Case Analysis Process.ppt

External internal general environment globalization

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External Internal General Environment: •Globalization is increasing demand for international air travel (esp. to Asia) •Political changes include the increase of free trade markets (like Singapore) •Economic conditions are important as recessions cause price sensitivity Industry: •Consolidation in the airline industry is increasing to enhance scale and scope •Alliances are the hottest strategy tool as companies seek global connections •Customers are increasingly price sensitive but business segments are loyal •There are little to no substitutes for international air travel Competition: •Key domestic competitors are Japan Airlines, Thai Airways, and Cathay •Key international competitors are United, KLM, and British Airways •SIA has the best cost structure for premium level service but losing ground Strengths: •Reputation and brand image of the “Singapore Girl” •Young fleet and excellent training facilities and programs •Extensive regional and international route network Weaknesses: •Increasing difficulty supplying high quality labour at low costs (esp. Singapore) •“Buttoned Down” image may not be attractive to younger demographic •High cost structure needed for high quality service is difficult to change
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Case Example – synthesising Singapore International Airlines Question Option / Hypothesis Decision Criteria Pros Cons Invest in VA? Yes Return on Investment •Enables a lower cost product offering •Access to younger demographic •Complimentary routes •Competes with Star Alliance •Limited resources/ opportunity cost •May affect reputation Overall Strategy? Low Cost (rather than Differentiation) Long Term Profitability •Head to head with new competitors •Seems to be the trend in the U.S. •Fuel costs are rising •Lose reputation as high quality provider •Goes against infrastructure •Differentiation may be the only way to win Stay in Star Alliance? Yes Market Share Growth •Cross-selling opportunities to new customers •Access to additional routes quickly •Lose control of scheduling •May compromise the consistent quality of service
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Case Template – Concluding Singapore International Airlines •This is a critical time as technology and global reach require a high-end international access airline •SIA’s best strengths are high end service and global routes Going low-cost will damage long-term profit potential SIA should set a strategic Vision to be the leading global premier service airline Risks Implementation •Alliances don’t deliver •Costs get too high •Other airlines act first •Invest in VA (but go high end) •Stay in Alliance •Expand high quality labour pool
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  • One '14
  • Evaluation methods, Singapore Airlines, Effective Case

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