Expansion of Tiger Scoot in London: Value Chain Analysis and Competencies Evaluation

This report evaluates the external environment of London as well as its competencies for grabbing the opportunities in this market. It also analyses the value chain of Scoot as well as the competencies that its competitors have.

Business Management
and
Strategic Management

1
Contents
INTRODUCTION.................................................................................................................................2
Value chain of Scoot.............................................................................................................................2
Competencies of Scoot..........................................................................................................................4
Macro environment analysis of London................................................................................................6
Strengths of top three budget airlines in UK..........................................................................................7
Mode of Entry.......................................................................................................................................9
CONCLUSION...................................................................................................................................10
REFERENCES....................................................................................................................................10

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INTRODUCTION
All across the globe, there are many multinational firms that are expanding their business in
various parts of the world. There are many factors that need to be considered by the company
in the process of change. In aviation industry there are many companies expanding their
business into new routes. These expansions have greater impact on the business operations
and functions. Finding new routes that could be valuable for the company needs to be found
out by evaluating various operational factors (Lawton, 2017). The expansion should only be
made after analysing the environment as well as the competencies it has. Tiger scoot is one
such company that is expanding its business in European region. It is a low budget Airlines.
London is the city having large numbers of people from Asia and other parts of the world.
Scoot is going to expand in London market by starting a direct flight services from Singapore
to London. This plane will fly from Singapore to Gatwick airport in London. They might also
select the alternative route that is elaborated in the later part of the report. This provides an
excellent opportunity for Tiger Scoot to expand its business in London.
This report evaluates the external environment of London as well as its competencies for
grabbing the opportunities in this market. It also analyse the value chain of Scoot as well as
the competencies that its competitors have. The competencies that will be required by Scoot
to tackle the competencies of their competitors as well as that of new incumbents have also
been showcased. Report also analyses the impact of Scoot’s expansion on its parent company
Singapore Airlines. At last the recommendation for the entry strategy has been provided.
Value chain of Scoot
Value chain analysis is an effective model for understanding the impact of the company’s
operations. This model provides details about internal activities and processes of an
organisation (Holloway, 2017). The value chain analysis of scoot is as follows:
Primary
activities
Analysis Strength/Weakness
Inbound
logistics
The inbound logistics operations are complex that
also includes timely delivery of fleets. This
company is known for its fast passenger services.
Strength
Outbound
logistics
Outbound logistics of the company is also complex
but the company derives its value in the primary
Strength

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operations through effective handling of the
customer’s luggage, facilities planning, passenger
service system, flight scheduling, yield
management system etc.
Operations The scope of operation can be vast as company
currently operates in 18 destinations. Its
competitive advantage in operations is by providing
enhanced security for customers, fast ticket booking
system, online booking as well as other services.
Strength
Services Scoot provides its customers with loyalty cards that
add values to their services. This helps in attracting
new customers and at the same time retains the old
consumers. There provide services for particular
class in the society hence may lag to attract the
larger part in the market. Their service quality is
also relatively poor than its rivals.
Weakness
Marketing and
sales
Scoot takes use of various types of marketing
communication mediums so as to have direct
interaction with their customers. They utilises
marketing mix like TV advertisements, Social
media, public relations, events and experiences,
direct marketing as well as sales promotions.
Strength
Support
activities
Analysis Strength/Weakness
Procurement The whole procurement process of scoot is
followed with strict compliances of rules and
regulations. Most of them are automated. These
standards have ensured that they keep themselves
apart from various fraudulent activities that might
keep them away from any kinds of uncertainties
that might have negative effect on the Scoot.
Strength
Technology
management
In-flight systems, baggage tracking system,
computer reservation system, yield management
system, flight scheduling system etc. are used
Strength

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within the organisation (Ramón-Rodríguez,
Moreno-Izquierdo and Perles-Ribes, 2011).
Human resource
management
They have provided best of trainings for all their
crew members. Special trainings regarding safety
have been given. But on the other hand they give
comparatively lower salaries to their employees as
compared to their rivals.
Weakness
Infrastructure There is still a huge need to invest in the
infrastructure of the company. This is because the
new markets like London are having the services
providers with excellent infrastructure. They need
to follow regulations that are made by government
of UK so as to avoid any compliance.
Weakness
Competencies of Scoot
Scoot is one of the biggest low fare airlines company in Singapore. In spite of having so
many rivals in the industry, this company has done well in the market (Kleymann and Seristö,
2017). Scoot has huge amount of quality resources which makes them capable of grabbing
opportunities in different parts of the world. Some of the competencies of Scoot are as
follows:
 Operations: While performing their operations, they utilises best of resources. They
capitalises on their strengths for performing various types of operations. The use of
advanced technologies along with best practices makes them different from their
competitors. They have worked hard for improving the security of their passengers
(Pearson and Merkert, 2014). Their online ticket booking system is highly advanced
which makes the ticketing process easier and faster.
 Technology management: They are using the best and most advanced technologies for
their different processes. They have different kinds of technology systems for
different processes. For example Yield management system, In-flight systems,
computer reservation system, baggage tracking system, flight scheduling system
(DaSilva and Trkman, 2014). These customised systems streamline the operations as
well as increases the effectiveness of the activities. The changes of failures get

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reduced by the use of such technology. They also take feedbacks from their customers
with the help of technological tools such as Apps, websites and social media.
 Procurement: Their procurement activities add value to their services. Their
procurement process is strictly guided by strict rules and regulations. This ensures that
lesser numbers of mistakes arise in the business process. At the same time it enables
company to prohibit any kinds of frauds in the business operations (Li, Granados and
Netessine, 2014). They put their efforts to enhance their service quality so as to give
their clients with best of experience.
 Low fare services: They provide their services at lowest of cost in the Singapore
market. This helps them in attracting large number of potential customers towards
their services. Since the destinations to which this company flies has large number of
people in the middle class. This gives them with an advantage over their rivals as
most of the companies in the industry provide luxury services.
This company utilises their competencies in a strategic form so as to gain competitive
advantages over their rivals. The first and the most basic thing that it utilises is its resources
especially the ones that are related with technology (Evans, Stonehouse and Campbell, 2012).
The use of technology in the process not only brings effectiveness in their process but at the
same time it reduces the overall cost of operations. They provide rigorous trainings to their
employees for improving their skill set. These skills are utilised by the company for
improving the quality of services they are delivering to their customers. Their standardisation
of the operational procedures have helped them in maintaining quality which gives them edge
over most of their rivals. Their management system along with the technology has fastened
the process and hence clients can easily get what they want. Such speed in services helps
them in managing their resources according to the demands. This also empowers effective
utilisation of resources which is highly essential in the need for sustainability in the modern
day firm. This gives them advantage in the longer time frame. Effective utilisation of
resources helps in cost saving which plays an essential role in giving them competitive
advantage over their rivals. Singapore market is technologically advanced and most of people
in the country are connected to mobile technology (David Mc, 2013). In such an environment
companies facilities like online booking and online query resolving mechanism helps them in
reaching to larger number of customers. This also improves their marketing campaign which
gives them competitive advantage over most of their rivals.

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Macro environment analysis of London
For any expansion process, the first and the most basic requirements of the companies are to
understand the environment that is present in front of them. It is essential that company
understands the external environment they are facing (Francis, Humphreys and Aicken,
2017). There are many factors that influence the external environment of London. Some of
them are as follows:
 Political: UK government has taken many steps so as to improve the airlines
infrastructure in the country. This will benefit Scoot in managing their operations in
the city. Decisions such as Brexit will have impact on the routes of the flights as well
as on the taxes (Wen and Yeh, 2017). There is an increase in the political ties between
the Asian countries and England. This has increased the number of travellers among
the cities. Apart from this there is strong commitment between the British government
and Government of Singapore for promoting cultural exchange (Wensveen, 2018).
Along with this UK is attracting huge number of students from Asia as they have big
Universities. This makes the political environment suitable for Scoot to go for new
destination London.
 Economic: UK is a strong economy and hence can support the business of airlines
firms having different nature. London has people from different income group. This
provides them with huge opportunities to increase their global customer base. In the
last few years the economy of UK has also seen a downfall especially after recession
of 2009. There is also an increase in the inflation hence generating estimated profits
could be a challenge for the company (Dobruszkes, 2013). The performance of the
companies in the industry suggests that the market is much more stable than many
other countries.
 Society: Society of London comprises of people from different age group. Tiger scoot
needs to segment their customers based on various variables. This will play an
essential role in the defining their different processes. With the increase in the tourism
activities, the number of traveller both into London and from London has increased.
The higher per-capita income will help the company as they prefer to travel by air
transports. In London there are many students studying from different parts of the
world. These students prefer to travel from the low cost airlines. London being the
capital of England attracts higher number of customers from Asian region
(Sedláčková and Lokaj, 2017). People come here to live the experience of the historic

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and colonial culture. Apart from this the labour force of UK is highly skilled which
provides company with an opportunity to increase their human resource capital.
 Technological: London is a technologically advanced market and the mobile
technology has reached to remote areas in UK. This is an excellent opportunity to the
low cost airlines firms as technology helps the in reducing the cost of operations.
With the advancements in the technology like IoT, Scoot also needs to apply them in
their business process. This will help the firm in connecting to the larger numbers of
people in the industry (Albers, et. al. 2017). People of UK are highly active on the
social media platforms which can be used by Scoot to place their marketing
campaigns. This will help in attracting larger set of customers towards their business.
 Legal: The aviation policies by government is favouring low cost airlines but at the
same time Scoot needs to ensure that they are following all the rules and regulation so
as to protect themselves from any kind of legal compliances (Graham, 2013). The
consumer laws are very powerful within the country hence Scoot also needs to follow
all these laws in order to avoid any legal problems.
 Environment: UK has been very strict on the issues related to environment (Akamavi,
et. al. 2015). Carbon emission and the increasing fuel prices is matter of challenge for
the companies like Scoot. In the years to come there will be scarcity of aviation fuel
hence utilisation of resources must be done on the priority basis.
Specifications of fight to London
It has been seen in the above section that London attracts large numbers of people. Scoot also
plans to open a flight root in the nation. This flight will be from Singapore major airport
Changi to Gatwick. This airport of London will help the company to have access of the
western part of the country. This is because of the fact that most of the Asian people in
London lives in the western part of the country. It is also the second most business airport to
London. Since this company is also operational in India hence it can also have stoppage in
Amritsar. Amritsar will also be a good destination for the company as it is near to Delhi
which is the capital city. Apart from Amritsar they can also choose Chennai in India as a
stoppage. Chennai is a metropolitan city and can be easily reached from any other parts of
India. This would be beneficial for the company as large number of Indians lives in UK. The
stoppage flights can be beneficial for the company as the planes that Scoot has most of them
cannot fly to such huge distances. Only some of them can fly to such long distances hence

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Scoot can choose this alternative route for this process. Along with this Scoot can also
purchase new and advanced flights that can directly fly to such a long distance (Murphy,
2017). It will have certain effect on the pricing of the services but with the help of strategies
such as cost cutting they can manage their flights between these two cities.
Singapore Airlines which is a parent company of the Scoot will also be going to get affected
by this expansion. This is due to the fact that a Singapore airline is the major airlines
company that flies on this route (Roll, 2015). They have a direct flight to the Heathrow
airport which is the biggest airport in London carrying highest number of passengers. This
will not only effect the business operations of the parent company but will also affect their
revenue. On the other hand it will benefit the Singapore Airlines as they will have a
subsidiary company operating on the same route. This will extend their reach in the market as
well as it will help in satisfying more number of customers. On the larger note it will also
help in increasing the profit margin of Singapore airlines. This is because Singapore airlines
can provide services to clients who want lower cost services.
Strengths of top three budget airlines in UK
There are many local airlines operational in UK. The top 3 airlines with their competencies
are as follows:
 Jet2.com Limited: It is a British Low-cost airline with fourth largest scheduled airline
in UK. This company with the help of its sister companies are providing holiday
packages that gives accommodation and travelling to 47 cities. This company has
highly skilled employees base with more than 4000 employees. There is continues
increase in the number of travellers choosing Jet2.com as their service providers.
 Monarch: This is the fifth biggest airlines company in UK and provides services at
lower cost. There major competency is that it provides innovative kinds of services to
its customers. This company has been fast in adapting towards the situations. They
have an excellent fleet size and huge shareholder base. They have all the types of
planes in their fleet from big to small which they utilise as per their requirements on
various routes.
 Flybe: This Company is largest independent regional airline in Europe. It offers its
operations in more than 15 countries over 210 routes. This company has a huge
market base. It is a member of European Regions Airline Association and is listed in

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London Stock Exchange. Excellent fleet size and higher revenue are the key
competencies of the company (Flybe, 2018). They have a big strategic alliance with
many airline providers which helps them in connecting many destinations. They did it
by signing franchise agreement with local and International players.
In order to compete with these top 3 airlines company’s strength Scoot needs to focus on their
personal capabilities. The first and the most basic thing that it can utilise are its resources.
This company has large market base and big brand name in the market. With their marketing
campaigns they can reach deep into the market of UK. Scoot is having experience of larger
part in Asia hence it can easily make strategies in more developed nation.
With the expanding infrastructure in UK, there is a chance that large number of new players
can also come in the market. These incumbents can be of different types small, big over
mediums. There are many investors in the UK market. All these investors provide an
effective platform for the new companies to come in the industry (Alderighi, et. al. 2012).
The external and internal environment in the UK aviation market has also empowered new
players to come in the industry and ensuring success.
Scoot needs to do strategic planning for effectively competing against the incumbents. The
challenge is bigger for the organisations as the nature of the incumbents are harder to analyse.
Scoot can use its experience in understanding the nature of business and at the same time can
use its resources so as to lower down the prices. This company has huge technological base
which is not easier for the incumbents to avail (Klophaus, Conrady and Fichert, 2012). The
data which they have gathered in various researches can be used by Scoot for designing its
strategy that gives them competitive advantage over their rivals. Incumbents will have lesser
operational data for understanding the behaviour of the market. With the use of advanced
system it is possible that they bring effectiveness in their processes. This will help them in
managing their operations at the same time reducing the number of errors in providing
services.
Scoot will be recognised in London as there are many people living in London who want
services at lower fare. In the starting phase it will face problems because there are many big
firms operational in London. It is their marketing campaign especially the digital marketing
campaign that will help them in making their name in the industry. There are several
parameters on which they will have to compete with the market giants for creating its name.
In this process they can take help of their parent company.

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Scoot has an experience of working in the Asian market and hence they understand their
consumer behaviour effectively (Daft and Albers, 2012). For attracting the customers in UK
they will have to make plans that are according to the purchasing behaviour of local
customers. In order to understand the consumer behaviour first of all the company will have
to conduct a thorough market research. The type of services that Scoot is providing, it can
easily attract the customers especially the ones that are from Asia. For the people that prefer
to travel by economy class, it is an excellent option.
Mode of Entry
In UK’s aviation market, there are many ways through which companies can enter. The
selection of entry mode must be done as per the requirements of the company and the speed
with which they want to extend their reach in the market. The mode of entry can be an
approach using which company will initiate its business in the country.
Scoot has its major part of operations in the Asian region hence UK will be slightly different
kind of market. There will be change in the culture with which the company is familiar to
work with. This new market will be challenge for the company especially to establish its
name in the market and ensuring success (Alamdari and Fagan, 2017). The best method to
enter into the European market will be strategic Alliance.
In this entry mode company makes strategic alliance with the local players so as to establish
its business in the country. The strategic alliance is generally made between the companies
having same nature of business. There are many companies operational in UK which has low
cost airlines structure. Scoot can make strategic alliance with any of these companies so as to
establish them in the market (Granados, Gupta and Kauffman, 2012). Both the companies can
utilise each other’s competencies so as to ensure their success in the market.
Strategic alliance is also beneficial for Scoot as they do not have to spend a lot all alone.
There will be support from the strategic partners in terms of technology, finance, human
resource. One of the biggest benefits of Strategic alliance is that it helps in maintain the
quality of services by applying the best practices from each other (Belobaba, Odoni and
Barnhart, 2015). Strategic alliance also helps the company’s employees to learn new things
and gain various skills.

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Another major benefit of using strategic alliance as a mode of entry is that even when the
losses are faced in the initial stages or in the long term, the burden of loss will not be alone on
Scoot. This will not disturb there business in other parts of the world. Once the company
understands about the consumer behaviour in the market and the have greater knowledge
about the nature of the market, they can easily come out of this alliance and can run their
business all alone (Homsombat, Lei and Fu, 2014). The only problem with the strategic
alliance is that both the companies will have to understand each other’s culture and then then
work as a partner to achieve their common goals.
CONCLUSION
From the above based report it can be concluded the Scoot is one of the best low fare airlines
company in Singapore. The value chain analysis of Scoot suggests that there internal
environment is good and most of them acts as strength for the company. Pricing,
Procurement, technology management and operations are some of the key competencies
which this company has and they can utilise it against their competitive rivals so as to gain
competitive advantage over them. The external environment of London is favouring company
in its expansion plan. Top three low fare airline companies UK have various kinds of
competencies and there is a strong chance for incumbents to come into the industry. This is a
challenge for the company and needs a strong strategic planning so as to compete with these
incumbents. Strategic alliance can be the best mode of entry that Scoot can use for entering
into the market of UK.

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