Pestle and Porter's Five Force Analysis of Singapore Airlines

This report provides a detailed analysis of the external business environment of Singapore Airlines through Pestle and Porter's Five Force Analysis. It includes political, economic, social, technological, environmental and legal factors that influence the functioning of the company. The report also evaluates the competition level prevailing in the market through Porter's Five Force Analysis and provides strategic recommendations for the company.

Running head: Singapore Airlines
Introduction to Management

Singapore Airlines
Table of Contents
Introduction...............................................................................................................1
Pestle analysis of Singapore Airlines........................................................................1
Porter Five Force Analysis........................................................................................3
Strategic recommendations.......................................................................................5
Conclusion.................................................................................................................6
References.................................................................................................................8

Singapore Airlines
Introduction
Singapore Airlines was established in January 1947 and it is known as a wholly owned
subsidiary of the government. The services offered by the company are related to air
transportation, in-flight services and also ground services. In 1947, the company started with the
twin-engine Airspeed consul under the Malaysia Airways. In 1972, the organization created two
entities like Malaysian airline system and Singapore Airlines. The hub is Singapore change
airlines. The slogan of the company is "A great way to fly".
The company is managed or controlled by the key people who are Peter Seah Lim Huat
and Goh Choon Phong. There are more than 25,194 employees who are conducting their routine
activities in the organization. It has been seen that company has achieved goodwill in the market
just because of the effective services provided in the country. The motive of the company is to
offer effective services so that satisfaction level of the customers can be enhanced. It has been
seen that company has a link with the holding company named as Temasek Holdings which have
56% of the voting stock (Singapore airline, 2018). It has been seen that company is considered as
a five-star standard carrier in Singapore it is a subsidiary of the Singapore government.
Pestle analysis of Singapore Airlines
Political Factor
It has been evaluated that political factor has an influence on the external business
environment of the Singapore Airlines. This refers to various policies of the government that
focuses on the intervention of the particular economy (Olson, Slater, Hult & Olson, 2018). For
instance: The Singapore Airlines has taken into consideration the Air India by managing the
severe blow to privatization blow of the Indian Government. This has also become a barrier in
the political context for the overall activities of the organization (Chernev, 2018). The changes
also affect the activities of the company of the Singapore airlines and also in context to China
aviation. It also boosts the private airlines which are conducting their activities in the airline

Singapore Airlines
industry. There are many several limitations to investment as per the government body. Also, it
has been seen that company consider the fair trading law, consumer law and also five freedoms
of air (Karatepe, 2016).
Economic factor
The economic factors of the company are related to the overall rate of interest, taxation
policies and also with the foreign exchange rates. The economic factor that gives impact on the
business environment for the Singapore Airlines takes into consideration the emerging markets
of Asia and also it helps in strengthening the overall Singapore dollar of comparison is made
with the foreign currencies (Armstrong, Kotler, Harker & Brennan, 2015). It has been evaluated
that company offered to consider a stake in the China Eastern Airlines against the 7.3 billion
Hong Kong that has given many challenges as the shareholder. Also, the global demand is
reducing the concerned of the business environment. Stabilization of the fuel cost is also given
impact on the business environment of the company. The price rates of the fuel also influence the
economic condition of the aviation industry and it has given influence on the overall activities of
the company (Wirtz & Heracleous, 2016). The department of engineering of Singapore Airlines
has focused on the repairs and also on maintenance so that large market share can be covered by
the company. The company is also known as the first carrier that has focused on the products so
that interests of the passengers who are conducting on board without the requirement of offering
power to the laptops can be served. The organization has considered the sun as a specific
microsystem that helps in the power of the productivity that suite in the flight (Fan & Lingblad,
2016).
Social factor
The social factors that affect the social environment of the company are related to altering
the preferences of the customers. The organization has required to focus on the changing factors
related to taste and preferences of the customers so that it can be easy to make the company
products and services more customer-centric. There is also increase in the disposable income of

Singapore Airlines
the customers that have turned into the greater purchasing power of the customers (Kotler, 2015).
The company focuses on the steps related to society and also consider the steps to reduce the
overall carbon footprints (Heracleous & Wirtz, 2014). The activities of the company are also
affected by the weather and also by the seasons. The organization also focuses on considering the
use of cleaners and also with the greener aircraft so that sustainable activities can be conducted
effectively (Banerjee, 2017).
Porter Five Force Analysis
It has been seen that it is an important structure that helps to analyze the overall
competition level in the specific industry. It also assists in strategy development of the company.
Porter five force models helps to analyze the effect of the various factors on the activities of the
company and also it helps the company to give its services to the customers and helps to attain
profits.
Industry rivalry
It has been seen that in this section the Singapore airlines face the issue in the aviation
sector and also discloses the information that there are many services present in the market that
conduct the activities in the niche markets. It can be analyzed that there are price wars that take
place between the airlines. Also, it has been seen that industry rivalry is moderate in the current
scenario.
Potential New Entrants
When the evaluation of potential entrants in the market of the Singapore airlines has
done it has been seen that it is weak. This is because the industry wants ore amount of capital
and also the market is saturated. There is also high congestion in the airports and also the
government focuses on enjoying more benefits in the activities of the company. It has been
analyzed that it is difficult for other carriers to enter the market if the focus is given to the
economic factor. There is also enhancement in the challenges in attaining the airport slots as
Singapore as one airport. The cost of the activities and also the political factors enhance the
barriers to entry into the new players (Malhotra & Peterson, 2014).
Threat of substitutes

Singapore Airlines
It is one of the important factors if the focus is given on the porter five force models. It
has been evaluated that this factor reflects on the information related to the threat of substitutes if
Singapore airlines are taken into consideration and it is seen that it is moderate. In case of SIA, it
has been seen that Threat of substitute is moderate and also there are various low-cost carriers
who are conducting their activities in the aviation industry and also the provision is high because
of the high railway services. Also, there are many technologies in context to communication that
can give the threat of substitution to the carrier services of the Singapore airlines. It is important
for the company to emphasize on offering effective services (Sheth & Sisodia, 2015).
Bargaining power of the purchasers
The bargaining power of the purchaser is also moderate in the Singapore airlines. It is
moderate because the switching cost is also low of the various airlines. The management of the
Singapore airlines also focuses on introducing the various loyalty reward programs that have
enhanced the loyalty of the consumers and also assisted to retain more consumers. When
customers are satisfied it can be easy for the company to accomplish overall goals and objectives
in an effective manner. The internet also enables the customers to evaluate the prices of the
services which are given by the various companies and also to consider the airlines of their
choice. The prices are evaluated which help the customers to remain satisfied towards the
activities of the company (Karatepe & Vatankhah, 2014).
Bargaining power of the suppliers
The level of competition can also be evaluated by focusing on the bargaining power of
the suppliers of the company. The evaluation shows that the bargaining power of suppliers of the
organization is strong and also it is related to the duopoly of various Boeing as well as the Airbus
of different planes. It can be seen that there the cost is not controlled and also the power of the
suppliers enhances. The bargaining power is strong as there are many suppliers who are offering
various services in the market (Wu, Gander, van den Berg & Signal, 2016).

Singapore Airlines
(Source: Porter five force analysis, 2018).
Strategic recommendations
A detailed evaluation of the activities of the company assists in collecting the proper
information that helps in creating various strategic choices of the company. The strategic
management of the organization can help to employ the strategies related to Ansoff's matrix and
also porters generic strategy at the time of implementing the various alternatives procedures of
creating the growth strategy. The four recommendations are related to
a.) Strategy related to diversification: The management of the company can
take into consideration introduction of the brand transmit hotel which is managed by the
airline company. This is taken into consideration as a good opportunity for the carrier
endorse related to the all-inclusive package for the travelers. This is one of the effective

Singapore Airlines
strategies that can help the company to differentiate its offering in the market and also it
considers the stiff competition in the saturated market of the airline industry.
b.) Market penetration: the management of the company can focus on
considering the penetration in the new markets. This airline industry conducts the
activities in Africa and also its targets on the leisure passengers. The organization can
also take into consideration the introduction of a family package that is included in the
offers. The company management can also focus on entering into the partnership with the
other organization who is giving various safaris and also the facilities related to camping
and also the accommodation related to food and accommodation.
c.) Niche market: it is important for the management of the company to focus
on considering the use of the airbuses that provide banquet halls. The space given by the
company should have a space of 160 to 250 passengers. This can assist the organization
to focus on targeting a niche market and also it is important for the individuals who are
conducting conferences and other events in the flights. The events conducted in the flight
should be related to the innovative idea that can safeguard the time and money of the
passengers who are traveling.
d.) Product development: the Singapore airlines management should consider
proper segmentation of the market and also it creates the service of the company if the
focus is given on the needs and requirement of the target segments of the customers. The
market also considers many types of customers and also the products. So, it is important
for the marketers to consider the target segments so that opportunities can be offered
effectively. The consumers of the company can be divided into various sections and also
there are different ways that focus on demographic, geographic and also behavioral
factors of the segments (Paroutis, Heracleous & Angwin, 2016).
Conclusion
By focusing on the overall report it can be concluded that external business environment
of the company helps in attaining an insight towards the political, economic, social,
technological, environmental and legal factors and also influence is seen on the proper
functioning of the company. Therefore, the recent study also shows the proper analysis of porter
five force models so that proper understanding can be made with the level of competition in the

Singapore Airlines
market. The five factors help to access the competition level prevailing in the market. In the last
phase of the report, the proper evaluation is done of the present strategic recommendations by
focusing on the Ansoff matrix based challenges that help to evaluate the porter five forces and
also pestle analysis. This can help the company to accomplish goals and objectives in an
effective manner and also the success can be achieved in the competitive market.

Singapore Airlines
References
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education.
Banerjee, S. B. (2017). Corporate environmentalism and the greening of strategic marketing:
Implications for marketing theory and practice. In Greener Marketing (pp. 16-40).
Routledge.
Chernev, A. (2018). Strategic marketing management. Cerebellum Press.
Fan, T. P. C., & Lingblad, M. (2016). Thinking through the meteoric rise of Middle-East carriers
from Singapore Airlines' vantage point. Journal of Air Transport Management, 54, 111-122.
Heracleous, L., & Wirtz, J. (2014). Singapore Airlines: Achieving sustainable advantage through
mastering paradox. The Journal of Applied Behavioral Science, 50(2), 150-170.
Karatepe, O. M. (2016). The Effect of Psychological Climate on Job Outcomes: Evidence from
the Airline Industry. Journal of Travel & Tourism Marketing, 33(8), 1162-1180.
Karatepe, O. M., & Vatankhah, S. (2014). The effects of high-performance work practices on
perceived organizational support and turnover intentions: Evidence from the airline
industry. Journal of Human Resources in Hospitality & Tourism, 13(2), 103-119.
Kotler, P. (2015). Framework for marketing management. Pearson Education India.
Malhotra, N. K., & Peterson, M. (2014). Basic marketing research. Pearson.
Olson, E. M., Slater, S. F., Hult, G. T. M., & Olson, K. M. (2018). The application of human
resource management policies within the marketing organization: The impact on business
and marketing strategy implementation. Industrial Marketing Management, 69, 62-73.
Paroutis, S., Heracleous, L., & Angwin, D. (2016). Practicing strategy: Text and cases. Sage.

Singapore Airlines
Porter five force analysis.(2018). Logiq3. Retrieved from: http://www.logiq3.com/blog/how-to-
competitive-analysis-using-porters-five-forces-framework
Sheth, J. N., & Sisodia, R. S. (2015). Does marketing need reform?: Fresh perspectives on the
future. Routledge.
Singapore airlines.(2018).Singapore airlines. Retrieved from:
http://www.singaporeair.com/en_UK/in/home
Wirtz, J., & Heracleous, L. (2016). Singapore Airlines: Managing Human Resources for
Costeffective Service Excellence. In Services marketing: People Technology Strategy (pp.
695-703).
Wu, L. J., Gander, P. H., van den Berg, M. J., & Signal, T. L. (2016). Estimating long-haul
airline pilots’ at-home baseline sleep duration. Sleep Health: Journal of the National Sleep
Foundation, 2(2), 143-145.