a projection of 35 years of what is going to happen. . .f or the airline, its not just about having a smoother flight from A to B. That will be taken for granted. It is really about what are the customers lifestyle needs. Can you meet these lifestyle needs? Examples of such innovations include the Krisworld on-demand entertainment system for all classes, Internet and phone check-in for all classes, the full-size
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space-bed. SIA was the first airline to fly the A380 jet (when it was finally delivered after long delays), and has been working on developing the in-flight offerings in that aircraft. These include suites, or a class beyond first in SIAs words that have helped to perpetuate its differentiated positioning. Another investment in innovation included a $1m simulator that mimics the air pressure and humidity in the air, so that food can be tasted under these conditions, which affect taste buds. One decision was to reduce spices in its food. SIA has made a clear strategic choice of being a leader and follower at the same time. It is a pioneer on innovations that have high impact on customer service (for example in-flight entertainment, gourmet cuisine that includes fine wines, the ability to order ones choice of dishes in advance by internet, beds in the air). However, it is at the same time a fast follower in areas that are less visible from the customers point of view, such as revenue management or CRM systems. In doing so, SIA relies on proven technology that can be implemented swiftly and cost-effectively; this reduces the implementation risk while delivering the necessary functionality.
6.3. Profit-consciousness ingrained in all employees

Despite SIAs focus on service excellence and innovation, managers and staff are simultaneously aware of the need for profit and cost-effectiveness. This derives from the company culture: Its drilled into us from the day we start working for SIA that if we dont make money, well be closed down. Singapore doesnt need a national airline. Second, the company has made a very important visionary statement that We dont want to be the largest company. We want to be the most profitable. Thats very powerful. (Yap Kim Wah) It is due to this policy of pursuing profitability, rather than size, that SIA has the second highest market capitalization in the airline industry globally (after Southwest), even though its revenues are relatively modest compared to competitors such as the Air FranceKLM Group, British Airways, or the Lufthansa Group. Any proposed innovation is analyzed carefully on the balance of expected customer benefits versus costs. A solid business case needs to be made to support all proposed innovations and new service offerings. Station managers and frontline staff know that they should balance passenger satisfaction versus cost-effectiveness in their decisions. The importance of efficiency in the company culture is reinforced by SIAs physical spaces. In contrast to the companys world-class fleet, there are no grand or expensive decorations and furnishings at the companys headquarters for example. The HQ is characterized by a simple, functional design that epitomizes the drive for internal efficiency. Further, SIA has a rewards system that pays bonuses according to the profitability of the company; the same percentage f or everyone the same formula is used throughout the SIA Group. As a result there is a lot of informal peer pressure from individuals within the organization, and staff and managers can challenge decisions and actions if they see resources being wasted. In 2006, the prof it sharing bonus formula has shifted to place more weight on the performance of individual companies (subsidiaries) in the
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SIA Group in order to increase cost and prof it consciousness in these companies and motivate them to increase their business with third parties, so that they will be less dependent on the airline (Singapore Airlines, 2006). SIA builds team spirit within its 6600 crew members through its team concept, where small teams of 13 crew members are formed and then fly together as far as possible for at least two years. This leads to the development of social bonds within the team that reinforce the culture of cost-effective service excellence and the peer pressure to deliver SIAs promise to customers. Based on both cabin crew feedback and efficiency issues, this team concept has recently been under consideration for further refinement. The aims include the improvement of rostering efficiency, enhancement of the cabin crew evaluation system, and providing cabin crew the opportunity to meet other colleagues who are not on their team. Supported by this mindset and organizational practices, the productivity of SIA employees is one of the highest in the global airlines industry (second only to Korean Airlines), at 1028 thousand available tonne Kms per employee(Doganis,2006).For comparison, the figure for budget airlines such as easyJet is 494 thousand, Jetblue is 522 thousand, and Southwest is 410 thousand. Calculated per $1000 of labor cost, SIA is at 20,768 available tonneKms as compared to easyJet at 14,629, Jetblue at 12,799 and Southwest at 9348.
6.4. Achieving strategic synergies through related diversification and infrastructure

SIA utilizes related diversification to reap cost synergies and at the same time control quality and enable transfer of learning. Subsidiaries serve not only as the development ground for well-rounded management skills, and a corporate rather than a divisional outlook through job rotation, but also as sources of learning. Related operations (such as catering, aircraft maintenance, and airport management) have healthier profit margins than the airline business itself because the industry structure is more favorable in those sectors. SIAs Singapore Airport Terminal Services subsidiary f or example provides several ground services at Changi Airport, which is regularly voted to be among the best airports in the world. This excellent airport management and infrastructure entices passengers who are traveling on to Australia, New Zealand or other countries in the region, to pass through Changi and to choose SIA as their carrier. Changi Airport is also one of the most cost-efficient major airports; for example landing charges for a 747 are $2000, as opposed to $3500 in Hong Kong and $7500 at Narita (Doebele, 2005). SIAs subsidiaries operate under the same management philosophy and culture that emphasizes costeffective service excellence.
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Even though they are part of the group, they are quoted separately and are subject to market discipline with very clear profit and loss expectations. In SIA the conventional wisdom of outsourcing (outsource peripheral activities and focus on what you do best) does not readily apply. External suppliers might find it difficult to offer the value offered by SIAs own subsidiaries. SIAs related diversification leads to strategic synergy benefits in terms of reliability of key inputs, high quality, transfer of learning, and at the same time cost-effectiveness. A common metric of airline costs is cents per available seat kilometer2, where flag carriers tend to have costs of US 914 cents, and budget carriers US 4.57.5 cents (Binggeli and Pompeo, 2002). Singapore Airlines costs per ASK were $ 5.2 cents in 20062007, up from 4.5 cents in 20052006, 4.2 cents in 20042005 and 3.9 cents in 20032004. By comparison, easyJet had costs of 6.9 cents per ASK in 20032004, Rynair 4.8, British Airways 12.5, and Lufthansa 14.6.
6.5. Developing staff holistically

Senior managers at SIA believe that training in SIA is almost next to Godliness. Everyone, no matter how senior, has a training and development plan with clear goals. The famous Singapore Girl undergoes training for 15 weeks, longer than any other airline and almost twice as long as the industry average of 2 months. This training includes not only functional skills such as food and beverage serving and safety training, but also soft skills of personal interaction, personal poise, grooming and deportment, and emotional skills of dealing with the consequences of serving very demanding passengers. SIAs training of the Singapore Girl is likened to a finishing school: The girls are transformed from coming in, and by the time they come out, they look totally diff erent. Their deportment, the way they carry themselvesTheres a great transformation there (Sim Kay Wee). In addition to such training, SIA also encourages and supports activities that might, on the surface, be seen as having nothing to do with service in the air. Crew have created groups such as the Perf orming Arts Circle, staging full-length plays and musicals, the Wine Appreciation Group and the Gourmet Circle. These activities help to develop camaraderie and team spirit. During their initial training and subsequent career, crew employees also spend time at welf are homes, to get a close-up engagement with the less fortunate, who have to depend on others f or their survival. This is aimed to help them develop empathy for others and put themselves in the shoes of the passengers. The contents of the training change to reflect customer expectations. While our Singapore Girl is our icon, and were very proud of her and her achievements, we continue to improve her skills; we continue to improve her ability to understand appreciation of wines and cheeses for example, or our Asian heritage ...the enhancement must be continuous (Yap Kim Wah). Cabin crew can select refresher courses, and on average attend 34 days of such courses a year. Popular courses include transactional analysis (a counseling-type course), leadership courses, and
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European languages. The company is moving from a system of directing which courses cabin crew should attend, to one of self-directed learning, where staff take responsibility f or their own development. Even before development starts, there is substantial effort to ensure that the company hires the right staff. For example, entry qualifications f or cabin crew applicants are both academic (at least polytechnic diploma, meaning that they have spent 13 years in school), as well as physical attributes. The recruitment process is extensive, involving 3 rounds of interviews, a uniform test, a water confidence test, psychometric tests, and a tea-party. Over 16,000 applications are received every year, and the company hires around 500600 new cabin crew, to cover attrition rates of around 10%. This includes both voluntary and directed attrition. After the Singapore Girls start flying, they are carefully monitored for the first 6 months, through a monthly report by the in-flight supervisor. At the end of the probationary period, 75% get confirmed, around 20% get an extension of probation, and 5% leave.
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Figure 4. Singapore Airlines organizational activity system supporting cost-eff ective service excellence. Source: adapted from Heracleous et al. (2009).
The five pillars of cost-effective service excellence are interconnected into an organizational activity system characterized by self-reinforcing virtuous circles and high levels of fit. It is this level of fit and mutual reinforcement among the elements that supports the sustainability of competitive advantage at SIA. It is relatively easy to copy individual elements of the system, but incredibly difficult to duplicate the whole system, which has evolved historically and is held together not only by formal processes but also by intangible elements such as organization culture. Figure 4 illustrates organizational activity system of SIA, where the pillars support the core competencies of cost-effective service excellence.
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7. A dual strategy of differentiation and cost leadership

Strategies of differentiation and cost leadership have usually necessitated different and incompatible investments and organizational models. A strategy of differentiation for example implies high quality offerings, and significant investments in innovation, staff development and branding, leading to higher costs than average. SIA achieves a differentiation strategy, but intriguingly, without a cost penalty. In fact, as noted above, SIA has significantly higher efficiency than its peer group, the key feature of a successful cost leadership strategy. Table 1 above outlines many of the elements discussed above in relation to the dual strategy of integrating elements of differentiation and cost leadership (Table 1).
Strategic alignment can be represented as consisting of four key elements. First, environmental conditions (macro- and microelements relating to the industry), secondly the strategy of the company that should be appropriate for the environmental conditions, thirdly the core competencies that should effectively support the strategy, and f inally the organizational level (including elements such as processes, culture, and functional strategies) that should deliver the necessary core competencies. The elements of SIA relating to the pillars are principally located at the level of organization. This is the basic and key level of strategic alignment, which delivers the core competencies of the organization. SIAs core competence is the ability to achieve a differentiated offering with exceptional levels of efficiency, which we labeled cost-effective service excellence. This capability supports SIAs dual strategy, which in turn is aligned with macro and micro-level market conditions (Figure 5).
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Figure 5. A representation of strategic alignment at Singapore Airlines.
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8. Turbulence on the horizon

Competitive conditions in the airline industry are becoming more challenging. Apart from wildly fluctuating fuel prices and security concerns, another wildcard for many airlines is the risk of long range aircraft bypassing their hubs. The Boeing 777-200LR launched in 2005, for example, is capable of flying 17,500 km, almost half way around the world. These planes can allow airlines to by-pass hubs like Singapore on flights from Europe to Australia for example. SIA has been seeking rights to fly from Australia to Europe, and f rom Australia to the US as a way of mitigating this risk. Competitors are hot on SIAs heels, trying to close the gap in both service excellence and efficiency. This is not always easy to do; Malaysian Airlines service quality is high for example, but its efficiency is nowhere near SIAs (available tonnekms per employee is 355 thousand, around just one third of SIAs) (Doganis, 2006). Other competitors have embarked on aggressive growth while also competing on service quality. For example, Emirates has placed successive orders for 45 A380 aircraft (at a cost of about $19billon), and prices tickets at levels generally lower than its main competitors. With regard to internal conditions at SIA, the need to reduce employee numbers and introduce a variable component to wage packages based on company profitability after the 2003 SARS crisis has been stressf ul for its industrial relations climate. Singapores Minister Mentor Lee Kuan Yew intervened to resolve these issues, given the importance of Singapore Airlines and the aviation sector to Singapores economic prosperity. Further, delays in delivery of the A380 during 20062007 have increased SIAs launch costs and delayed the realization of its capacity plans. Lastly, higher-paying jobs elsewhere regularly tempt SIA employees that are sought after in other service organizations, many of whom decide to take up new challenges. In 2006 the Singapore media have expressed concerns regarding service issues at SIA (The New Paper, 2006). Skytrax World Airline Awards have ranked SIA 7th in their Airline of the Year rankings in 2006, down from 4th in 2005, prompting some to wonder about the effectiveness of sustaining the balance between efficiency and quality at SIA. In both the 2007 and 2008 Skytrax rankings, SIA has regained the top position as airline of the year. Meanwhile, critics and competitors complain that much of SIAs success is due to environmental factors and the role of government rather than its own capabilities. Analysts note that one benefit of Temaseks 54.5% stake is lower perceived debt risk by lenders and therefore lower cost of borrowing (even though SIA does not need to borrow significantly). The industrial relations climate in Singapore is deemed to be less adversarial than elsewhere, enabling SIA to implement policies that would have caused significantly more friction in many other airlines. Critics also suggest that SIAs acquisitions have not f ared that well. In 1999 SIA bought 49% of Virgin Atlantic, and wrote off 95% of the investment soon after 9/11. In 2000 it acquired a 25% stake in Air New Zealand, which was seriously impacted by the collapse of its debt-laden Australian arm, Ansett Airlines; this investment was also written off.
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Many on the other hand disagree with the suggestion that SIAs success is due to the state. Indeed, high levels of state aid to airlines that have supported many of SIAs competitors (Doganis, 2006) have never been awarded in Singapore, where deregulation and encouragement of competition has been the norm. According to SIAs Chairman We are unlike many of our competitors: we have never had government protection, or underwriting of our business in difficult times. We operate on a commercial basis and our people know that our customers have a choice of airlines. (Singapore Airlines, 2006). SIA continues its dual focus on the customer experience though service excellence and innovation, as well as continuously striving f or efficiency. According to CEO Chew Choon Seng, the day we stop having visions or objectives to work to, then that is the day we atrophy. I can assure you we have no intention of doing that. (Doebele, 2005)
8.1 HR Related Issues

Human resource is a vital element of an organization. It is like a nucleus of an organization. Without it, an organization is like helpless in a sea because every part of an organization is interrelated with HR. To gain competitive edge in the industry, human resources plays a key role in helping companies dealing with a fast-changing competitive environment and efficient and potential employees. Due to the effect of SARS and Iraq war in order to cutting down cost Singapore Airliner has went on with some serious done about in term with the company employees. There are also problem and rising issues with the low cost airliners competition as it becoming more and more intense SIA have to take some drastic measure for their company in order to keep the competitive advantages and keep their name shine. Some their measures are directly related to the Human Resource issue to the company and it make a more of a factor on understanding where it will headed next, on the basis of their precise decision. The followings are some of the issue that is being recognized as the Human Resource related issues that are being subjected to the Singapore International Airlines: Being a leading Airliner in the world recently SIA had laid off employees, gave wage cut in the senior management and came to negotiated with cabin and ground stuff employee on their salary. This is a major Human Resource related Issue which should better be dealt with grave importance as it might create a huge amount of negative impact if not properly managed among the employees of SIA. Singapore Airline had laid off about 400 employees in order to bring down the operational cost then almost about hundred and fifty more additional employees were also being laid off so that the operational cost will be more cut down to minimum. Senior management salary cuts averaging 22% announced, and negotiations were on with cabin and ground stuff for further wage cuts. This issue makes a more regrettable position for this airliner as this airline once were the worlds foremost luxurious and leading airliner of them all and these are the employees that made this airliner a success. To Salary Cuts and laying of definitely will make them unrest and become a situation with the job security issue, where employees will left wondering what it will bring for them if they just keep on working for a company like
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that. Appropriate human resources assure an organization that the right number and kind of people are available at the right time and place so that organizational needs can be met. This is one of the major HR related issue, as because in these employee hands the SIA what it is now became in these employees hands. It is be these people who were played major role to make SIA to make them a leading airliner in the international market. Employees needed to be acknowledged in a international airliner like SIA this for the first time such incident are occurring, so it will be rational explanatory checking if there is a way to keep check on all of those thing and make a proper justification on all of those things. To cutting jobs of such large number of people for the first time is a huge aspects for HR .So cutting these employees from SIA is a major HR related factors. The unrest that are being seen in the company due to the weak human resource management in the company and also for the SARS and Iraq incident left a negative impact in SIA which should be dealt with capable HRM so that the issue would be minimized. There is a weak Human resource management is deployed that company is made the employee come to believe that the company is using SARS and Iraq war as a convenient excuses to downsizing in Human resource capital. This also became the realized issue that a presence of unf riendly union is where about in the company. In the job cuts in 2002-2003 left a bad taste in SIA employee during the economic crisis. The normally friendly unions had publicly expressed concern over the layoffs and salary reductions that followed in the wake of SARS and the Iraq war. Many among the rank and file viewed these actions as self-serving and suspect since the company had achieved close to normal passenger loads after the specter of SARS had f aded. This distrust was indeed disturbing and seemed to spread across all ranks of employees from pilots to ground crew. This disturbing issue shouldnt be going unrecognized or unnoticed as might not be creating a problem for now, but it can became a problem in a later on progression with time as the situation for the company became more critical . The company is facing more decisive than its previous and if this misunderstanding is not properly dealt with it will backfire on the company as a vital wave in a bad situation. This is a grave HR related problem as this became a unfriendly situation in the company with the widespread skepticism will put a negative impact on the morale of the employee in the further role of time. And consequently this will also put down more negative impact on the airliners passenger service and differentiation strategy. The negative impact upon the employees never were a better thing for the company it brings more harm than that of good even it a company like Singapore international Airlines. And to be exact this kind of situation is first in time to be handled by SIA. They never f aced this kind of situation or a problem before so handling all this measurement can become a major problem for them as they do not understand enough of the problem for not knowing how to deal with these before. Due to people is the core of this business as this is a more of the service related industry where the humane are side taken on very importantly than that of others.
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The Female cabin crews are being deprived by giving them limited time renewal contract which relies on giving them only being less priorities of other cabin crew in the airliner. This violated the equality of emplacement opportunity among the female cabin crew in the company. There is a violation of Equal Employment Opportunity (EEO) in Singapore International Airline as there are sixty percent of the cabin crew is female and the crew had to work through a five years of renewal contract and there only five such renewable contract are permitted only five times. This may be proper for SIA job category but for understanding how only five years only be appropriate for the female crew is major differentiation to be attractive in this line. So in order to do that such contract exists. This shows that SIA clearly not providing similar opportunity to the female exists in the company. Not providing equal amount of salary among both male and female crew though both are being on same position but are not being giving accessed to the same amount of advantages .This arouses the problem of giving dissimilar advantages to the other significant making them a one way to pursue to the fact they are being undermined. The majority here are the f emale crew and if they being only went through 5 renewable contract where otherwise there counterpart are getting more it is violation of the fact that there should be a proper justification in these entire differential contract which should be clarified among both the parties. This is a Human resource related issue as this explores that all the employees in the company are not treated equally in a great airliner such as Singapore International airlines. This is violated issue that give rises to many problem that are still yet to be seen This issue deals with the employees morality towards the company and f ocuses with female getting discriminated in such company is a big deal of human resource factor. Understandings also the factor if the women in the company are being considered to be the minorities or really in where they are being prioritize the factor of limited amount of renewable contract. The opportunity should be equal for all but if that not the case giving understanding and providing with adaptable justification would be righteous way of indication that human resource issues are properly recognized. The generous expatriate pilots compensation package should be clarified among the other local pilots. So that the differentiation wont be there and understanding that comparison compensation is properly justified among both the parties and no discrimination is doing on mutually base pay and benefits. The training and recruitment policy in the SIA intensive, it indeed is global in terms of recruiting pilot from the both the local Singapore pilot who server the country for defense purpose and became the pilots for SIA and the expatriate pilots who are served with more generous salary with pother benef its such as housing, schooling for children and other facilities. These should be balanced and ought to be in a way that local based pilots wont be downgraded on to the point of factor that their compensation is justified to the others. This should be done fairly and with extensive care so that the compensation package that expatriate pilots are getting wont be rigorously high as pilots get graduated from Singapore. Unbalanced salary may become an issue in case from both the parties. SIA should make a proper adjustment among
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the both parties salary into a range so that their will not going to be an any dissimilarities among expatriate and local pilots. The compensation package for pilots with the differentiated issue played a large part in the Human resource management as it is the core issue related in terms of retaining the most important employees in the job. This might create a differential impact on the mind of local pilots that they are being underpaid than the pilots who are being foreigner working among them from different place. Though in a case the benefits remain close to similar in a package of compensation and benefits given to them both but the differentiation needed to be clear among the pilots as it might make a proper problem among them .So keeping them in the job by providing the right terms of salary is also the very jobs of Human resource management.
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9. Recommendations
Af ter analyzing the case and identifying the Human Resource issues effectively in the previous part, it is now time for recommendation to Singapore International Airlines (SIA) to focus on some specific areas to retain their existing employees and diversified customers, to capture new market in new or innovative ways and also to make profit by increasing their operational efficiency for financial viability. We already knew f rom the case that SIA has already established itself as one of the worlds most admired airlines. It has a superior strategy of differentiation but recently its trimming its operating cost by downsizing its employees. They already started to have problem with their operational management system otherwise downsizing wont took place. So there must be some areas that should be focused by them to sustain in the airlines market for longer period. By focusing on Human Resource related issues we have identified in the previous part, now we are going to recommend some solutions that will support the eff orts of quality enhancement of customer service at Singapore International Airlines. By adopting our suggested plans we believe that it can overcome from its operational problem and by taking the full advantage of its facilities to earn a higher profit to operate their business successfully and also to expand its operation throughout the world. In the following one by one, at first we will mention what are the specific problems we have identified, what is our recommendation to solve these current problems, and why those are essential to the company. PROBLEM 1 Singapore International Airlines (SIA) is minimizing their operating cost by downsizing their employees, and unjustified salary cuts in all management levels by using SARS and Iraq War issue. SIA had lain off over 400 employees and 156 cabin-crews in order to trim down its operational cost during the time of SARS and Iraq War. Senior managements salary cuts also averaged 22% as announced, and they were planning to implement further wage cuts. This is one of the crucial issues, as the combined effect of this action could have a serious negative impact on employee morale and passenger service. Employees are the heart of an organization, so, downsizing only weakens a company. There are surely other good ways to avoid this destructive method, and here in the following recommendation we will talk about those ways. Recommendation 1 Singapore International Airlines (SIA) needs a specific and proper compensation plan, by forming a new compensation committee which will help to design a perfect and motivated compensation policy rather than the existed demoralizing one. To sustain in the market with the same leading position HR department of SIA Need to change their current compensation policy of the employees which has already started to demoralize the employees. So HR department need to form a compensation committee to develop a successful and bold,
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imaginative yet practical compensation strategy to motivate all the employees and increase the efficiency of SIAs passenger service. Restructure the compensation philosophy: SIA should develop or restructure a new compensation policy which will motivate the employees more than now. They also have to survey the whole SARS and Iraq war situation about how much it actually harmed the performance of the company. Even if it harmed the performance, then closing several flights in the affected area, and replacing those flights with some new locations could be a good solution. Form a compensation committee: HR needs to form a compensation committee to determine the existing difference of compensation level between the employees and the existing market policy about compensation in same position. After that they need to decide the salary level whether it will offer how much above and at than industry average to motivate the employees. They also have to restructure the benefit programs. Why is it the best solution? For the employer perspective relationship between the compensation and employee satisfaction is a vital element. Everyone wants to be successful by increasing the efficiency and productivity of employees. To motivate employees perfect compensation policy is the right tool, only monetary rewards are not sufficient. Motivation can make impossible to possible that results through non-monetary tools. So restructuring of the compensation level of employees is the only way to sustain in long run and keep on expanding the business beyond the border of home country. Moreover, sacrificing human resource for minimizing operating cost is really a destructive philosophy for any company. SIA needs to get rid of this. Downsize or lay-off will only bring anarchy in the management, and will de-motivate the entire human resource of the company. They can always use other methods like rationing, pay-freeze, pay-cut in their very desperate situation.
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PROBLEM 2 Women employees are not treated equally with male employees in Singapore International Airlines (SIA). So, they are violating the Equal Employment Opportunity (EEO). The term Equal Employment Opportunity (EEO) was created by the 36th President of the United States Lyndon B. Johnson when he signed Executive Order 11246 on September 24, 1965, created to prohibit federal contractors from discriminating against employees on the basis of race, sex, creed, religion, color, or national origin. The Executive Order also required contractors to implement affirmative action plans to increase the participation of minorities and women in the workplace. Pursuant to federal regulations, affirmative action plans must consist of an equal opportunity policy statement, an analysis of the current work force, identification of problem areas, the establishment of goals and timetables for increasing employment opportunities, specific action-oriented programs to address problem areas, support for community action programs, and the establishment of an internal audit and reporting system. Singapore International Airlines (SIA) is violating the Equal Employment Opportunity (EEO) in many ways. Sixty percent of their cabin crews are female and they had to work through a five years of renewal contract and there only five such renewable contracts are permitted. On the other hand, male cabin crews are employed as regular employees in SIA. This clearly shows that SIA is not providing similar opportunities to the female employees in the company thus violating the Equal Employment Opportunity (EEO). Recommendation 2 SIA can start recruiting their male cabin crews exactly the same way they are recruiting their female cabin crews. Then there will be no question of discrimination or violation of Equal Employment Opportunity (EEO). Also if all jobs are on contract, then it becomes easier for SIA to replace or shift positions easily. In my points of view it is always best to recruit employees on contract basis just like hiring Cricket or Soccer Coach. Then employees will be more enthusiastic to boost their performance up, so that the contract is renewed in future. Here in the case of SIA, our recommendation is, all cabin staffs (regardless of their demographic characteristics) should be hired for five years renewable contract, after that depending on their performance it should be decided that, their contract will be renewed or not. This will greatly improve the performance and motivation level of SIA employees, so the overall performance of SIA will be also improved. Also they can practice shifting or replacing their employees from one department from another. By doing this they will conduct a job rotation, which helps employees greatly to learn new things, and adopt with new environment. Why is it the best solution? This is the best solution because of two reasons. First reason confirms that there is absolutely no discrimination in the employee base. The second reason is the boosted up perf ormance factor by
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pressure and job rotation. So, definitely the combine effect of this decision will help SIA to get success quickly. PROBLEM 3 SIA is struggling with its union as the union deemed unfriendly. Without a cooperative union its not possible for any company to achieve success in the long run. The union of SIA is not helping its top decision makers to decide about a particular matter. The union is confused about many things; as a result they cant trust the higher authority properly. So, they became very unsupportive and unf riendly. If SIA fails to recover the whole situation it will become worst day by the, and at one point the entire company will be collapsed. Recommendation 3 Establishing a friendly union can always help and guide about important aspects of an organization. So SIA should immediately fix confusions with its union, and cooperate with them 100%. Establishing a happy and cooperative union might be a tricky one for SIA. But the top management of SIA should always think about the best interest of SIA, and should be ready to sacrifice many things for the betterment of the organization. The first thing to create a strong but f riendly union is the transparency. If both parties remains enough transparent, then no one will have any confusions in his/her mind, so no disputes will take place. The management of SIA has to remember that, the most crucial resource of their company is not the billion dollar aero planes; they are the employees and workers who work day and night to uphold Singapore International Airlines as a brand. Only then the union will trust the higher authority, and will cooperate with them for a common goal. Why is it the best solution? This is the best solution because an organization gets success easily, if its union and top management works together by judging each-others decision and evaluating it. Moreover, if the top management keeps a friendly relationship with the union, then more and more employees will be motivated to work for the company. The working environment gets better than ever, and everyone start enjoying their work.
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PROBLEM 4 Singapore International Airlines (SIA) uses a lengthy, difficult, and costly method of recruitment, training, and development program. Which we think, is not feasible at this moment. Though SIA has a finely tuned recruitment program, they are not using that facility properly. Singapore has a shortage of population so they are highly dependent on other countries f or their required talents. To fulfill their requirements they recruit around 50% of their employees from outside world. Especially in the pilot sector expatriates costs a lot. Moreover, SIA is spending 14 times more per employee as the average Singaporean company. So, they should be very careful about recruiting and selecting their employees otherwise, they will be definitely fall under financial crisis during tough economical condition. Recommendation 4 More structured but less costly recruitment system, and training programs for new comers. Also introducing competency management and fast track will create an added advantage on employee perf ormance. We are suggesting SIA to restructure their existing processes, like- recruitment, selection, training and development, compensation strategy, organizational structure etc. There will be several big changes I the organizational strategies to make this plan possible. They need to change specifically following processes at first: Recruitment & Selection process: The SIA has to think and plan about their recruitment process very carefully. They should try to recruit people from inside Singapore, because that will save a lot of money. They do can depend on expatriates but those should be preferred who lives in adjacent countries like Malaysia, Indonesia, Thailand, or Philippines. That will save a lot of money. Selecting and recruiting employees from Bangladesh, India or China can also be a good option as their expected salary is comparatively lower than other job seekers. Recruitment process should be designed in such a way that it covers the whole country first, and also the neighboring countries. They should avoid gender discrimination at all cost during recruitments; otherwise they will never get good employees for their organization. Training & Development process: SIAs Training and Development process of employees is also not designed properly. Its scattered all around the globe and is very difficult to coordinate. In the given case we have f ound that in Australia they are providing training to their pilots. But there is no specific plan for training them. So they would do proper planning for train them effectively. They can always use their training facilities to train up some Singaporean potential people who will become an asset for their company in near future. Though
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Singapore is very little country, it doesnt have much population. Then again, if SIA can successfully trainup their cadets, those cadets will become powerful managers within a very short period of time. So in this way employees will be trained effectively in a systematic way under an effective plant. Competency management & Fast tracking: For a giant like SIA a more concrete system is needed to evaluate their candidates and employees properly. So, we recommend the competency management system, by using this system they can evaluate their each employees/candidates characteristics and can profile them. By this way, they will easily evaluate who is better for which type of job, and how much time it can take to get promoted to next level. Also by using competency management they can fast track most potential employees, who are inexperienced but with a small guidance they can even challenge their seniors in terms of performance. These people are the future leader of any company, so they are needed to track down at early stage, so that the company can get enough time to prepare them for future leadership positions. Why is it the best solution? It is the best solution because it lies in the very core of a companys system. So, by changing or upgrading these factors, an organization can get pretty good success within a very short period of time. The only thing required here to make these plans work is, proper planning and implementations of company strategy.
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PROBLEM 5 SIA is f acing great competitions from some low-cost carriers in Asia. These low cost carriers can take away a big amount of market share from SIA. SIA is currently facing competitions from some low cost airlines like Air Asia, and Virgin Blue. They are planning to use Singapore as a base to conduct their operations in Asia. Though they have a very small fleet, due to their attractive fares almost all of their flights become full. They are offering very low price to their customers, only USD$10 for a flight from Kuala Lumpur to Penang. Where as same flight may cost 10 times more for airlines like SIA. So, people started to rush on those low cost airlines, and the market positioning of SIA starts to decline. Recommendation 5 SIA should introduce some new low-cost flights under a new sub-brand to overtake the threat of low-cost airlines. By doing this SIA will be able to uplift their image as a more superior airlines than that of their new sub-brand, and will be able to remove the low cost carriers threat completely from the region. Since low-cost carriers are targeting some top airlines like SIA, now its time for SIA to take a sweet revenge against them. SIA shall not lower its cost to fight back these low cost carriers. Instead under a new sub-brand SIA it will introduce some new flights to those destinations where the low cost carriers are targeting. As a result SIA will be completely out of the competition, and their new sub brand will compete with those low cost carriers. Since SIA has a vast experience in the region their new sub brand will be also doing because of this experience. Whereas, new comer low cost carriers will struggle a lot to copeup with the new sub brand of SIA. Why is it the best solution? This is the best solution, because it removes the threat completely. SIA is known f or its superiority in passenger servicing. If it lowers the price then it will become almost impossible for them to sustain in the airlines market. So, we have suggested not to lowering the ticket cost for SIA, instead introducing some low cost flights under a different name to tackle those unwanted competitors.
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10. References
1. Binggeli, U., Pompeo, L., 2002. Hyped hopes for Europes low-cost airlines. McKinsey Quarterly 4, 8697. 2. Costa, P., Harned, D., Lundquist, J., 2002. Rethinking the aviation industry. McKinsey Quarterly, 89100. Special edition: Risk and resilience. 3. Doebele, J., 2005. The engineer. Forbes Asia 1 (9), 3439. 4. Doganis, R., 2006. The Airline Business, second ed. Routledge, Abingdon. 5. Heracleous, L., Wirtz, J., Pangarkar, N., 2009. Flying High in a Competitive Industry: Costeffective Service Excellence at Singapore Airlines. McGraw-Hill, Singapore. 6. International Air Transport Association, 2007. Annual Report. IATA, Geneva. 7. International Air Transport Association, 2008. Annual Report. IATA, Geneva. 8. Outlook November 2004, quoted in Doganis, R., 2006. The Airline Business, second ed. Routledge, Abingdon. 9. Porter, M.E., 1985. Competitive Advantage: Creating and Sustaining Superior Performance. Free Press, New York. 10. Singapore Airlines, 2009. Annual Report, Singapore. 11. Singapore Airlines, 2008. Annual Report, Singapore. 12. Singapore Airlines, 2006. Annual Report, Singapore. 13. Shostack, G.L., 1984. Designing services that deliver. Harvard Business Review 62 (1), 133139. 14. The New Paper, 2006. Slipping up, SIA? June 18.
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Singapore Airlines

Great Way to Fly

BMGMT3202 Strategic Management

BMGMT3202 Strategic Management

BMGMT3202 Strategic Management

BMGMT3202 Strategic Management

BMGMT3202 Strategic Management

BMGMT3202 Strategic Management

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2. External Analysis for Singapore Airlines

2.1 PESTEL Framework:

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2.2 External Environment of Airline Industry (Asian Context):

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2.3 Five Forces Analysis of Singapore Airline:

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3. Internal Analysis of Singapore Airline:

3.1 Competitive Advantage of Singapore Airline

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Singapore Airlines Weaknesses

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Singapore Airlines Opportunities

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Singapore Airlines Threats

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5. Singapore Airlines strategy

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6. SIA s organizational activity system

6.1. Rigorous service design and development

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6.2. Total innovation

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6.3. Profit-consciousness ingrained in all employees

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6.4. Achieving strategic synergies through related diversification and infrastructure

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6.5. Developing staff holistically

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7. A dual strategy of differentiation and cost leadership

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Figure 5. A representation of strategic alignment at Singapore Airlines.

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8. Turbulence on the horizon

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8.1 HR Related Issues

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