Scoot's Low-Cost Carrier Strategy Analysis
Added on 2021-04-21
18 Pages4041 Words321 Views
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Scoot strategic analysisName:Course:
1Table of ContentsIntroduction....................................................................................................................................2First: Value chain of Scoot............................................................................................................21.1 Value chain mapping.............................................................................................................21.2 Critical strengths...................................................................................................................31. 3 Critical weaknesses...............................................................................................................3Second: Key competencies of Scoot..............................................................................................42.1 Competitive advantage1.........................................................................................................42.2 Competitive advantage 2........................................................................................................52.3 Competitive advantage 3........................................................................................................6Third: New market analysis.........................................................................................................73.1 PESTLE data..........................................................................................................................73.2 PESTLE analysis....................................................................................................................83.3 PESTLE application...............................................................................................................9Fourth: Transferability of strengths..........................................................................................104.1 Industry analysis- Rivalry....................................................................................................104.2 Degree of transferability......................................................................................................104.3 Implication...........................................................................................................................11Fifth: Market entry strategy.......................................................................................................125.1 Chosen strategy....................................................................................................................125.2 Reasoning.............................................................................................................................135.3 Execution.............................................................................................................................13Conclusions...................................................................................................................................14References.....................................................................................................................................15
2IntroductionThe Singapore Airline Group (SIA) developed a low-cost airline called Scoot Tigerair Pte. Ltd.in 2011. Scoot mainly aims to serve the medium to long trip category of passengers. It has itsown business model, services and target audience. The newly developed company depends in itsstrategy on strong brand differentiation and cost-leadership. Its distinguishing color is yellow toexpress happiness and brightness. The marketing strategy of the company is directed to youngpeople through social media channels, including Facebook, Instagram and YouTube[ CITATIONSmi142 \l 1033 ].The following section analyzes Scoot value chain, its key competencies, the new marketanalysis, the transferability of strengths, and the market entry strategy.First: Value chain of Scoot1.1Value chain mapping of Scoot
3[ CITATION Fea12 \l 1033 ]1.2 Critical strengthsScoot is a low-cost airline, it has started itsoperations in 2012 to Sydney and the Gold Coast. Itrepresents a rising challenge to the SIA in the key long-distance markets. The company wasintegrated with Tigerairin 2017 to achieve the benefits of integration under one brand name[ CITATION CAP18 \l 1033 ]. The integration enabled the company to be agile to the changes in theindustry through the expansion of its fleet that supports its portfolio strategy. The company hasthe right vehicle that serves the right markets. Scoot witnessed a 15.9% increase in the passengercarriage that exceeds its capacity growth of 11.6% to record 85.7% in 2017/2018. It operates afleet of 40 aircraft that includes 2 A319s, 22 A320s, 10 787-8s and 6 787-9s. It has 43 aircraft onfirm order, including 39 A320neos and four 787-9s.Moreover, Scoot has added 6 destinations, toAthens, Kuching, Palembang, Harbin, Honolulu and Kuantan, to achieve a total destination of 64that operates across 17 countries. During the next year, Pekanbaru, Nanchang and Berlin willjoin the network. Scoot partnered with the Guide Dogs Association of the Blind(GDAB), toassist visually impaired passengers [CITATION Sin18 \l 1033 ].1. 3 Critical weaknessesScoot location in relevance to other competitors makes a barrier for it to achieve the US marketin the long distance trips. The major companies that achieve the US market are Cathay Pacificand Philippines airlines. They have a location advantage that enables them to reach the USmarket without the need for long-range aircraft. Moreover, the Emirates airlines, Qatar airlinesand Etihad airways can access two-thirds of the world markets. Scoot has a weak presence in
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