Strategic Analysis of Singapore Airlines: Business Strategy Report

This report provides a comprehensive business strategy analysis of Singapore Airlines (SIA). It begins with a SWOT analysis, examining SIA's strengths (e.g., government backing, customer engagement), weaknesses (e.g., high costs, reliance on international traffic), opportunities (e.g., global expansion, young aircraft fleet), and threats (e.g., competition, budget airlines). The report then applies Porter's Five Forces model to assess the airline's competitive environment, considering the threat of substitutes, bargaining power of buyers and suppliers, competitive rivalry, and the threat of new entrants. Following this, a PESTLE analysis evaluates the political, economic, social, technological, legal, and environmental factors impacting SIA. Finally, a VRIO analysis assesses SIA's resources and capabilities in terms of value, rarity, imitability, and organization, concluding that SIA can gain a competitive advantage. The report recommends strategies for expansion and fare adjustments to enhance SIA's market position.

Running head: BUSINESS STRATEGY
Business Strategy
Name of the Student
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Author note

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BUSINESS STRATEGY
SWOT Analysis of Singapore Airlines
The SWOT Analysis includes strengths, weaknesses, opportunities and threats which
is considered to be the mechanism that is helpful in understanding the effectiveness of the
firm in the competitive business environment.
Strengths
Singapore Airlines is considered to be one of the largest airlines in the world and the
company is mainly backed by the different government rules and regulations. Moreover, the
company is capable of boosting the service delivery in an impeccable manner which will be
capable of managing their growth successfully. Moreover, the SIA has been capable of
implementing and building the effective kinds of customer engagement programs which are
mainly efficient in valuing the customers successfully.
Weaknesses
STRENGTHS
It is mainly backed by the local government officials
The different services which are delivered are
impeccable in nature
The company has efficient kind of effective flier
programs
WEAKNESSES
It is considered to be one of the expensive airlines
It mainly follows the international traffic
There are different issues related to capacity which
impacts the growth of the company negatively
OPPORTUNITIES
The company has the chance in expanding their
operations in an efficient manner
There are differennt destinations which need to
explored by the SIA
There can be growth of Young Fleet in the SIA which
will be efficient in managing operations
THREATS
There is high level of competition present in SIA
There is rise in the prices of the fuel which
impacts the effectiveness of SIA
There are few restrictions of the airspace which
will be impacting growth patterns of the company
SWOT

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SIA is one of the expensive airlines as it has been seen in comparison to the other
airline companies which are present and therefore, it decreases the number of customers.
Moreover, SIA is relying heavily on different kinds of international traffics and the capacity
issues are the other aspect which is impacting growth of SIA in the competitive business
scenario. Due to fluctuations in demand, it will be impacting the growth of the company
negatively.
Opportunities
Singapore Airlines have the capability to expand the different business operations in
different parts of the world and it will be providing a different aspect for exploring in various
sectors as well. As of the year 2015, SIA has youngest aircraft fleet and it is the most suitable
opportunity for improving their business operations successfully in adopting the new airline
which are commercials.
Threats
There is high level of stiff competition in the airline industry and as there has been
increase in the level of the budget airlines in the market, it is impacting the growth of the
company negatively.
Porter’s Five Forces Model Analysis of SIA
The Porter’s Five Forces Model is considered to be the framework which helps in
analysing the competitiveness level of the business environment in identifying the
potentiality of the strategies in generating profitability successfully.
Threat of Substitute Products- It is weak or low as the financial aspects which are
required in entering the airline industry. Moreover, there has been increase in the budget

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airline companies in the market and it is difficult for making the strong position in the
respective competitive business environment.
Bargaining Power of Buyers- It is low in nature as there is rise in the level of
inflation in the industry in world and the goal of customers is to spend less and their
bargaining power is less.
Bargaining Power of Suppliers- It is low as the products and services which are
being provided by the suppliers are standardized in nature and less differentiated in nature.
Therefore, it makes easier for the buyers to switch the suppliers and it makes the bargaining
power of the suppliers as the weak force. There are no such substitutes available in case of
suppliers and they do not have provide the credible threat for the forward integration in the
industry.
Competitive Rivalry- It is high in nature as there is high and stiff competition present
in the airlines industry as there are different airline companies which are developing at a
higher pace through including the different market strategies that helped them in gaining
competitive advantage. Due to the same, it is impacting performance of SIA in a negative
manner to a large extent.
Threat of New Entrants- It is low in nature as there are various rules and regulations
present in the aviation industry such as the government rules and regulations that are
impacting performance of the SIA negatively.
Limitations on Five Forces Model
Firstly, the respective five forces model is suitable for the different market structures
which are simple and it will be capable of understanding their position in the competitive
business environment.

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BUSINESS STRATEGY
Moreover, it is failing in considering the non-market related forces which is affecting
the industry in a negative manner. Lastly, it can be outdated tool as it has been developed
previously.
PESTLE Analysis of SIA
PESTLE Analysis is considered to be the specific tool which is helpful for identifying
the different kinds of external factors which are impacting the performance of the company in
a negative or positive manner. The PESTLE analysis of SIA is as follows:
Political There are different regulations of
government which back up the SIA and the
political changes in the airline industry can
lead to the uncertain changes in the
operations of SIA
Economic The entire aviation industry accounts for
national development along with accounts
for international as well as regional
development.
Moreover, the prices fluctuations of the fuel
can be affecting profitability of the industry
Social There can be different changes in
preferences of customers as there are
different players in the industry can be
affecting SIA
The high prices of the flight fares can be

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impacting attracting customers in a negative
manner
Studying of the patterns followed by the
customers is the essential element for
maintaining strong customer base
Technological The advancement in technology is the key
element in airlines industry and it is playing
a vital role in promoting the airline industry
The same can be achieved by SIA through
advanced in as well as out flight systems
Legal There is inclusion of the international trade
related regulations which can be impacting
performance of the SIA in a negative
manner
Environmental SIA is capable of promoting the different
CSR and sustainability practices and they
have been capable of ensuring the maximum
utilisation of the natural resources
Limitations of PESTEL Analysis
From the analysis of the PESTLE analysis, it can be seen that there are few limitations
which include the collection of data is highly time consuming and the limited resources, the
data cannot be well-updated.

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VRIO Analysis of SIA
The VRIO Analysis is considered to be the tool which is helpful in understanding the
condition of the business whether they have the required capabilities and resources which
will be improving their performance in the long-run.
Valuable The resources of SIA is highly valuable and
there are opportunities in which they can
invest
The highly trained workforce of SIA is
valued in the company
There are valued patents which will be
reducing the trade interference
Rare The financial resources are rare and it is
owned by the company
The different employees are rare for SIA
which will be impacting performance of the
company positively
Imitable The financial resources of SIA are not able
to be imitated and it will be taking long time
in acquiring the same
Organization The financial resources are well organized
and it ensures the capacity production of the

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company
The employees of the company are well
organized which will be capable of
maintaining their effectiveness
The VRIO Analysis of SIA helps in understanding the fact that the company will be
capable of gaining competitiveness in the market which will be suitable for the increase in
productivity of the company in a successful manner.
Summary
Therefore, from the overall analysis of the internal and external environment of SIA,
it can be seen that SIA is operating in an efficient manner and it is recommended that there
are few steps which can be taken by the company for expanding their operations with the
increase in the number of destinations. As there is high level of competition present in the
market, therefore, the main aspect which needs to be looked into by SIA is the fares of the
flight as it needs to be reduced. The company needs to establish the strategy for entering in
the new markets which will be helping them in improving their efficiency.