PESTLE and Porter's Five Forces Analysis of Singapore Airlines

This report provides a detailed analysis of Singapore Airlines using PESTLE and Porter's Five Forces models. It includes strategic recommendations for the company to achieve a large market share.

Running head: Singapore Airlines
Introduction to management

Singapore Airlines
Table of Contents
Introduction...............................................................................................................1
Nature of the business...............................................................................................1
PESTLE ANALYSIS................................................................................................1
PORTER FIVE FORCE ANALYSIS.......................................................................3
Strategic recommendations.......................................................................................5
Conclusion.................................................................................................................6
References.................................................................................................................7
Introduction
Singapore Airlines is one of the largest airline companies in Singapore. The company is awarded
5-star standard carriers in Singapore and it is the subsidiary of the Singapore government. It can
be evaluated that company is based at the change international airport and flight services are
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Singapore Airlines
offered by the company in more than 45 nations and also across 94 destinations worldwide. The
company is listed on the SGX and is one of the biggest carriers in the market if the focus is given
on the market capitalization. Singapore Airlines conduct more than 102 aircraft which have an
average fleet of 7 years. The geographic segments of the Singapore airlines are East Asia,
Europe and South West Pacific (Bok, 2015).
Nature of the business
The company created itself as the flag carrier of Singapore and the connection is with the 20
airports which are situated in 18 different locations. The destinations are Europe, Australia and
also many segments of the Middle East. The company focuses on the various strategies related to
differentiation itself by focusing on the service innovation and also it has been analyzed that
there are seven schools that offer education to the cabin crew and also the services related to
information technology and flight services (Taneja, 2016).
PESTLE ANALYSIS
Political factor
Political factor gives influence on the external business environment of the company. This is
related to the policies of the government that emphasizes the intervention of the specific
economy. It has been analyzed that company has focused on Air India so that the blow of
privatization can be managed by the Indian government. This has also become a hindrance in
the overall political factor for the operation of the business.
Social factor
There are various factors that impact the social environment of the organization. The factors are
related to the need and preference of the customers. The company focuses on the approach
related to customer-centric. There is also enhancement in the overall disposable income of the
consumers that have changed the purchasing power of the consumers (Kaufman, 2015).
Economic factor
The economic factor of the organization is concerned with the entire rate of interest, taxation
policies and also with the foreign exchange rates. This factor affects the business environment of
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Singapore Airlines
the company which focuses on the emerging markets of Asia and it also assists in strengthening
the entire Singapore dollar of comparison with the currencies of foreign. It can be analyzed that
the organization has given focus on the stake in China Eastern Airlines that are against 7.3
Million and also there are many issues which are faced by the stakeholders. It can be seen that
the demand is minimizing and it is related to the business environment. The fuel cost is
stabilized which has given effect on the business environment of the organization. The rates of
the fuel are also influenced by focusing on the economic factor related to the aviation industry
and it has influenced the operations of the Singapore airlines (Asif, 2015).
Technological factor
This factor focuses on the technology in which it has been seen that the efficiency related to fuel
is taken into consideration so that operations can be conducted easily. The engineering
department of the company has emphasized on the overall repairs so that big market share can be
grabbed. Singapore airlines are considered as a first carrier that has given emphasis on the
overall products so that the passengers who are availing the services on board without the need
of giving power to the laptops can be served. The company has focused on the sun as a
microsystem that assists in enhancing the productivity and also focuses on the flights (Joo & L.
Fowler, 2014).
Environmental factor
In this, it has been seen that the focus is given to the general public of Australia. Singapore
airlines emphasize on the methods concerned to the society and also take into consideration the
steps so that carbon footprints can be minimized. The operations of the organization are
impacted by the weather and also by the different seasons. The company emphasizes the use of
the cleaners so that the operations can be completed in a sustainable manner (Heracleous &
Wirtz, 2014).
Legal factor
The variations also affect the operations of the organization and also it focuses on the China
aviation. It helps to encourage the private airlines which are operating their operations in the
overall airline sector. There are various limitations related to investment by considering the
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government body (Jiang, Baxter & Wild, 2017). It has been seen that Singapore airlines take into
consideration the fair trading laws and also the law related to the customers so that in the right
direction the activities can take place. The focus is also given on the five freedoms of air which
helps in managing the operations of the Singapore airlines. The company focuses on the legal
procedures so that customers don't face any hindrance in conducting the operations of the
company.
PORTER FIVE FORCE ANALYSIS
When the focus is given to the five forces it has been evaluated that it is considered as an
essential structure which helps the company in evaluating the overall level of competition. It
helps in the development of the strategy of the Singapore airlines. This model focuses on
evaluating the various aspects which affect the activities of the company and also it offers
effective services to the consumers and assists in attaining the overall profits (Holloway, 2017).
Industry rivalry
It can be evaluated that in this aspect the company suffers from various problems in the aviation
sector and it helps to open all the information related to the services given or offered in the
market. The activities are operated in the niche markets. It can be evaluated tha1t there are wars
related to a price that is created by various different airlines. It has also been evaluated that in
the present scenario the industry rivalry is moderate (De Neufville, 2016).
Potential of the New Entrants
When the focus is given on the market of Singapore it can be stated that the potential entrant is
weak this is just due to the huge capital which is invested in establishing the company and also it
has been seen that market is saturated. It can be analyzed that there is high congestion in the
airports and the focus is given by the government on the various advantages related to the
operations of the company. There are difficult carriers to enter the market if the analysis is made
of the economic factor. The challenges are increasing in achieving the airport slots Singapore
airline is only the company. The overall cost of the operations and also the political factors are
increasing the overall barriers to the entry into the new players.
Threat of substitutes
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This is known as an essential factor when the emphasis is given to the model. This factor
showcases all the information which is linked with the substitution of the services or the
products. It has been seen that threat of substitute is moderate if the focus is given on the
Singapore airlines. Substitution rate is moderate and also there are many low-cost carriers who
are completing the entire operations of the aviation sector. The provision is also high when the
emphasis is given on the high railway services. There are many technologies which are related to
communication. These technologies are the threat of substitute to the carrier services of the
company. Proper services should be taken into consideration by the company so that in the right
direction activities can be conducted (Bateson, Wirtz, Burke & Vaughan, 2014).
Bargaining power of purchasers
Power of purchaser is moderate if Singapore Company is taken into consideration. It can be said
as moderate as the switching cost is less of other airlines. The management of the company
emphasizes on the loyalty reward programs so that customers can avail more and more services.
The internet has also enabled the consumers to analyze the prices of the overall services which
are offered by the company.
Bargaining power of the suppliers
In this aspect, the focus is given to the overall competition level present in the market. the
bargaining power of the company is strong and it has a link with the duopoly of many Boeing
and the Airbus of many other planes. It can be stated that the overall cost is managed and also the
power of the supplier's increases. The overall bargaining power of strong as it can be analyzed
that there are various suppliers who are giving various services in the market. this will also help
the company to achieve goals.
Strategic recommendations
By focusing on the entire analyzes it has been seen that the operations of the Singapore airlines
help in gathering the data which assist in managing various strategic choice of the organization.
The strategic management of the organization can help to consider the various strategies which
are concerned to the Ansoff's matrix and in this, the porter generic strategy is related that help in
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Singapore Airlines
implementing many alternatives methods of enhancing the growth in the market. There are four
recommendations on which focus should be given
Development of the services
It has been seen that company should take into consideration proper segmentation of the entire
market and also it enhances the services of the organization if the emphasis is given on the entire
need of the target segments of the consumers. The market also takes into consideration various
types of consumers and also focus is given to the services offered by the company. It is essential
for the marketers to focus on the target segments so that the entire opportunities can be given in
the market. The customers of the Singapore airlines should be divided into many sections and
also there are various methods that emphasis on the overall demographic and also on the factors
related to the behavior.
Market penetration
The management of the organization should emphasize on focusing on the penetration of the new
markets. It has been seen that the airline industry mostly operates the operations in Africa and
emphasizes on the leisure passengers. It can be analyzed that the company should emphasize on
the entering into the partnership with other airline sectors who are focusing on giving the
services related to campaigns and also quality food to the customers.
Niche market
It is essential for the Singapore airlines to consider the services of the airbuses that offer banquet
halls. Space is offered by the organization which is for more than 200 customers so that target
can be given on the niche market and also it is essential for the customers who are operating the
conferences and also the events related to the flights.
Diversification
This should be considered by the company by offering all-inclusive packages for the travelers so
that customers can be satisfied with the entire services. Through this technique, it can be easy to
differentiate the services and helps to attain the large market share in the competitive
environment.
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Conclusion
By considering all the points discussed in the report it has been concluded that PESTLE analysis
which is discussed in the report helps in conducting the overall activities of the company in an
effective manner. By focusing on the PORTER FIVE FORCES MODEL it has been seen that
level of competition can be understood easily. The five factors also assist in analyzing the level
of competition present in the market. In the concluding part, the discussion is made of the recent
strategic recommendations by considering different strategies which help to analyze the overall
porter five forces and pestle analysis.
It is important for the company to focus on all the aspects discussed in the report as it can help to
manage the activities and also help to achieve a large market share in an effective manner. In this
report the focus is given on strength and weakness also by considering pestle and porter models.
Recommendations that are discussed in the report will help to achieve a large market share in an
effective manner and also by this the competition level can be reduced which is prevailing in the
market. So, it is important for the company to function properly so that goals and objectives can
be achieved.
References
Asif, M. (2015). A critical review of service excellence models: towards developing an
integrated framework. Quality & Quantity, 49(2), 763-783.
Bateson, J. E., Wirtz, J., Burke, E. F., & Vaughan, C. J. (2014). Sifting to efficiently select the
right service employees. Organizational Dynamics, 43(4), 312-320.
Bok, R. (2015). Airports on the move? The policy mobilities of Singapore Changi Airport at
home and abroad. Urban Studies, 52(14), 2724-2740.
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De Neufville, R. (2016). Airport systems planning and design. Air Transport Management: An
International Perspective, 61.
Heracleous, L., & Wirtz, J. (2014). Singapore Airlines: Achieving sustainable advantage through
mastering paradox. The Journal of Applied Behavioral Science, 50(2), 150-170.
Holloway, S. (2017). Airlines: Managing to make money. Routledge.
Jiang, H., Baxter, G. S., & Wild, G. (2017). A study of China’s major domestic airlines’ service
quality at Shanghai’s Hongqiao and Pudong International Airports. Aviation, 21(4), 143-
154.
Joo, S. J., & L. Fowler, K. (2014). Exploring comparative efficiency and determinants of
efficiency for major world airlines. Benchmarking: An International Journal, 21(4), 675-
687.
Kaufman, R. (2015). Why Your Customer Service Training Won't Lead to Happy Customers (or
Inspired Employees). The Journal for Quality and Participation, 37(4), 33.
Taneja, N. K. (2016). Adaptation Strategies by Airports. In Airline Industry (pp. 149-166).
Routledge.
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