Strategic Management

Analysis of Singapore Airlines

Group no. 7

Members:

Strategic Management

Analysis of Singapore Airlines

Singapore Airlines is the most rewarded airline worldwide. In February 2012 it has already received the Readers´ Choice Award for the seventh time in a row. The airline has built an excellent reputation for customer service, attention to detail as well as ethical awareness. Singapore Airlines has established a well-orchestrated system that forsters significant sources of competitive advantage that are used to support a strategy of differentiation. The airline industry is a service industry. Service is provided by people; hence the basis for differentiation in the airline industry is the way the company’s employees treat customers and it can therefore be identified to haven a customer-related strategy approach. It is out of question that this airline counts to the world´s best. Currently it can be proud of being ranked as second best on earth according to the World Airline Survey 2011.

The advertising slogan “A great way to fly“ together with the “Singapore Girl“ has become the trademark for Singapore Airlines. It is said that the Singapore Girl awakes hospitality and Asian values and has been described as caring, warm, gentle, elegant and serene.

As Singapore Airlines has a lot of fascinating facets, potential and is an international enterprise at the same time and we would like to alalyse the company throughout this course „Strategic Management“.

MISSION

A company´s mission is its reason for existing. The mission describes what the company does and in which business it is in. For Singapore Airlines air travel is the relevant business. It is splitted up into several units which mainly comprise:

- SIA Cargo- SIA Engineering Company- SilkAir and Tradewinds Tours and Travel

The airline identifies itself as follows:

"Singapore Airlines is a global company dedicated to providing air transportation services of the highest quality and to maximising returns for the benefit of its shareholders and employees."

Singapore Airlines' Mission Statement.

When disassembling their mission the statement of being a global player is completely true. The airline serves 64 different destinations in 35 countries, including SilkAir, their regional airline as well as Singapore Airlines Cargo 103 destinations in 39 countries are being targeted. The airlines consists of 20 subsidiaries all over the world and can therefore be called a global player.

Strategic Management Analysis of Singapore Airlines Group no. 7

Singapore Airlines is also providing air transportation services of the highest quality as their business simply can be identified as air traffic or that is to say air transportation. They rise to each and every occasion in order to deliver their experience to all of their customers which is shown via their lounges and the smallest details of their inflight services. Several awards certify that the service the enterprise provides is one of the best attainable in the respective business sector. As already mentioned above the airline received in the year 2011 within the category "World´s Best Airline“ rank two, so it does for "World´s Best First Class Airline“ as well as for “Best First Class Airline Catering“. Of course, this is not the first rank but if one considers that there are hundreds of airlines existing, Singapore Airlines definitely fulfills its mission.

In a different ranking carried out by the magazine "Business Traveller Singapore Airlines“ the company already achievs rank one in the categories "Security, Condition of the planes“, "Service on Board“, "Cabin Comfort, Seat Distance“ as well as "Best Airline Regarding Flight Between the Far East and Australia“.

A further part of the mission statement is that Singapore Airlines maximizes its returns for the benefit of its shareholders and employees. This would imply to have increasing turnover and dividend payments year after year even if it grows only gradually. Upon having a look at the annual reports of the years 2008 to 2012 one can see that the enterprise lost $ 0.08 per share and therefore could not maximize the benefit of its shareholders. They also experienced a loss of 20.6 % in total revenue.

In contrast to the above mentioned development the airline was able to increase its total revenue in 2011. Also the dividend payments increased by $ 0.20 per share. Of course there are economic up- and downturns with which a company has to deal with. Singapore Airlines is doing a good job by trying to satisfy its shareholders.

Strategic Management Analysis of Singapore Airlines Group no. 7

Singapore Airlines´ network

VISION

A vision statement looks into the future, at least five years, and defines a desired future state of the company. For Singapore Airlines the vision statement comprises the following:

„Singapore Airlines has a responsibility not only to be an excellent company, but also to be an excellent citizen of the world by enhancing the lives of the people we touch. With that aim in mind, we have made many commitments to the arts and education, to our communities, and the health and welfare of our country's citizens, and those in countries we fly to. With this goal in mind, we've also made a strong commitment to preserving the environment - and our world for future generations.“

Singapore Airlines believes that supporting programmes that benefit the communities they serve throughout the world is an essential part of being a good corporate citizen. They try to use their expertise to support institutions pursuing worthwhile causes in the markets they operate. They contribute to initiatives in the arts, sports, community welfare through donations and sponsorships, among others. Singapore Airlines also provides educational assistance to communities through scholarship programmes such as the Singapore Airlines Untuk Pendidikan in Indonesia or the Smiling Together project in Thailand.

As part of their commitment to corporate governance principles, the enterprise attaches high priority to ethical business conduct in the markets they operate. They also engage employees, contractors and agents on the basis that their integrity in the conduct of their work is critical to their business and reputation.

The efforts towards an environmental friendly performance are also linked with participation in a lot of initiatives. They have taken several measures to address key areas of environmental concern linked to operations, both on the ground and in the air. This includes the aircraft emission, electricity and water consumption as well as green activities like waste minimization or the efficient use of resources.

Altogether Singapore Airlines already fulfills most of its vision with regard to being not only a good but excellent citizen. For sure they will do even more in the future to meet their own requirements and expectations.

VALUES

GOALS

Goals have to be precise and measurable, they need to address crucial issues, have to be challenging but still realistic and have to be reached within a fixed time period.

Strategic Management Analysis of Singapore Airlines Group no. 7

Using this information on to Singpore Airlines, its goal definitely is “Building a Culture of Service Excellence“. Business concept innovation aims at doing business in ways that has never been done before. The goal is to gain competitive advantage in the marketplace and reap the benefits of first-mover advantage. Being a true pioneer to sustain its differentiation. They must maintain continuous improvement, and be able to dispose of programs or services that no longer provide competitive differentiation or that could be offered in a different way. According to Singapore Airlines´ senior management, ‘‘It is getting more and more difficult to differentiate ourselves because every airline is doing the same thing . The crucial fact is that we continue to say that we want to improve. That we have the will to do so. And that every time we reach a goal, we always say that we got to find a new mountain or hill to climb.

Singapore Airlines has already been pioneer of inflight services such as free drinks and complimentary headsets as well as flying non stop from New York to Singapore. The most important event, however, was when the airline took to the skies with the new Airbus A380. While bringing the largest commercial airplane online seemed effortless from outward appearances, it took a great deal of cooperation among many areas across Singapore Airlines´ operations but they managed it.

In the future the enterprise will do everything possible and necessary to maintain its pioneer position and furthermore to enlarge the difference to its competitors. What can be criticized in this statement is that the company does not follow the main characteristics of well-constructed goals, at least not in public.

Strategic Management Analysis of Singapore Airlines Group no. 7