Strategic Management

Topics: Singapore Airlines, Airline, Malaysia Airlines Pages: 28 (7595 words) Published: December 12, 2012


1.1 PEST Analysis

PEST analysis is use extensively to organize the result of environmental scanning. The theory is believed to be originated in the 1980s with various author included variations of the taxonomy classifications in a variety of orders: PEST, PESTLE, STEEPLE etc [Morrison, 2009]. PEST stands for Political, Economic, Social and Technology. The Extended forms of PESTLE have further includes Legal and Environment. Another version of STEEPLE has further extended to include Ethical or Education and some even extended it to STEEPLED which includes demographic. It is important to understand the key drivers of change on these factors and the differential impact of these external influences and drivers have on particular industries of interest [Johnson, Kevan and Richard 2007].

1.2 SWOT Analysis

The SWOT analysis concept is originated from SOFT analysis introduced by Albert Humphrey with original goal to study corporate planning. SOFT is the acronyms for Satisfactory, Opportunity, Fault and Threat. Urick and Orr introduce SWOT analysis in 1964 during a seminar in Long Range Planning changing Satisfaction and Fault into Strength and Weakness [Morrison 2009]. Opportunity and Threat are factors external to the organisation, PEST analysis is often perform for this purposes. Strength and Weakness are factor internal to the organisation, it is often done by analysing the organisation's financial position, product position, marketing capability, research and development capability, organisational structure, human resources, facilities/equipments and past objective and strategy [Thames Business School, P63].

1.3 Porter's Five Forces

Porter's five forces are developed by Michael E. Porter during 1979 as a framework to analyze industry and business strategy [Wikipedia, 2008]. The five forces includes threat of new entrants, rivalry among existing firms, threat of a substitute products or services, bargaining power of buyers and bargaining power of suppliers. Freeman recommends a sixth force: Relative power of other stakeholders, being added to Porter's original five forces [Thames Business School, P61]. This analysis if often uses to evaluate an organisation's competitive strength and its position in the industry.

2.0 company Introduction

Singapore airlines were originated from Malayan Airway Limited where the company started it business on year 1947. Due to political reason, the company was renamed Malaysian Airways, Malaysia-Singapore Airlines and finally split to Singapore Airlines and Malaysia Airlines System in 1972. Singapore Airlines is owned by Temasek Holding which is a state owned investment house. 

With no domestic route available after the separation, Singapore airline have been force to rely solely on international market, which subjected to heavy competition. The tough start created a driving spirit to compete and also a dedication to branding. The airlines have began its branding strategy on it in-flight service, the company engaged French haute-couture designer Pierre Balmain in 1972 to design a special version of the Malay sarong kebaya as the airline stewardess uniform and then is brand "Singapore Girls" for providing excellent in-flight hospitality. This later becomes one of the most recognized signatures of the airlines [Roll, undated]. 

The marketing strategy was accompany by background lobbying effort to talk country in granting access to its airport and dedication to its human resource management by investing 20million on training facilities. This was paid off at 1973 when the airline was ranked third in the Far East Asian region. The company then are force to conduct cost cutting program to struggle with surge of oil price on 1973~1977. Surviving this, in 1977 the airlines joint operation with British Airway to provide Concord jet service between Singapore and London, the service was terminated in 1980. This however was...
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