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Singapore Airlines

Autor:   •  February 22, 2019  •  3,484 Words (14 Pages)  •  131 Views

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- Bargaining power of customers

Airline passengers are made up of business travelers and discretionary travelers. Business travelers are not focus on the price, instead short travailing time and comfortable journey is their first choice. Moreover, the business class customers can admission to exclusive airport lounge and priority boarding had been promote to retain customer's loyalty. For the discretionary travelers, the cost is a main concern for them. So these part of travelers always buy the lower price tickets from the travel agent and SIA will generally give them a certain percentage of commissions for sale.

- Bargaining power of suppliers

Boeing and Airbus are the mainly aircraft suppliers for SIA. SIA is Boeing largest customer on 777 series plane and first customer for Airbus 380, which plans to spend around SGD 11,800million in the next five years on aircraft. SIA have its own subsidiary Singapore Airport Terminal Service and SIA Engineering for ground handling service and aircraft maintenance and servicing.

- Threats of substitutes

There are many substitutes in terms of long traveler such as Railway High-speed, train and cruise boat. These travel tools generally are cheaper and spend a lot of time. However, the air travel is more expensive than the others but the absolute advantage on time. So, the threats of substitutes are relatively low.

- Threats of competitive rivalry within the industry

In these years, the competitive rivalry form low to high, but it occurs on a route-by-route basis. Different airlines are providing several well routes, such as LA to London or Paris to HK, rivalry can be very intense. In order to occupied the market, the airlines have to adopt price-cutting strategies or ensure that the quality of their service is very high. On the other hand, the airlines if operate some monopolize routes, competition tends not to be as fierce. For example, SIA makes a good profit in recent years has been attributable to the capture of the Kangaroo Route (Australia to New Zealand).

Internal Analysis

In this stage, we use VIRO analysis model can help us more easily to understand competitiveness of Singapore Airline, and thus see the impact of the organization’s core competence on Singapore Airlines.Core competencies have four criteria.

Value: Singapore airlines valued the high service performance and can provide all kinds of services and options to customer, also as to bring competitive advantage to the company. The airlines have many routes to all over the world and also to meet the different needs of customers, that become a competitive advantage of SIA.

Rare: Nowadays, SIA is a power brand in the world because it is Boeing largest customer on 777 series plane and first customer for Airbus 380. What;’s more, the customers can access their personal media such as iPod or iPhone in-flight, only a few companies have this ability. Singapore government plays an important role in the country's air space, deal with the landing rights of foreign flights and to establish new landing rights with other countries. This directly affects the SIA that offer competition and it will face.

Irreplaceable: Till date, Singapore Airlines group of companies provide various service, for example: passenger and cargo air transportation, airport terminal services, air charters and tour wholesales and related activities. Singapore Airlines is one of the largest airline businesses in Asia and have the profound cultural background and history. SIA with these capabilities will not be easily to imitated or substituted.

Organizational- SIA employs approximately 12,000 people in Singapore, but the low level of employee responsibility and the management division are poor. So the company crate the comprehensive training programmes have helped develop its employees. The management of SIA also pay attention to emphasize on importance of maintaining good and healthy work culture inside the organization.

In conclusion, the SIA route has a competitive advantage, and its support is based on the VRIO framework.

4.1 SWOT

Strengths

Branding:

Singapore airline is well known for its branding from all over the world. Singapore airline is the one that has the most profit internationally. It is the strong brand management that driven primarily by its top management. Singapore airlines brand is unique in the way that the boardroom takes commitment of leadership of the brand strategy unlike many other airlines. The Singapore Airlines keeps enhancing innovation as an important part of the brand, and the ambience and experience are key factors of their success today.

Quality of service:

The quality of service of Singapore airline plays a very crucial part in the strength of the company. Behind the professional performance of cabin crews, Singapore airline gives their entire cabin crew rapid trainings to maintain their high quality of service. They constantly educate their cabin crew including Singapore girl, in order to fulfil the world class airlines service standard. This is why Singapore airlines is always at the top at customer satisfaction survey about in-flight service observed by the independent institution.

Weakness

Singapore airlines has dedicated itself strongly to positioning branding name and quality of services, and in order to maintain the high standard, it is of a high financial costs. By purchasing of new and young aircrafts, it proves to have a bigger fleet space and thus will create a high parking and maintenance cost. All these expenditures will be a weakness in down times.

Opportunities

The expansion into key aviation markets has provide Singapore airline to break through its limited space as compared to before, and this will increase market shares worldwide. Alliances, code-sharing with other aviation company increases Singapore airlines opportunity to provide better services and also to cut costs.

Threats

After terrorist attack on September 2001 in united state, it has been confronted with a tremendous decline in international tourism. The airline industry became more competitive in Asian region as there are more than thirty country operate around thousands of airline company.

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