Strategic Realignment Of Singapore Airlines - Essay: Analysis And Recommendations.

Select an organisation (most probably the one that you are most familiar with) and that has undergone some form of strategic re-alignment. This can be public, private-sector or third sector and the changes might include restructuring, implementation of new IT systems or business practices, entry into a new market, outsourcing etc. Make your selection carefully and with a consideration to the accessibility of internal and external data.

Produce an individual report that includes an analysis of strategic options and recommended actions. It is anticipated that some theoretical frameworks do not fit well with some sectors, as they tend to be private sector focused; but you should nevertheless attempt to refer to academic theory or use frameworks that best fit your organisation. 

Singapore Airlines Limited is the national airlines of the city-state of Singapore with Temasek holdings. It was founded in the year 1972 with limited number of resources and has no domestic market. Singapore airlines limited has grown immensely by applying a disciplined approach and unremitting efforts, which leads to becoming an internationally respected airline. Today SIA has a robust market presence in the Southeast Asian region and are constantly intensifying its global footprint by exploiting the liberal mutual aviation agreements and codeshare arrangements with the other main world airlines. The vision of the company is to be an outstanding company and to be responsible citizen of the world. It focuses on delivering high-quality services to its customers and maximizing the benefit for the shareholders and the employees of the organization (Singapore Airlines, 2018).

The company operates in a competitive environment where all the market forces attract and regulates new policies in which the company operates. To identify the opportunities for growth and threats for the company it conducts the environment analysis by using different models (Singapore Airlines, 2018).

Singapore Airline fosters on realigning the strategy by adopting the launch of the premium economy in the year 2016 to provide a high-class experience to its customers. It launches a 2-4-2 cabin with the increase in the width of the seats and creates a room to stretch and provides the larger storage space for its premium customers. The company adopts this strategy to increase its market share and deliver greater experience within the flight (Singapore Airlines, 2018).

PESTLE Analysis

(Source: Market research reports.com, 2018)

The political factors majorly influence the competitiveness of the company. It describes the rules and the regulations laid by the government to control the airline industry. Such policies affect the functioning of the company. For example, due to the decrease in oil prices from the past two years, the government puts the mounting pressure to unwind the fuel surcharges. The government allowed ASEAN Company to fly in this region such policies increases the competition and demands for continuous innovation. The legal factors also influence the operations of the company as the government regulates certain policies that restrict the company to operate in other countries (Belobaba, Odoni, & Barnhart, 2016).

Economic environment directly affects the demand of the airline industry. The increase in the crude oil prices, the growth of GDP of the country, business cycle majorly influences the demand of the company. The income of the customers, which closely link to GDP of the country, affects the demand of the company (Taneja, 2017).

PESTLE Analysis

The changing trends in customer behavior influence the operations of the company. The changing demographic patterns affect the demand of the company. The customers expect continuous improvement in the services and changing preferences affect the company (PESTLE Analysis, 2018).

The changes in the technological environment help in improvising the services of the company but also act as a threat to the company. Due to improvisation in the technology, the demand for Skype web meeting has increase, which leads to a decrease in face-to-face meetings and however affects the demand of the business (Magretta, 2012).

The environmental factors influence the demand of the aviation industry. The company is pressurizing to save the environment by reducing air pollution, noise pollution and reducing the influence to global warming. The Singapore airlines are able to compete to such pressures by effectively contributing towards the economy and being the responsible citizen in the world (Taneja, 2017).

The company also uses Porter's five-force model to determine the factors that influence the ability of the firm to serve the customers and achieve profit.

Industry Rivalry

It is analyzed that the company faces strong competition with the firms who offer the same price as Singapore airlines and the customers quickly switches to the other companies. Such factors create an expense for the company as the seats remain unoccupied and the storage cost increases. Many rivalry companies collaborate with American and European countries and offer a low price to the customers however leads to a decrease in demand for Singapore Airlines (Wiki Health, 2017).

 The potential entrance of new companies is low because of the instant heavy expenditure and the political factors threat the entry of new entrants. It requires high investment and storage cost which decreases the entry of new entrants (Wiki Health, 2017).

The potential of substitutes for Singapore airlines in moderate because apart from the benefits provided by airlines. The customers also use buses, trains to travel to the close cities and however affects the demand of the company. Singapore has no chances to compete with mass rapid transit or buses in the country (Wiki Health, 2017).

Although there are high price sensitivity and high industry, the rivalry the company provides the loyalty services to its customers and applies strategies to attract more customers. The company applies the strategy to provide premium economy service to attract more customers. However, the power of buyers is moderate (SCRIBD, 2018).

Industry Rivalry

Bargaining control of the suppliers is high because to ensure the safety and improve services of aircrafts the company depends upon aircraft suppliers and for fuel, the company depends on the supplier. However, the actions of supplier majorly influence the demand of the company (SCRIBD, 2018).

It is believed that the organization’s internal capacities also help in maintaining a competitive advantage. The company analyses the internal market forces to analyze the opportunities for growth and threat using a resource-based view model. The internal resources of the company will help in analyzing the external opportunities of the company. The company adopts the VRIO framework to analyze the competencies of the company. The company has the tangible and the intangible resources to maintain its competitive advantage in the industry (Roy, 2015).

Value  

Singapore Airlines provides the premium economic cabin to its customers and contributes as a responsible citizen of the country. It has the well-designed cabins with continuous innovation in the ways of providing services (Wiki Health, 2017).

Singapore Airlines have the large market share and a strong brand name because it adopts the dual strategy of providing lower price tickets with creating differentiation in services provided (Wiki Health, 2017).

Due to high industry rivalry, the chances of imitability of the strategies of the company are more. The close competitors also imitate the strategies of the company, which creates the demand for regular restructuring of the strategies (Wiki Health, 2017).

Singapore Airlines has grown immensely and has created a large market share. The company is able to maintain its brand name and increases efficiency in its operation (Wiki Health, 2017).

Emerging trends and implications

The main drivers for developing changes are the expectations of the customers of high-quality services and involvement of higher level of technology that affects the demand of the industry.

• Development of oversized aircraft leads to a reduction in the prices of tickets to fill the seats of oversized aircraft. Excessive lower prices create a negative impact on the revenue of the company and reduce the income of the economy (Heracleous & Wirtz, 2012).
  
  
• Development of premier economy services involves delivering of high-value services and creating more customers. Such emerging trend will help the company to increase the revenue and contribute to increasing revenue of the country (Heracleous & Wirtz, 2012).

The strategic objectives of the company include delivery of higher customer services through the strategic realignment of the premium economy services. It focuses on the development of the premium services for the long haul flights and must ensure that the company provides the premium services at the affordable prices so that the consumers are not becoming reluctant to pay for such services. It must install the services to enhance the experience of the customers (Taneja, 2016).

Value creation Model

To achieve its strategic objective the company uses the value chain model that helps in analyzing the value created for the customers and depicts the ability of the company to maintain its competitive advantage (Wensveen, 2018). 

Potential of New Entrants

The company uses the porter’s value creation model to create and analyze the value of the organization to the customers. In this framework, value chain refers to a series of events that are undertaken by the company to generate value for its customers. It consists of certain elements, which depicts the organization performance. It depicts how the organization inputs are converted into outputs that are purchased by the company (Professional Academy, 2018).

(Source: saylordotorg.github, 2018)

Primary Activities

Human resource management

Singapore airlines develop value to the customer by establishing training programs for its employees that are highly influenced by the culture of the organization and develop the training programs, which are valuable, rare and not imitable. The company focuses on developing employees by applying on- the- job training methods and collaborating with the workforce development agency of Singapore. They consider their employees as their competitive advantage and efficiently train them (Professional Academy, 2018).

Singapore airlines are well known for its in-flight service delivery and have been developed a well-known brand for delivering excellence services. Its operation includes check-in counters, baggage handling, and in-flight services, which differentiate its product from the other airline industries. The company receives numerous awards for its excellence in In-flight services and provides an advantage in comparison to its rivalry firms (Professional Academy, 2018).

The company effectively manages its marketing and sales activities by collaborating with global renowned advertising agencies and becoming the most recognizable strong brand in the airline industry (Taneja, 2016).

The company shows the loyalty in delivering after sale services to its customer by effectively handling the customer complaints, lost baggage problems and ensuring the efficient delivery of after sale services (Wensveen, 2018). 

Inbound logistics

SIA’s inbound logistics includes Aircraft and fuel purchase, route scheduling, flight schedule. These actions are considered important because they provide the platform to start the operations and leave a major impact on SIA’s operations (Wensveen, 2018). 

The activities in outbound logistics include flight connection, rental car, hotel booking, and baggage handling. The activities are primarily served to the customers to deliver higher customer experience and develop its value to the customers (CAPA, 2015).

SIA’s infrastructure includes the hardware and the software. The catering center, maintenance center, and freight terminal are highly developed and in software activities the company ensures that there is appropriate planning, controlling and financial system (CAPA, 2015).

The adoption of innovative technology helps in developing value to the customers. Singapore Airlines were the first who introduced Airbus 380 and provides the in-flight entertainment to deliver a memorable experience to its customers. The company was the first to provide global satellite operation to provide telephonic service in flights and develops the competitive advantage within its customers (CAPA, 2015).

Potential of Substitutes

The company develops its positive image by delivering value to the customers. It focuses on enhancing the customer experience through augmentation in the delivery of services to the customer. The company provides extensive training to the employees so that they are able to handle the customer’s expectations and maintain its competitive advantage. The company adopts innovative technology and develop new ways to entertain the customers in the flight. Singapore Airlines was the first to offer in-flight entertainment for the customers. The company uses innovative ways that help to boost the brand image and however, leads to a reduction in the operation cost which overall improves the efficiency of the company (CAPA, 2015).

The company sustains its positive image by strengthening its customer services, human resource and collaborating with the other renowned airline industry to reach globally. The company ensures that the customer receives satisfaction by delivering after sale services and handling the customer queries (Heracleous & Wirtz, 2012).

They deliver the quality, reliable service across the globe and provide a personalized experience to its customers. Its strong brand image helps to gain a competitive advantage over the rivalry firms and expand its market share. The company provides maximum value to its shareholders and involve continuous innovations to improvise its services and deliver a high-value experience to its customers. The company is able to maintain its image by providing quality service at affordable prices and ensures that the crew cabin is fully efficient in delivering services to the customers (Wensveen, 2018). 

Strategic change management refers to the structure of managing change in the organization in a thoughtful manner to compete in the changing environment and helps in maintaining the competitive advantage of the organization. The need for strategic change in the Singapore airlines is to meet the changing requirements of the customer and focus on delivering the higher experience. The company aims to realign its premium economy strategy in 2016 because the company was not able to earn a premium for providing higher value services and the major drawback that the company faces in the launch of premium economy is the consumers do not prefer to pay a premium for short haul flights. To realign the strategy the company undertakes various steps which help in enhancing services (Reuters, 2018).

The first the step the company must undertake is to scrutinize the external environment and analyze the opportunities and threats to the business. Scanning of the environment helps the company to analyze the changing market trends that can act as a threat to the company. Due to constantly changing environment it builds, the needs to realign the existing strategy and improvise the services. It will help the company to implement better strategies that will turn the realign strategy into a favorable one (Lawton, 2017). 

Bargaining Power of Buyers

After scanning the environment Singapore airlines forms the strategy to meet the changing expectations of the customer and to deliver a higher quality experience. It formulates the strategy to provide premium economy services to its customers and enhance the customer experience by developing a companion app to allow the control of the customers on their in-flight experience. The company must develop the strategy that will provide the premium services on the affordable cost and will help in maximizing the profit (Albers, Baum, Auerbach & Delfmann, 2017). 

The third step in the process is to implement the actions that will bring change to the organization. To implement the change the company provides the training to the employees and guide their actions towards implementing change in the organization. The company adopted the dual strategy of providing premium services and low fare tickets to the customers. It enhances the performance of the front line employees and ensures that the customers receive appropriate in-flight services (Lawton, 2017). 

This is the last step in the process of implementation of strategic change. The company evaluates that the actions of the employees are in accordance with the new changes formed by the organization. It ensures that there is proper control of the activities and the uncertainty is reduced (Baxter & Srisaeng, 2018).

The organization culture majorly influences the implementation of change in the organization. The culture depicts the behavior and attitude of the employees towards the new change. It describes whether the employees are flexible enough too corporate towards the change in the organization (Low & Lee, 2014).

The business operates in the environment, which requires a continuous change to encounter the changing expectations of the clients and to overcome the challenges of the market trends. Changes in the expectations and demands of the customers build the need to re-align the strategies and maintain its competitive advantage from the close rivalry of the industry. The company adopts the Lewin’s change management model to inculcate the change in the organization process and ensure overall efficiency in the operations of the company (Grant & Jordan, 2015). 

(Source: Chegg study.com, 2018)

This is the first stage of the model, which describes the changes the company tries to bring in the organization. In this stage, the company specifies the reason for evolving change to know the reaction of the employees towards the change in the organization structure. This stage is the most crucial because it depends upon the organizational culture and the way the employees react towards the changes in the policy. At this stage, the company will formulate new policies that will help in overcoming the barriers faced by the company. It leads to a lot of uncertainty due to the actions of the employees (Belton, 2017).

Bargaining Power of Suppliers

At this stage, the uncertainty is resolved because the company finds the new ways to accept the change and directs the actions of the employees towards adopting the new changes and improves the organizational efficiency. The company trains the employees to further enhance their performance and provides excellence in the rendering of services. The company aims to divert the actions of the employees towards the achievement of re-alignment of the strategy formed. The company aims to provide premium economy service to its customers by making more investments into the latest technological innovations and improvising in-flight experience. The transfer from the unfreezing stage to change stage takes time because of the difference in the reactions of employees (Roy, 2015).

This stage of the model embraces that the human resource of the organization is getting comfortable to the change and start implementing and understanding the changes. The company puts the continuous efforts to make the people accept the change and improve the overall efficiency of the organization. The company refreeze the new changes and start implementing new ways to handle the diverse situations of the competitive environment (Roy, 2015).

• The organization culture acts as the major blockage of the change because of change in the perceptions of the people. Not all the employees perceive that change will provide benefit to the company. The changing attitude, the behavior of the employees also acts as a blockage in implementing change in the organization. The difference in perceptions can majorly affect the working environment of the organizations as it can create dissatisfaction among the employees of the organization (Halpern, 2018).
  
  
• The blockage faced by Singapore Airlines was the less awareness of the premium economy services delivered by the company (Halpern, 2018).
  
  
• The main blockage of change for implementing realigning of the strategy is the high-cost flights for the short haul flights (Wittmer, Bieger & Muller, 2011).
  
  
• The blockage in implementing the change in the operation of the company requires huge investment and availability of the resources, which in turn increases the cost and the risk associated with it (Wittmer, Bieger & Muller, 2011).

• Development of adequate training programs acts as a facilitator of change because it equips the employees with the required skills and leads to operational efficiency in the organization. The positive behavior and values of the employees facilitate change in the organization. They understand the need for change and deliver a positive reaction towards the change (Shaw, 2016). 
  
  
• The development of premium services, installment of the various inbuilt entertainment facilities in the flights acts as the facilitators of the change (Shaw, 2016).
  
  
• The company provides the more baggage facilities and expands the storage facility for its customers. It focuses on delivering higher services by expanding the width of the seats and acts as the facilitator of change (Shaw, 2016). 

It is analyzed that the goals of the organization are achievable and realistic because the company has implemented the change in the organization by developing the companion app that delivers higher in-flight entertainment services to the customers and fosters the appropriate training to its employees to increase the operational efficiency and delivering a higher level of services. The company has expanded its storage capacity and developed the attractive offers for the customers. It has employed a renowned chef to deliver quality food to its customers. The company is able to attract customers by delivering affordable price tickets and ensuring premium services for its customers (Belton, 2017).

The company can realign its strategy of the premium economy by delivering the premium services for the long haul flights so that the customers are ready to pay the premium prices. The company must provide the premium services at affordable prices so the cost of the company in developing such services can be recovered in the form of revenue generated.

Singapore airlines have shifted from the introduction stage to the growth stage of the product life cycle because the company applies continuous efforts to add additional features to its services and focus on delivering higher customer satisfaction. The company promotes its brand through renowned celebrities and expand the market share by becoming a global brand. The company expands its distribution channel as the customers are getting attracted towards the services and the demand for the services is increasing. It is observed that the profit margins of the company are increasing in folds and the company further makes huge investments in realigning its strategies to gain more loyal customers for its brand (CAPA, 2015).

Resource Based View

(Source: smartsheet.com, 2018)

The company aims to sustain its competitive advantage in the competitive business environment and makes huge investments in the adoption of innovative methods to attract customers (CAPA, 2015).

Conclusion

From the above discussion, it is concluded that Singapore airlines has grown immensely and has become a renowned global enterprise. The company adopts the continuous innovative techniques to meet the changing needs of the customers and enhance their experience. Due to the strong competition among the rivalry firms, the company aims to maintain its competitive advantage by realigning the strategy and adopting the different theoretical model to facilitate change in the organization. It analyses the macro and the microenvironment by application of the appropriate model to analyze the threats and the opportunities, which exist in the competitive business environment and aims to achieve operational efficiency in the organization. The company realigns the strategy and implemented premium economic services for its customers.

References

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