Porter's Five Forces for Singapore Airlines

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SINGAPORE AIRLINES
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Table of Contents
Introduction.................................................................................................................... 3
External Analysis............................................................................................................. 3
PESTLE Analysis......................................................................................................... 3
Political.................................................................................................................. 4
Economic................................................................................................................ 4
Social..................................................................................................................... 4
Technological........................................................................................................... 5
Legal...................................................................................................................... 5
Environmental.......................................................................................................... 5
Porter’s Five Forces for Singapore Airlines..........................................................................5
The Threat of New Entrants.......................................................................................... 5
Intensity of Rivalry.................................................................................................... 6
The Threat of Substitute Services...................................................................................6
The Bargaining Power of Customers...............................................................................6
The Bargaining Power of Suppliers................................................................................6
Internal Analysis.............................................................................................................. 7
Tangible and intangible Resources.................................................................................... 7
SWOT Analysis Table...................................................................................................... 8
Possible Strategic Options.................................................................................................. 8
Option 1: Adoption of Dual Strategy on Global Market...........................................................8
Option 2: Lowering Risks and Managing the Uncontrollable....................................................9
Recommendation Strategy................................................................................................ 10
Overall Conclusion......................................................................................................... 11
References................................................................................................................... 12

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Introduction
The Singapore Airlines is one of the highly regarded airlines by most travellers and
competitors in the global airlines industry as the best airlines to use when travelling due to its
best services and customer relations. The airlines started operating in the year 1972 after the
Malaysia-Singapore Airline (MSA) split into Malaysian Airline System (MAS) and Singapore
Airlines (SIA) (Air Transport World 2014). The company is well known for its excellent
customer service, commitment to the maximization of shareholders’ returns, uncompromising
adherence to safety and security and young fleet that have given it competitive advantage in the
industry offering three classes of travel; Economy, First and Business classes. While onboard
they provide services such as relishing meals, entertainment on Kris World and it also provides
online booking. The company has recorded a consistent rise in its performance indicated by its
increasing market share and returns making it to win numerous accolades for its outstanding
services (Heracleous and Wirtz 2012).
External Analysis
This is a form of analysis which focuses on a company’s environment analyzing how the
environment influences the operation of the business. The analysis helps in depicting both the
opportunities and risks that a company is exposed.
PESTLE Analysis
PESTEL abbreviates the Political, Economic, Social, Technological, Legal and
Environmental aspects of a business organization. The following PESTEL framework therefore
illustrates the forces that affect Singapore Airlines.

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Political
The political temperatures in a nation often have significant impacts on the operations of
the airline industry owing to the fact that nearly all nations have a national carrier. Since the
national carrier symbolizes the country, the airline receives significant support from the
government which enables to smoothly carryout its operations even amidst challenges (Wirtz et
al. 2008).
Economic
The airline industry operates across different national economic boundaries and due to
their high level of resource intensity; they are prone to the prevailing vagaries of both national
and international economy. Singapore Airlines is faced with the threat of the rising fuel costs
resulting from the continuous political unrest in the Middle East which have made the fuel prices
to rise to unprecedented levels (Chan 2000).
Social
For a long time, long distance travelling has been the preserve of the wealthy in society
but with the recent increase in disposable income among most individuals, such faraway
destinations travels have become affordable. Additionally, consumer preferences has been
shifting from the original premium travels to the current low cost travel styles as noted by the
increase in the number of low cost carriers (The Times of India 2014). Based on the changing
market trends, Singapore Airlines which has been a premium carrier have started offering lows
cost travels to attract the new market. This is evidenced by their decision to expand their shares
holdings of Tigerair which is a Southeast Asian low cost carrier despite the absence of
profitability (Chan 2000).