SIA’s Business Analysis

This report is written on business activity analysis of the firm Singapore Airlines (SIA) Limited being one of the flag carrier airline services of Singapore nation. SIA is headquartered at SCA (referred as Singapore Changi Airport). Through managerial analysis tools like Porter’s 5 forces as well as PESTLE, the paper will further analyze each and every aspect of this Airline service operation.

Running Head: SINGAPORE AIRLINE SERVICES
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SIA’s Business Analysis
SIA: Management
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2/5/2019

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Introduction
This report is written on business activity analysis of the firm Singapore Airlines
(herein after referred as SIA) Limited being one of the flag carrier airline services of
Singapore nation. SIA is headquartered at SCA (referred as Singapore Changi Airport)
(Singapore Airlines, About us, 2014). Through managerial analysis tools like Porter’s 5
forces as well as PESTLE, the paper will further analyze each and every aspect of this Airline
service operation. Post analysing all aspects of the SIA, management recommendations will
be provided to SIA’s management for a sustainable future.
SIA is one of the best airline services of the universe and Asia as well. It is the
company who won 3 top titles in a single year and the titles were ‘best first class airline seat’,
‘best airline in Asia’ and ‘best first class’. SIA has begun its career in airline services field
during 1947 in the name of Malayan airlines (MA). Later on, in the year 1963, the airline
service firm rose as Malaysian Airways limited (MAL). Ultimately, during the year 1972 SIA
rose with the world-class services for their global travellers. This way, based on (Singapore
Airlines, Annual Report 2013, 2014), we can say that SIA is an international airlines service
company which is highly dedicated for providing luxury air transportation services and to
exploit company’s revenues for the benefit of their employees as well as stakeholders.
Management tool PESTLE: SIA
PESTLE analysis and relation amid the elements of PESTLE for Singapore
country
Political factors of SIA
As the political risks of Singapore’s are low hence the Political and Economic Risk
Consultancy (referred as PERC) also declared that this nation possesses the minimum
political risks among the entire continent. In addition, leaders and legislatures who lead the
nation are primarily chosen by the public of the Singapore (Ministry of Foreign Affairs
Singapore, 2016). This is the reason that Singapore is a self-governing country.
The Economic aspects of SIA
The functional area for SIA is Singapore and this economy is a free-market economy
for SIA’s effective operation. Besides, it is developing at a relatively high speed than others.

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Moreover, Singapore’s per-capita income is also the maximum in the whole ASEAN space.
Singapore’s bribery-free atmosphere supports SIA as well as the global business segment
which makes Singapore the most competitive country of the Asia. Singapore’s labor is
educated and motivated which strengthen country’s economy and hence financial and legal
business frameworks helps country to grow more (Cook, Tanner, & Lawes, 2012).
Furthermore, the few restraints of Singapore economic enactment are as follows:
 Growing labor budget
 Scarcity of Labor (Kaur, 2015).
 Decline in total productivity of nation.
The Social aspects of SIA
Through the social aspects perspectives, Singapore is more like rest Eastern countries.
Singapore follows traditional family moral values which show that the nation is holding the
collectivism culture among their societies. Yet the millennials of the country are trending to
follow western culture majorly. Moreover, Singapore country’s residents work very hard to
fulfil the daily desires (Chan, 2009). Therefore, social behaviours of Singapore’s public have
augmented nation’s overall productivity to a huge level.
The Technological aspects of SIA
The author of this paper is suggesting that key driver of the improved life style as well
as quality of life in Singapore is technological progress of this nation. The digital
technologies have played a major role in Singapore’s development as a high-tech nation.
Hence, technology improved communication and increased connectivity among people which
helps in better execution of business and entrepreneurial activities (Wirtz & Johnston, 2009).
Legal aspects of SIA
In this context, Singapore’s government reflects that major growth of any business
depends upon transparent, advanced and market heartening legislations as well as regulations.
Thus, well-organized legal as well as regulatory business setting supports economic growth
as well as industrial development of Singapore and SIA (Heracleous & Wirtz, 2014).

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Environmental aspects of SIA
Singapore’s Environment Ministry and Anti-Pollution Unit operates persistently in
order to maintain air quality and rest environmental factors as well. However, various
pollutions caused through transportation are the critical issues in Singapore’s urban areas.
Thus, after analysing all PESTLES’s environments, Singapore is declared as an incredible
country that holds highly motivated and talented public. The above discussed relationship
among elements of PESTLE’s analysis provides great business opportunities to SIA
worldwide (Inderwildi & King, 2012). In this way, Singapore’s business progress at national
and international platforms is majorly profited by government policies as well as actions of
the country.
The PESTEL analysis of SIA
In this way, Singapore’s business welcoming environment has heightened business of
SIA to an enlarged extent. In addition, continuous development of Singapore made SIA a
main competitor in the domestic and international market as well. The PESTLE analysis is
also depicting that hardworking citizens and compulsory primary education both are the bases
of SIA’s success all around the world. It is a well-known fact that country’s stable and
efficient regulatory policies enabled SIA to become the topmost airline service worldwide. In
addition, economical factors also influence airline industry because of the fact that aviation
industry is highly inter-related to national, regional as well as international economic
development. Therefore, the better economic state of the Singapore in terms of interest rates,
business cycles, GDP growth as well as crude oil costs reinforces the SIA’s business running
worldwide (Bloomberg BusinessWeek, 2012). Furthermore, the social environment of
operational areas has an exclusive impact on the airline industry because every consumer is a
social animal first. Hence, consumers’ social performance is hugely inclined to social
standards and undeclared rules of an explicit group. In this way, good social environment of
Singapore workforce has left a positive impression on SIA’s international business
(Heracleous, Wirtz, & Pangarkar, 2008). Moreover, technological advancement operates as a
main driver of cultivating airline efficiency, dipping operation costs, enlightening consumer’s
experience, branding customers’ service thus SIA is developing more constantly like none of
the other airline service in the whole universe (Fu & Oum, 2014).

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Porter’s 5 Force model Analysis for SIA
Generally, Michael Porter’s 5 forces model is utilised to discover the operational
surroundings in which the firm works for producing an economical advantage. According to
the Michael Porter’s theoretical model, there can be five elements contain novel entrants’
threats, alternative services threats, merchants’ power, purchaser’s power, and the
competition in the operational market. Hence, porter’s 5 forces model analysis for SIA is as
follows:
A new entrant threat: Weak
In this context, this threat of novel contestants in the operational business is weak for
this airlines because the deregulation in whole airlines industry consequences in lesser fares
and higher load factors. Moreover, reason behind low threat of novel entrants is that flight
services of SIA have been improved to a large extent during the last decade. On the other
hand, various existing airline services are improving their services day-by-day at a constant
speed. The old airline services have left extra-ordinary impact on their customers through
their good air transportation services hence new entrants will need to prove them first
(Pearson & Merkert, 2014).
Suppliers’ bargaining power: strong
For the SIA, suppliers’ bargaining power is strong as the key supplier for the
maximum of resources is Malaysian Airlines (MA). MA is dealing with various other
manufacturers of products such as Fokker Boeing, Airbus as well as supplies the aircrafts and
other electrical fragments to the global airline industry. Therefore, MA being the key supplier
holds more power than the SIA in this aviation business (Riwo-Abudho, Njanja, & Ochieng,
2013). Hence, the suppliers of SIA own strong bargaining power being the largest suppliers
of the industry which is also helping SIA to grow more.
Competition in the airline service industry: comparatively high
SIA provide varied plane services, which has left a considerable effect on the
consumers of the airline. In addition, SIA allowed their consumers to distinguish the flight
services they travel from the perspective of quality as well as budget. In this way, the
customers of SIA can effectively compare various airline firms in terms of level of offered
services as well as worth of the offered services. Thus, SIA is able to gain competitive
advantage by offering quality-in-flight services to the consumers (Reddy, 2018). Although,
the rivalry in the airline services is high due to many big contestants in the world-level airline

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services those are budget airline services yet the competitors are not capable to provide
enough high-quality services as comparative to the SIA.
Purchaser’ bargaining power: comparatively high
The consumers’ bargaining power for SIA is resilient because many other options are
available in the market. It means that the customers of SIA can easily switch over the rest
options available for travelling through flights. Thus, major reason behind superiority of the
purchasers’ is less prices provided through other rivalry airlines in the international market.
In addition to that, digital era’s consumers are intelligent, smarter and highly educated hence
they have the knowledge regarding on-going prices as well as quality offered through
different airline services in the market. On the other hand, millennial consumers have become
budget sensitive, and using digital booking system over physical booking of the air tickets
(Reference for Business, 2018). In this way, since SIA’s customers’ are having various
options available for flight services, the buyers’ power has increased to a large extent.
Alternative services threats: Moderate
This threat is about substitute services available in the international market for the
consumers. The customers can choose among various alternatives like buses, trains, ships
cruises, self-drive and cars in the global transport system. Moreover, due to high-
technological advancements everywhere, new era’s customers are no longer reliant upon sole
option for transportation. Thus, till now the alternative services threats for SIA are moderate
yet they will increase with the technological advancements rise in future (Richards, 2012).
Recommendations to Management
In this modern era, the major challenges for the efficient working of SIA are currency
fluctuations, intense competition and economic uncertainty in the international airlines
market. Hence, over conducting two analyses include porter’s 5 forces and PESTLE; few
recommendations to the SIA management are necessitated (Riwo-Abudho, Njanja, &
Ochieng, 2013). Besides, the recommendations provided here are intended to assist SIA for
keeping their outstanding place among rest airline services of the world. Thus, 4 main
managerial recommendations are listed below:
Management Recommendation first
The SIA needs sustaining the supremacy and remaining on top of the rivalry in global
airlines market. For implementing the above, SIA should effectively understand the business

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strategies of popular businesses like Cathay Pacific, Virgin Atlantic and British Airways for
enhancing the quality and comfort of services which SIA provides to the customers
(Richards, 2012). Therefore, SIA requires constantly differentiating themselves by assessing
and evaluating strengths, weaknesses as well as major strategies of their topmost competitors
in global airlines business.
Management Recommendation second
The second important recommendation to SIA’s management is that SIA must
continue to be competitive by offering superior service and luxury comfort to their consumers
as in near future the global airline market will undoubtedly expand exponentially on the basis
of the demand of the millennials. Additionally, for preserving SIA’s image as the topmost
airline of the globe in terms of providing best airline services to the customers, SIA must be
evolved with the new purchases, researches and installation of novel technologies based
aircrafts as well as higher efficient space beds.
Management Recommendation third
The third management recommendation to SIA is that they should discern themselves
more by adopting boosted communication tools and media channels in a way that overall
communication service of the airline can be upgraded. The other main business strategy to be
adopted by SIA is offering augmented communication channels as well as services to
customers. In addition, future raffles class amenities and services of SIA should include new
communication features like surfing of particular internet content should be allowed in flights
(Bloomberg BusinessWeek, 2012). For the business professions, sending and receiving
emails should also be allowed by the SIA. Apart from satellite telephones, other new features
like connecting laptops and perform important online business activities during air travelling
with the SIA plane will offer great competitive advantage to SIA.
Management Recommendation fourth
The fourth recommendation to SIA is that they should promote Changi Airport’s
freight as well as engineering facilities to the new inter-Asian airline services (Amit & Zott,
2012). Moreover, SIA has been awarded for fostering innovation into their business therefore
SIA must continue with the complimentary products offering strategy as well as maintain the
innovation to please their consumers.

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Conclusion
Finally, it has been examined that the Singapore Airlines possess a resilient
competitive profit over others while offering high-quality services to their customers.
However, SIA’s business is influenced through the increased oil prices and on the other hand
the flights demand is dwindling among the global travellers. Thus, the report has investigated
the business environment as well as the resources held by the SIA along with the threats and
opportunities facing by the SIA. Additionally, 4 vital recommendations to the management of
SIA have been suggested to sustain enlarged competition in the global air transportation
market.

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