Strategic Change in Singapore Airlines

This document discusses the strategic change in Singapore Airlines, focusing on the adoption of various models to facilitate change in the organization. It covers the analysis of the macro environment, including PESTLE analysis and Porter's five force model. The document also explores the strategic objectives of the company, SWOT analysis, and the value creation model.

Strategic change 0
[Type the company name]
Strategic Change In Singapore Airlines
Change management in the organization
Student’s Name
12/22/2018

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Executive Summary
Singapore Airlines was developed in the year 1972 with very limited resource and no
domestic market. Over the years, the company has grown immensely and has become the
most renowned airline. The company aims to deliver valuable services to its customers and
realign its strategy to overcome the barriers in an effective manner. The report covers the
adoption of various models to facilitate change in the organization.

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Contents
Introduction................................................................................................................................3
Analysis of macro environment.................................................................................................4
PESTLE Analysis...................................................................................................................4
Porter’s five force model............................................................................................................6
Resource Based View................................................................................................................7
Emerging trends and implications..............................................................................................8
Strategic Objectives...................................................................................................................9
SWOT ANALSIS (Refer to table 2 in appendices)...................................................................9
Value creation Model.................................................................................................................9
Elements in Porter's value chain..........................................................................................10
The process of Strategic Change..............................................................................................13
Blockages of the change.......................................................................................................16
Facilitator of the change.......................................................................................................17
Analysis of Product lifecycle stage..........................................................................................17
Conclusion................................................................................................................................18
Appendices...............................................................................................................................20

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Introduction
Singapore Airlines Limited is the national airlines of the city-state of Singapore with
Temasek holdings. It was founded in the year 1972 with limited number of resources and has
no domestic market. Singapore airlines limited has grown immensely by applying a
disciplined approach and unremitting efforts, which leads to becoming an internationally
respected airline. Today SIA has a robust market presence in the Southeast Asian region and
are constantly intensifying its global footprint by exploiting the liberal mutual aviation
agreements and codeshare arrangements with the other main world airlines. The vision of the
company is to be an outstanding company and to be responsible citizen of the world. It
focuses on delivering high-quality services to its customers and maximizing the benefit for
the shareholders and the employees of the organization (Singapore Airlines, 2018).
The company operates in a competitive environment where all the market forces
attract and regulates new policies in which the company operates. To identify the
opportunities for growth and threats for the company it conducts the environment analysis by
using different models (Singapore Airlines, 2018).
Singapore Airline fosters on realigning the strategy by adopting the launch of the
premium economy in the year 2016 to provide a high-class experience to its customers. It
launches a 2-4-2 cabin with the increase in the width of the seats and creates a room to stretch
and provides the larger storage space for its premium customers. The company adopts this
strategy to increase its market share and deliver greater experience within the flight
(Singapore Airlines, 2018).

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Analysis of macro environment
PESTLE Analysis
(Source: Market research reports.com, 2018)
Political and legal factors
The political factors majorly influence the competitiveness of the company. It
describes the rules and the regulations laid by the government to control the airline industry.
Such policies affect the functioning of the company. For example, due to the decrease in oil
prices from the past two years, the government puts the mounting pressure to unwind the fuel
surcharges. The government allowed ASEAN Company to fly in this region such policies
increases the competition and demands for continuous innovation. The legal factors also
influence the operations of the company as the government regulates certain policies that
restrict the company to operate in other countries (Belobaba, Odoni, & Barnhart, 2016).
Economic Environment:

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Economic environment directly affects the demand of the airline industry. The
increase in the crude oil prices, the growth of GDP of the country, business cycle majorly
influences the demand of the company. The income of the customers, which closely link to
GDP of the country, affects the demand of the company (Taneja, 2017).
Social Environment
The changing trends in customer behavior influence the operations of the company.
The changing demographic patterns affect the demand of the company. The customers expect
continuous improvement in the services and changing preferences affect the company
(PESTLE Analysis, 2018).
Technological Environment
The changes in the technological environment help in improvising the services of the
company but also act as a threat to the company. Due to improvisation in the technology, the
demand for Skype web meeting has increase, which leads to a decrease in face-to-face
meetings and however affects the demand of the business (Magretta, 2012).
Environmental Factors
The environmental factors influence the demand of the aviation industry. The
company is pressurizing to save the environment by reducing air pollution, noise pollution
and reducing the influence to global warming. The Singapore airlines are able to compete to
such pressures by effectively contributing towards the economy and being the responsible
citizen in the world (Taneja, 2017).
The company also uses Porter's five-force model to determine the factors that
influence the ability of the firm to serve the customers and achieve profit.

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Porter’s five force model
Industry Rivalry
It is analyzed that the company faces strong competition with the firms who offer the
same price as Singapore airlines and the customers quickly switches to the other companies.
Such factors create an expense for the company as the seats remain unoccupied and the
storage cost increases. Many rivalry companies collaborate with American and European
countries and offer a low price to the customers however leads to a decrease in demand for
Singapore Airlines (Wiki Health, 2017).
Potential of new entrants
The potential entrance of new companies is low because of the instant heavy
expenditure and the political factors threat the entry of new entrants. It requires high
investment and storage cost which decreases the entry of new entrants (Wiki Health, 2017).
Potential of substitutes
The potential of substitutes for Singapore airlines in moderate because apart from the
benefits provided by airlines. The customers also use buses, trains to travel to the close cities
and however affects the demand of the company. Singapore has no chances to compete with
mass rapid transit or buses in the country (Wiki Health, 2017).
Bargaining power of the buyers
Although there are high price sensitivity and high industry, the rivalry the company
provides the loyalty services to its customers and applies strategies to attract more customers.
The company applies the strategy to provide premium economy service to attract more
customers. However, the power of buyers is moderate (SCRIBD, 2018).

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Bargaining power of the suppliers
Bargaining control of the suppliers is high because to ensure the safety and improve
services of aircrafts the company depends upon aircraft suppliers and for fuel, the company
depends on the supplier. However, the actions of supplier majorly influence the demand of
the company (SCRIBD, 2018).
It is believed that the organization’s internal capacities also help in maintaining a
competitive advantage. The company analyses the internal market forces to analyze the
opportunities for growth and threat using a resource-based view model. The internal
resources of the company will help in analyzing the external opportunities of the company.
The company adopts the VRIO framework to analyze the competencies of the company. The
company has the tangible and the intangible resources to maintain its competitive advantage
in the industry (Roy, 2015).
Resource Based View
Value
Singapore Airlines provides the premium economic cabin to its customers and
contributes as a responsible citizen of the country. It has the well-designed cabins with
continuous innovation in the ways of providing services (Wiki Health, 2017).
Rarity
Singapore Airlines have the large market share and a strong brand name because it
adopts the dual strategy of providing lower price tickets with creating differentiation in
services provided (Wiki Health, 2017).
Imitability

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Due to high industry rivalry, the chances of imitability of the strategies of the
company are more. The close competitors also imitate the strategies of the company, which
creates the demand for regular restructuring of the strategies (Wiki Health, 2017).
Organization
Singapore Airlines has grown immensely and has created a large market share. The
company is able to maintain its brand name and increases efficiency in its operation (Wiki
Health, 2017).
Refer to table 1 in appendices
Emerging trends and implications
The main drivers for developing changes are the expectations of the customers of high-
quality services and involvement of higher level of technology that affects the demand of the
industry.
 Development of oversized aircraft leads to a reduction in the prices of tickets to fill
the seats of oversized aircraft. Excessive lower prices create a negative impact on the
revenue of the company and reduce the income of the economy (Heracleous & Wirtz,
2012).
 Development of premier economy services involves delivering of high-value services
and creating more customers. Such emerging trend will help the company to increase
the revenue and contribute to increasing revenue of the country (Heracleous & Wirtz,
2012).

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Strategic Objectives
The strategic objectives of the company include delivery of higher customer services
through the strategic realignment of the premium economy services. It focuses on the
development of the premium services for the long haul flights and must ensure that the
company provides the premium services at the affordable prices so that the consumers are not
becoming reluctant to pay for such services. It must install the services to enhance the
experience of the customers (Taneja, 2016).
SWOT ANALYSIS (Refer to table 2 in appendices)
Value creation Model
To achieve its strategic objective the company uses the value chain model that helps
in analyzing the value created for the customers and depicts the ability of the company to
maintain its competitive advantage (Wensveen, 2018).
The company uses the porter’s value creation model to create and analyze the value of
the organization to the customers. In this framework, value chain refers to a series of events
that are undertaken by the company to generate value for its customers. It consists of certain
elements, which depicts the organization performance. It depicts how the organization inputs
are converted into outputs that are purchased by the company (Professional Academy, 2018).

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(Source: saylordotorg.github, 2018)
Elements in Porter's value chain
Primary Activities
Human resource management
Singapore airlines develop value to the customer by establishing training programs for
its employees that are highly influenced by the culture of the organization and develop the
training programs, which are valuable, rare and not imitable. The company focuses on
developing employees by applying on- the- job training methods and collaborating with the
workforce development agency of Singapore. They consider their employees as their
competitive advantage and efficiently train them (Professional Academy, 2018).
Operations
Singapore airlines are well known for its in-flight service delivery and have been
developed a well-known brand for delivering excellence services. Its operation includes
check-in counters, baggage handling, and in-flight services, which differentiate its product
from the other airline industries. The company receives numerous awards for its excellence in

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In-flight services and provides an advantage in comparison to its rivalry firms (Professional
Academy, 2018).
Marketing and sales
The company effectively manages its marketing and sales activities by collaborating
with global renowned advertising agencies and becoming the most recognizable strong brand
in the airline industry (Taneja, 2016).
After sale services
The company shows the loyalty in delivering after sale services to its customer by
effectively handling the customer complaints, lost baggage problems and ensuring the
efficient delivery of after sale services (Wensveen, 2018).
Secondary activities
Inbound logistics
SIA’s inbound logistics includes Aircraft and fuel purchase, route scheduling, flight
schedule. These actions are considered important because they provide the platform to start
the operations and leave a major impact on SIA’s operations (Wensveen, 2018).
Outbound Logistics
The activities in outbound logistics include flight connection, rental car, hotel
booking, and baggage handling. The activities are primarily served to the customers to
deliver higher customer experience and develop its value to the customers (CAPA, 2015).
Infrastructure

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SIA’s infrastructure includes the hardware and the software. The catering center,
maintenance center, and freight terminal are highly developed and in software activities the
company ensures that there is appropriate planning, controlling and financial system (CAPA,
2015).
Technology
The adoption of innovative technology helps in developing value to the customers.
Singapore Airlines were the first who introduced Airbus 380 and provides the in-flight
entertainment to deliver a memorable experience to its customers. The company was the first
to provide global satellite operation to provide telephonic service in flights and develops the
competitive advantage within its customers (CAPA, 2015).
The company develops its positive image by delivering value to the customers. It
focuses on enhancing the customer experience through augmentation in the delivery of
services to the customer. The company provides extensive training to the employees so that
they are able to handle the customer’s expectations and maintain its competitive advantage.
The company adopts innovative technology and develop new ways to entertain the customers
in the flight. Singapore Airlines was the first to offer in-flight entertainment for the
customers. The company uses innovative ways that help to boost the brand image and
however, leads to a reduction in the operation cost which overall improves the efficiency of
the company (CAPA, 2015).
The company sustains its positive image by strengthening its customer services,
human resource and collaborating with the other renowned airline industry to reach globally.
The company ensures that the customer receives satisfaction by delivering after sale services
and handling the customer queries (Heracleous & Wirtz, 2012).

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They deliver the quality, reliable service across the globe and provide a personalized
experience to its customers. Its strong brand image helps to gain a competitive advantage
over the rivalry firms and expand its market share. The company provides maximum value to
its shareholders and involve continuous innovations to improvise its services and deliver a
high-value experience to its customers. The company is able to maintain its image by
providing quality service at affordable prices and ensures that the crew cabin is fully efficient
in delivering services to the customers (Wensveen, 2018).
Strategic Change in Singapore Airlines
Strategic change management refers to the structure of managing change in the
organization in a thoughtful manner to compete in the changing environment and helps in
maintaining the competitive advantage of the organization. The need for strategic change in
the Singapore airlines is to meet the changing requirements of the customer and focus on
delivering the higher experience. The company aims to realign its premium economy strategy
in 2016 because the company was not able to earn a premium for providing higher value
services and the major drawback that the company faces in the launch of premium economy
is the consumers do not prefer to pay a premium for short haul flights. To realign the strategy
the company undertakes various steps which help in enhancing services (Reuters, 2018).
Environment Scanning
The first the step the company must undertake is to scrutinize the external
environment and analyze the opportunities and threats to the business. Scanning of
the environment helps the company to analyze the changing market trends that can
act as a threat to the company. Due to constantly changing environment it builds,
the needs to realign the existing strategy and improvise the services. It will help

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the company to implement better strategies that will turn the realign strategy into a
favorable one (Lawton, 2017).
I. Strategy formulation
After scanning the environment Singapore airlines forms the strategy to meet
the changing expectations of the customer and to deliver a higher quality
experience. It formulates the strategy to provide premium economy services to its
customers and enhance the customer experience by developing a companion app
to allow the control of the customers on their in-flight experience. The company
must develop the strategy that will provide the premium services on the affordable
cost and will help in maximizing the profit (Albers, Baum, Auerbach &
Delfmann, 2017).
II. Strategy Implementation
The third step in the process is to implement the actions that will bring change
to the organization. To implement the change the company provides the training
to the employees and guide their actions towards implementing change in the
organization. The company adopted the dual strategy of providing premium
services and low fare tickets to the customers. It enhances the performance of the
front line employees and ensures that the customers receive appropriate in-flight
services (Lawton, 2017).
III. Strategy Evaluation
This is the last step in the process of implementation of strategic change. The
company evaluates that the actions of the employees are in accordance with the
new changes formed by the organization. It ensures that there is proper control of
the activities and the uncertainty is reduced (Baxter & Srisaeng, 2018).

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The organization culture majorly influences the implementation of change in
the organization. The culture depicts the behavior and attitude of the employees
towards the new change. It describes whether the employees are flexible enough
too corporate towards the change in the organization (Low & Lee, 2014).
The business operates in the environment, which requires a continuous change
to encounter the changing expectations of the clients and to overcome the challenges
of the market trends. Changes in the expectations and demands of the customers build
the need to re-align the strategies and maintain its competitive advantage from the
close rivalry of the industry. The company adopts the Lewin’s change management
model to inculcate the change in the organization process and ensure overall
efficiency in the operations of the company (Grant & Jordan, 2015).
(Source: Chegg study.com, 2018)
Unfreeze
This is the first stage of the model, which describes the changes the company tries to
bring in the organization. In this stage, the company specifies the reason for evolving change
to know the reaction of the employees towards the change in the organization structure. This

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stage is the most crucial because it depends upon the organizational culture and the way the
employees react towards the changes in the policy. At this stage, the company will formulate
new policies that will help in overcoming the barriers faced by the company. It leads to a lot
of uncertainty due to the actions of the employees (Belton, 2017).
Change
At this stage, the uncertainty is resolved because the company finds the new
ways to accept the change and directs the actions of the employees towards adopting
the new changes and improves the organizational efficiency. The company trains the
employees to further enhance their performance and provides excellence in the
rendering of services. The company aims to divert the actions of the employees
towards the achievement of re-alignment of the strategy formed. The company aims
to provide premium economy service to its customers by making more investments
into the latest technological innovations and improvising in-flight experience. The
transfer from the unfreezing stage to change stage takes time because of the difference
in the reactions of employees (Roy, 2015).
Refreeze
This stage of the model embraces that the human resource of the organization is getting
comfortable to the change and start implementing and understanding the changes. The
company puts the continuous efforts to make the people accept the change and improve the
overall efficiency of the organization. The company refreeze the new changes and start
implementing new ways to handle the diverse situations of the competitive environment
(Roy, 2015).

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Blockages of the change
The organization culture acts as the major blockage of the change because of change
in the perceptions of the people. Not all the employees perceive that change will
provide benefit to the company. The changing attitude, the behavior of the employees
also acts as a blockage in implementing change in the organization. The difference in
perceptions can majorly affect the working environment of the organizations as it can
create dissatisfaction among the employees of the organization (Halpern, 2018).
The blockage faced by Singapore Airlines was the less awareness of the premium
economy services delivered by the company (Halpern, 2018).
The main blockage of change for implementing realigning of the strategy is the high-
cost flights for the short haul flights (Wittmer, Bieger & Muller, 2011).
The blockage in implementing the change in the operation of the company requires
huge investment and availability of the resources, which in turn increases the cost and
the risk associated with it (Wittmer, Bieger & Muller, 2011).
Facilitator of the change
Development of adequate training programs acts as a facilitator of change because it
equips the employees with the required skills and leads to operational efficiency in the
organization. The positive behavior and values of the employees facilitate change in
the organization. They understand the need for change and deliver a positive reaction
towards the change (Shaw, 2016).
The development of premium services, installment of the various inbuilt
entertainment facilities in the flights acts as the facilitators of the change (Shaw,
2016).

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The company provides the more baggage facilities and expands the storage facility for
its customers. It focuses on delivering higher services by expanding the width of the
seats and acts as the facilitator of change (Shaw, 2016).
It is analyzed that the goals of the organization are achievable and realistic
because the company has implemented the change in the organization by developing
the companion app that delivers higher in-flight entertainment services to the
customers and fosters the appropriate training to its employees to increase the
operational efficiency and delivering a higher level of services. The company has
expanded its storage capacity and developed the attractive offers for the customers. It
has employed a renowned chef to deliver quality food to its customers. The company
is able to attract customers by delivering affordable price tickets and ensuring
premium services for its customers (Belton, 2017).
Strategic Realignment Recommendations
The company can realign its strategy of the premium economy by delivering
the premium services for the long haul flights so that the customers are ready to pay
the premium prices. The company must provide the premium services at affordable
prices so the cost of the company in developing such services can be recovered in the
form of revenue generated.
Analysis of Product lifecycle stage
Singapore airlines have shifted from the introduction stage to the growth stage of the
product life cycle because the company applies continuous efforts to add additional features

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to its services and focus on delivering higher customer satisfaction. The company promotes
its brand through renowned celebrities and expand the market share by becoming a global
brand. The company expands its distribution channel as the customers are getting attracted
towards the services and the demand for the services is increasing. It is observed that the
profit margins of the company are increasing in folds and the company further makes huge
investments in realigning its strategies to gain more loyal customers for its brand (CAPA,
2015).
(Source: smartsheet.com, 2018)
The company aims to sustain its competitive advantage in the competitive business
environment and makes huge investments in the adoption of innovative methods to attract
customers (CAPA, 2015).

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Conclusion
From the above discussion, it is concluded that Singapore airlines has grown
immensely and has become a renowned global enterprise. The company adopts the
continuous innovative techniques to meet the changing needs of the customers and enhance
their experience. Due to the strong competition among the rivalry firms, the company aims to
maintain its competitive advantage by realigning the strategy and adopting the different
theoretical model to facilitate change in the organization. It analyses the macro and the
microenvironment by application of the appropriate model to analyze the threats and the
opportunities, which exist in the competitive business environment and aims to achieve
operational efficiency in the organization. The company realigns the strategy and
implemented premium economic services for its customers.

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References
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aviation industry. London: Routledge
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Aircraft in a Full-Service Network Carrier Route Network: The Case of Singapore
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Kingdom: Wiley
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evolves-with-scoot-tigerair-interlines--loyalty-tie-ups-250235
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management. United Kingdom: Routledge
Grant, R. M., & Jordan, J. J. (2015). Foundations of strategy. United Kingdom: John Wiley
& Sons.
Halpern, N. (2018). Airport business strategy. The Routledge Companion to Air Transport
Management, 154

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Heracleous, L., & Wirtz, J. (2012). Strategy and organization at Singapore Airlines:
achieving a sustainable advantage through dual strategy. In Energy, Transport, & the
Environment, 479-493
Lawton, T. C. (2017). Strategic management in aviation: critical essays. London: Routledge
Low, J. M., & Lee, B. K. (2014). Effects of internal resources on airline
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strategy. United States of America: Harvard Business Review Press
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premium-economy-a-tougher-sell-on-new-non-stop-u-s-flights-idINKCN1NJ0UH
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https://www.scribd.com/doc/58246013/Bargaining-Power-of-Suppliers-and-Airline-Industry
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Singapore Airlines. (2018). Annual report. Retrieved from:
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integrated aviation value chain. Berlin: Springe

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Appendices
Table I
Resources Value Rarity Imitability Organization
Premium
economy
cabin
Yes Yes No Yes
Low Fares Yes Yes Yes Yes
Brand name Yes Yes Yes Yes
Table II
Strengths
 The company has a strong brand
name and achieves maximum
satisfaction of the customers.
 The company offers premium
economic services.
 Continuous innovations in the
delivery of services
Weakness
 The services delivered by the
company are easily imitable.
 Development of oversize aircraft
increases storage cost.
 Involve a large amount of
expenditure.
Threats
 Development of high-level
technology creates a decrease in
demand.

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 High industry rivalry.
 Dependence on the aircraft supplier
is large.
Opportunities
 Development of high technology
products.
 The increasing demand of
customers.
 Higher networking and expansion
opportunity.