5.0SIA’s Organisational Structure10-11
SIA started off with a humble beginning as part of Malayan Airways. In 1947, Malayan Airways operated services between Singapore, Kuala Lumpur, Ipoh and Penang. During 1972, where Malaysia -Singapore Airline (MSA) split in two entities, name Malaysian Airline System and Singapore Airlines. Since then, SIA has emerged as one of the top international airlines in the industry (SingaporeAirlines, 2012). SIA was ranked 17th in Fortune magazine’s list of most admired companies in 2007, the only airline to make it in the top 50. The company also consistently receives prestigious industry awards. SIA has never posted a loss on an annual basis, and has achieved substantial and superior returns in an industry plagued by intermittent periods of disastrous under-performance. From the very first days of SIA, several things were clear in the mind of the brand owner: the airline was determined to be a highly profitable brand, and the best airline brand in the aviation industry. SIA has managed to integrate elements of differentiation and cost leadership strategies. It is positioned as a premium carrier with high levels of innovation and excellent levels of service, and has made a clear strategic choice of giving priority to profitability over size. For ‘full service’ airlines and service organizations in general, delivering excellent service always come at a cost. SIA on the other hand has managed to deliver premium service to some of the most demanding airline customers, who have sky-high expectations, at cost that are within the range of those of budget carriers.
With such an outstanding performance achieved in the airline industry; consistently delivering premium service to the customer and create a strong brand reputation over the decades. We would examine and analyze the competitive advantage which include the strategies adopt, the organization activity (design), organization structure as well as the challenges towards organizational changes to compete with the competitors. In the last portion, we will make recommendation to improve the whole system. 2.0 Competitive Advantages
As we have mentioned early, SIA have successfully gained the competitive advantage with adopted differentiation and cost leadership strategies together and sustained over the long term. The three main components (strategies, design, and structure) are interrelated and contribute the success of the overall in the organization. Any of the component that is poorly execute, will affect the progress in the future. Hence, in this chapter, I would like to start with a brief summary of the competitive advantage achieved in Singapore Airlines. Source: L. Heracleous, J. Wirtz / Journal of Air Transport Management xxx (2009) 1-6
Next I would like take a step further of zooming the elements that constitute to the success of leading Singapore Airlines of achieving the dual strategy. Above we have identify the elements of differentiation and cost leadership strategies, now we will identify the element of the five pillars of SIA’s cost-effective service excellence at Fig.1 which is the vital portion that support to gained the competitive advantage. The purple colour circle highlight the five pillars of the activity system (organisational design) are rigorous service design and development; total innovation (integrating continuous incremental improvements with discontinuous innovations), profit and cost consciousness ingrained in all employees, holistic staff development, and reaping of strategic synergies through related diversification and world-class infrastructure (Heracleous, 2009)....