Singapore Airlines Management: PESTEL, SWOT, and Competitive Analysis

This report provides a comprehensive analysis of Singapore Airlines' management practices. It begins with an introduction to the company, its objectives, and its position as a national carrier. The report then delves into a PESTEL analysis, examining the political, economic, and social factors affecting the airline. Following this, a competitive analysis using Porter's five forces is presented, assessing industry rivalry, the threat of substitutes, new entrants, and the bargaining power of customers and suppliers. A SWOT analysis highlights the company's strengths, weaknesses, opportunities, and threats. The report concludes with recommendations for the airline's strategic development. The analysis covers key aspects of management including strategic planning, external environment analysis, and competitive positioning within the airline industry.

Running Head: Introduction to Management
Singapore Airlines
Introduction to Management

Introduction to Management 1
Table of Contents
Introduction......................................................................................................................................2
About the company..........................................................................................................................2
Objectives of Company................................................................................................................2
PESTEL Analysis............................................................................................................................3
Political........................................................................................................................................3
Economic.....................................................................................................................................3
Social............................................................................................................................................4
Porter’s five forces...........................................................................................................................4
Industry Rivalry...........................................................................................................................5
Threat of Substitute......................................................................................................................5
Threat of new entrants..................................................................................................................5
Bargaining power of customers...................................................................................................5
Bargaining power of suppliers.....................................................................................................6
SWOT Analysis...............................................................................................................................6
Recommendations............................................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction to Management 2
Introduction
Management of the organization performs its functionalities on the basis principles, ethics and
the standards in order to accomplish the tasks in an effective manner. Business organization
consist of numerous departments and upper level management team control the other department
in order to perform the task on the basis of the expectations made by the upper level
management. For maintaining the smoothness in the functionalities of the organization,
management controls and directs the other departments of the organization to perform their
functionalities on the basis of rules, regulations, standards and principles. This report will focus
over the managerial practices of Singapore Airlines and along with the managerial practices,
objectives of the company, external environmental analysis, competitive analysis and SWOT
analysis will also be covered.
About the company
Singapore Airlines Limited is a national carrier for the country with the motive to represent their
national at the international level. The company was founded in 1972 and since then, they have
developed their effective image in the international airline industry through rendering high
qualitative services along with effective safety and security measures. With their existence at the
international level, company’s primary focus is over Australian and Asian markets. Singapore
Airlines acts as the corporate branding figure for the nation and the company was ranked on the
second position across the globe in terms of market capitalisation by the International Air
Transport Association with the capital worth of US $14 billion. Singapore Airlines has huge
resources along with the range of young fleet of planes. The group of Singapore Airlines
includes various small and medium level companies engaged in the same sector. Singapore

Introduction to Management 3
Airlines’ Airbus A380 was the largest passenger aircraft and it was the first company to perform
this act. In the same scenario, organization was ranked on the 10th position in terms of large
number of international passengers carried (Singapore Airlines, 2018).
Singapore government investment and Temasek Holdings are the owners of Singapore Airlines
and Temasek Company holds 56% of the total market shares of the company. The company
operates from Singapore Changi Airport.
Objectives of Company
Company’s primary objectives are to provide qualitative air transportation services to its target
audience. Along with this, company is also seeking towards the expansion and the growth in the
international market. Currently, organization is performing their functionalities mainly in Asian
and Australian market while to enhance the market share of the organization, expansion will be
required. Along with rendering qualitative and exclusive services to its target audience,
organization is also seeking towards the developing customer relations through which customer
retention objectives could easily be attained. Singapore Airlines has quite effective goodwill in
the international airline industry but to attain the competitive advantage in the market,
organization needs to adopt certain unique strategies from its competitors (Camilleri, 2018).
Other objectives of the organization are:
 To raise their revenues and the profitability;
 To develop effective customer relations;
 To raise the quality of their services as compared to their competitors’;
 To lead the international airline industry in coming future.

Introduction to Management 4
PESTEL Analysis
Every organization needs to suffer from two types of environments i.e. internal and external.
External environments include the macro environmental factors which are out of controllable
from the management. The impact of the macro environmental factors over the business
performance is huge in comparison with the impact of internal business environmental factors.
Organization needs to perform PESTLE analysis in terms to match up with the external
environmental factors. Internal environmental factors are manageable and controllable at the end
of management of the organization but external environmental factors are not (Clarke, 2014).
Thus, Singapore Airlines needs to execute the PESTLE analysis in relevance to analyse the
market conditions of the target market as well as to adopt certain crucial measures in terms to
reduce the impact of those factors from the performance of the organization. Following is the
PESTEL analysis of the Singaporean market in relevance to the Singapore Airlines Limited:
Political
National political frameworks majorly affect the operations and the functionalities of airline
industry. With the political stability, Singaporean government’s policies and the regulations does
not impact over the international as well as over the domestic companies’ functionalities. They
do not believe in trade barriers while they promote national and international companies to
execute their functionalities in the Singaporean market. But as Singapore Airlines is owned by
government bodies, thus, it is the duty of the organization to perform their functionalities on the
basis of the policies and frameworks described by the management. Along with this, it is
essential for the organization to operate its functionalities on the basis of consumers’
requirements. Singapore Airlines renders its services and products directly to the customers and

Introduction to Management 5
it is the duty of the organization to manage its operations on the basis of governmental
requirements (Dombrowski, 2014). Organization also needs to consider the governmental rules,
regulations, policies and frameworks in relation with the customers’ requirements. Along with
this it is also essential for the organization to get the support from the government bodies as the
company is a representative of the nation’s flag at the international level. Thus, it is the duty of
the organization to perform their functions on the basis of government’s policies and along with
this, it is the duty of the organization o set up their plans and the policies on the basis of
standards described by the government bodies (Fan & Lingblad, 2016).
Economic
In the airline industry, fuel cost plays crucial role and to perform the functionalities in a
smoother manner, consideration of the economic conditions is must for the organization. The
Singapore Airlines Limited is owned by the government and being the part of the governmental
organization, it is the duty of the organization to maintain the prices through which all segments
of the market could be approached. Governmental organizations are supposed to provide
cheapest services to the citizens of their country and Singapore Airlines is a major part of the
government organizations, thus, it is the duty of the organization to cut off their costs and profits
in relevance with maintaining the affordable fare prices through which large segment of the
market could be approached. Airline companies are already operating their functionalities on
premium pricing strategies and government has imposed some regulations through which
companies cannot overrule those impositions. Hence, airline companies are required to adopt the
strategies through which the governmental as well as the market needs could be fulfilled easily
and effectively (Heracleous & Wirtz, 2012).

Introduction to Management 6
Social
Social trends have great impact over the functionalities of airline companies. Society plays
essential role in the success as well as in the failure of an organization as they are the part of
target audience which consumes or experience the products and services delivered and rendered
by the organizations respectively. Airline services are bit expensive in comparison with the other
modes of transport, thus, target market for the airline companies are limited to an extent. And the
companies are required to adopt certain strategies which plays essential role in terms to increase
the profitability or to maintain the profitability. With this, the market share of the organization
remains constant and limited to an extent because availing the airline services are not affordable
for the middle and lower class income segment groups (Heracleous & Wirtz, 2014). In recent
periods, airline companies have adopted certain crucial and unique strategies through which they
are able to target the rest part of the market along with the high level income group. These
strategies include providing discount offers on the fair prices, providing various benefits such as
insurance and food facility within the flight, etc. This has generated the competitive business
environment for the airline companies and this has also increased the option for the organization
to enhance their market share by targeting middle and lower income groups. Singapore Airlines
is leading the market in relevance with providing all possible airline services at cheaper rates in
comparison with their competitors’. Being the part of the government, it is the duty of the
Singapore Airlines to contribute certain part of their earnings towards the social welfare and
towards development of the society. Generation of the employment opportunities will also lead
to the development of the society as well as increase in the economy of the country (Heshmati &
Kim, 2016).

Introduction to Management 7
Porter’s five forces
This technique is helpful in analysing the competition in the target market. With the help of this
analysis, organization will be able to determine the micro environmental conditions in relevance
with the competitors and their strategies. Outcomes generated from this analysis will help the
organization to evaluate the effective measures through which competitive advantage could
easily be attained along with determining the ways to become the leader of the target market.
Industry Rivalry
In airline industry, rivalry is intense and to manage the rivalry in the industry, Singapore Airlines
is supposed to implement evaluation techniques in relevance with determining the current market
trends as well as the consumers’ demands so that competitive advantage could be attained. The
busiest routes of the airline industry face the intense rivalry situations. Such busiest routes
majorly exist in the popular cities or famous cities for their attractions, culture and for unique
activities (Joo & Fowler, 2014). Along with it is also essential for increasing the efficiency of the
organization through providing them unique experiences along with leisured travelling
experience. The busiest route across the globe is ‘Kangaroo Route’ and this route connects New
Zealand, Southeast Asia, and Australia. Industry rivalry in this route is quite intense and to gain
the leadership position and to gain competitive advantage in that market, Singapore Airlines
Limited is supposed to develop unique strategies along with effective managerial activities to
attain their desired goals and the objectives (Luo, Olechowski& Magee, 2014).
Threat of Substitute
Impact of threat of substitute for the airline services is weak in relevance to other factors because
aeroplanes takes less time in comparison to the other modes of transport in travelling. But the

Introduction to Management 8
fact of high prices also cannot be ignored. Apart from this, other means of transport are rail
network, roadways and waterways. All these transport services took large amount of time in
comparison with the airline services. But with the introduction of the bullet trains by Japan rail
network is a great threat for the airline industry because it takes approximately same time in
comparison with the airline services. Various countries had already adopted this idea from the
Japan for moving towards the suitable development along with providing better and reliable
experience to the citizens of the country. To avoid these kinds of circumstances, Singapore
Airlines along with the other airline companies needs to adopt certain strategies for attaining
their desired goals and the objectives (Mhlanga & Steyn, 2017).
Threat of new entrants
This factor too does not create much impact over the existing business organizations in the
industry. This is because entering into the airline industry is quite difficult as well as expensive
task. Setting up an airline company requires huge capital investment along with highly qualified
and skilled manpower. Whereas, some of the cheap airline companies have set up their market
share and have affected the business of premium airline companies. Such companies are Air Asia
and Jet Star. Thus, premium airline companies Singapore Airlines needs to decrease their fare
prices in relevance to gain the competitive advantage in the target market (Min & Joo, 2016).
Bargaining power of customers
With the entry of cheap airline companies, bargaining power of customers have been increased.
This has leaded the premium companies to adopt appropriate pricing strategies through which
the prices could be reduced and an effective market position could be acquired. To gain the

Introduction to Management 9
customer base and to maintain the same, organizations engaged in the industry needs to develop
some unique and attractive strategies.
Bargaining power of suppliers
Fleets, airbuses and other related services are being supplied by the outsiders to the airline
companies. Thus, this factor consist a major role in terms of airline companies’ success and
growth. Air transportation includes various unique services such as food, beverages and other
leisured services. Companies engaged in production of fleets, boing and airbuses are facing
duopoly while companies industries of manufacturing of engines are facing oligopoly. With the
development relationships with suppliers, organization would be able to gain competitive
advantage amongst the international airline industry (Nesset & Helgesen, 2014).
SWOT Analysis
This is the strategy through which internal and external factors of the target market are evaluated
along with the strengths and the weaknesses of the organization. Company’s strengths,
weaknesses are analysed and compared on the basis of external environmental factors such as
opportunities and threats. With the help of outcomes generated from this comparison, company’s
survival is being evaluated in the target market.
Strengths
 It is a strong airline brand in the
domestic as well as in the international
airline industry. They have a strong
backing from the government.
Weaknesses
 Singapore Airlines majorly rely over
the international traffic.
 With the increase in the competition,
market growth is decreasing rapidly for

Introduction to Management 10
 At the international level, Singapore
Airlines is strongly present in Australia,
Asia and in Europe (Sengupta &
Sengupta, 2014).
 Their customer satisfaction rate is high
as well as it is the most preferred choice
for the passengers.
the organization.
Opportunities
 In order to expand their network in the
rest parts of the globe, organization
could tie up with various other
international and domestic airline
companies. This will help the
organization to enhance their market
share along with increasing the
revenues and profitability.
 Introduction of new and improvised
fleets in relation with increasing the
customer satisfaction.
Threats
 Rapid fluctuations in the fuel costs are
the major threat for the organization as
it is affecting the profit margin of the
company.
 Aggressive promotional strategies used
by its primary competitors could reduce
their market share (Vieira & Loures,
2016).

Introduction to Management 11
Recommendations
Following are certain points which are recommended to the Singapore Airlines Limited for
increasing the effectiveness and efficiency of their management and the managerial practices:
 In terms of market capitalisation and large number of passengers carried, Singapore
Airlines is ranked amongst the top airline companies. Organization is supposed to
maintain the same position along with they need to concentrate over acquiring the rest
part of the market.
 Their hospitality services, premium services and qualitative products are their USPs.
 Being a premium airline brand, they have limited customer base. To maintain their
unique goodwill in the market, management of the organization needs to execute the
market analysis on regular basis along with determining the current market trends and
consumers’ requirements in order to maintain their effective image in the target market.
 Organizational management is required to perform certain strategies through which the
major issue of entry of cheap airline companies in the industry could easily be managed
because it reduces the profit margins as well as the customer base. With the help of
effective and efficient pricing strategies, organization would be able to gain the
competitive advantage along with attainment of the desired goals and the objectives.