Report on Strategic Management of Singapore Airlines

Added on - 21 Apr 2020

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Running head: STRATEGIC MANAGEMENT OF SINGAPORE AIRLINESStrategic Management of Singapore AirlinesName of the studentName of the UniversityAuthor note
1STRATEGIC MANAGEMENT OF SINGAPORE AIRLINES1.Executive SummaryThe purpose of this report is to elucidate on the strategic management of the SingaporeAirlines. It discusses about the financial situation of the company and the opportunities andthreats that Singapore Airlines has in the market. It further discusses in depth the capabilitiesof the company that create value and the objectives that must be set to solve the major issues.The Strategy Diamond model in relation to the Singapore Airlines has been discussed in thecourse of this report. It further describes how the corporate value of the Singapore Airlinesneeds to change and strategies that are sustainable to reduce the adverse impact on theenvironment.
2STRATEGIC MANAGEMENT OF SINGAPORE AIRLINESTable of Contents2.Introduction.........................................................................................................................43. Current Company Financial Situation....................................................................................4a. Past Performance Assessment............................................................................................4b. Financial Strength of the company and its scope...............................................................54. External Analysis...................................................................................................................5a. Trends, opportunities and threats.......................................................................................5b. Scope of Singapore Airlines...............................................................................................65. Internal analysis.....................................................................................................................7a. Capabilities behind the competencies that create value.....................................................7b. Scope of Singapore Airlines in the future..........................................................................86. Problem definition:.................................................................................................................8a. Issues facing Singapore Airlines........................................................................................8b. Objectives that should be set..............................................................................................87) Strategy Diamond of Singapore Airlines...............................................................................9a. i. Staging and pacing..........................................................................................................9ii. Arenas................................................................................................................................9iii. Vehicles..........................................................................................................................10iv. Economic Logic..............................................................................................................10v. Differentiators..................................................................................................................108. Selection of Chosen alternative............................................................................................11a. Superiority of chosen option............................................................................................119.Implementation.....................................................................................................................12a. Changes in corporate value chain.....................................................................................12b. Measures that will help in determining if strategy implementation is on track...............12c. Environmental and social impact of strategic recommendations and mitigation strategies.13
3STRATEGIC MANAGEMENT OF SINGAPORE AIRLINESi. Carbon footprint along the entire value chain and mitigation strategies..........................13ii. Environmental degradation and habitat destruction........................................................14iii. Cradle to grave recycling................................................................................................14iv.Labour Conditions and supplier relationships.................................................................14References:...............................................................................................................................16Appendices:..............................................................................................................................18Appendix A:.........................................................................................................................18Appendix B:.........................................................................................................................19Appendix C:.........................................................................................................................20Appendix D:.........................................................................................................................21
4STRATEGIC MANAGEMENT OF SINGAPORE AIRLINES2.IntroductionThe Singapore Airlines acts as the flag carrier of Singapore and its hub is located atSingapore Changi Airport. They make use of the Singapore Girl as the central figure inrelation to corporate branding. They pioneered the launching of the Airbus A380 that is thelargest passenger aircraft in the world. It is positioned among the top 15 carrier on worldwidebasis and it has been ranked in the top position in the world in relation to internationalpassengers (Singaporeair.com, 2017). Singapore Airlines on the 15th of December, 2010 wasnamed as second-largest airline within the world by that of the International Air TransportAssociation.A majority part of the Singapore Airlines is owned by the Singapore government. Thelogo of the Singapore Airlines is a bird that is inspired by the silver kris. The keris is key tothe branding of Singapore Airlines. The logo features on the tailfin along with that of thecollaterals of the airlines. It continues to remain the same after the split of Malaysia-Singapore Airlines. Singapore Airlines has flights to different 62 destinations within 32countries (Singaporeair.com, 2017). Its presence is more strongly felt within the SoutheastAsian region and along with subsidiary Silk Air helps in connecting Singapore with that ofother international destinations. The Singapore airlines plays an important role on KangarooRoute. It flies around 11.0% among all international traffic in and out of Australia.3. Current Company Financial Situationa. Past Performance AssessmentSingapore Airlines has organized the human resources in such a manner in order toachieve competitive advantage and outperform the different airlines within its peer group. Inthe last four decades, it has managed to earn a great reputation in the business of commercialaviation that is hugely competitive (Kleymann, Birgit, and Hannu Seristö 2017).It hasmanaged to provide the customers with service that is of high quality and has managed todominate the business-travel segment. It has won laurels for being the Best Airline in theworld from that of the Conde Nast Traveler 21 times. It has also been awarded with theSkytrax’s Airline of Year Award thrice within the last decade.It is famous as a cost-effective operator. . It was found that cost per available seatkilometer was only 4.58 cents. On the basis of International Air Transport association study
5STRATEGIC MANAGEMENT OF SINGAPORE AIRLINESthe cost in relation to full-service European airlies was around 8 to 16 cents. For the U.S.Airlines it was around 7 to 8 cents and for the Asian airlines it amounted to 5 to 7 cents.It combines incompatible strategy in relation to differentiation and it pursues this with thehelp of high quality service and that of continuous innovation. It has proved itself to beformidable in the arena of cost leadership. There are very few enterprises that has managed toexecute the dual strategy in a profitable manner. Management expert like that of MichaelPorter has opined that dual strategies involve contradictory organizational process.b. Financial Strength of the company and its scopeThe SIA group has reported that operating profit of around $623 million in thefinancial year of 2016-17 that was 8.5 % lower when compared to that of the same period inthe last year. Net profit came down by around 55.2 % that was on account of the net lossincurred during the fourth quarter. The Group Revenue fell around $ 370 million on the year-to –year basis to become $14,869 million. The revenue that is gathered from flown revenuecame down by around $ 382 million inspite of having traffic growth. The cargo revenue alsocame down by $87 million on account of the cargo yield erosion. Other revenue was alsolower on account of the absence of income that was earned due to the release of sevendelivery slot that was recorded in last financial year (see Appendix A).Companies can increase the market share with the help of innovation and by strengtheningthe customer relationships. Acquiring competitors can also help to strengthen the financialcondition of the company. Higher share in the market helps to put the companies at a greatcompetitive advantage. Companies that have a high market share can receive better pricesfrom that of the competitors (Peppard, Joe, and Ward 2016).With the increase in market sharethe productivity will also increase. Innovation is a method that the company can make use ofin order to increase the market share.4. External Analysisa. Trends, opportunities and threatsStrengthWeaknessIt has strong backing from that of theSingapore GovernmentIt boasts of satisfied customer baseTop airline brand in relation to marketcapitalisationIt costs a great deal to travel in SingaporeAirlinesIt relies heavily on international trafficMarket share is less on account of increasingcompetition
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