Singapore Airlines Analysis
SINGAPORE INTERNATIONAL AIRLINES
Air travel remains a large and growing industry. Despite being plagued by several factors such as overcapacity, commoditization of offerings and cutthroat rivalry to name a few, it facilitates economic growth, world trade, international investment and tourism.
This case study will analyze the external factors affecting the airline industry, analyze the internal factors affecting Singapore International Airlines (SIA) and critically discuss the different generic strategies in the airline industry as well as the dual strategy adopted by SIA.
External Analysis for SIA
SIA’s macro environment is the wider context in which the airline industry exists. Due to the fact that SIA operates in an international market, its operations are generally more complex and face higher levels of risk. The PEST analysis below provides a method of understanding the macro environment which SIA has practically no control or influence over but in fact have significant impacts on both SIA and its micro environment.
| FACTORS | +/- | Political-Legal | Deregulation of the airline industryThis has enabled new entrants into the growing budget airline market | - | Economic | Rising fuel prices This has an impact on the profitability of airline operations | - | Socio-Cultural | Security concernsAs a result of the terrorist attack on September 11, 2001 passengers have become increasingly concerned about their safetyHealth concernsRecent epidemics of diseases like SARS and bird flu have created a reluctance to fly | -- | Technological | Development of the internetThis has provided disintermediation; with e-ticketing services, the need of a middle man is now reduced as airlines are now able to sell their own services on their websitesDevelopment of the Boeing 777-200LRThis new aircraft is capable of flying 17,500km thus allowing long haul flights which increases the routes available to passengers | ++ |
Internal Analysis for SIA
SIA’s micro
Air travel remains a large and growing industry. Despite being plagued by several factors such as overcapacity, commoditization of offerings and cutthroat rivalry to name a few, it facilitates economic growth, world trade, international investment and tourism.
This case study will analyze the external factors affecting the airline industry, analyze the internal factors affecting Singapore International Airlines (SIA) and critically discuss the different generic strategies in the airline industry as well as the dual strategy adopted by SIA.
External Analysis for SIA
SIA’s macro environment is the wider context in which the airline industry exists. Due to the fact that SIA operates in an international market, its operations are generally more complex and face higher levels of risk. The PEST analysis below provides a method of understanding the macro environment which SIA has practically no control or influence over but in fact have significant impacts on both SIA and its micro environment.
| FACTORS | +/- | Political-Legal | Deregulation of the airline industryThis has enabled new entrants into the growing budget airline market | - | Economic | Rising fuel prices This has an impact on the profitability of airline operations | - | Socio-Cultural | Security concernsAs a result of the terrorist attack on September 11, 2001 passengers have become increasingly concerned about their safetyHealth concernsRecent epidemics of diseases like SARS and bird flu have created a reluctance to fly | -- | Technological | Development of the internetThis has provided disintermediation; with e-ticketing services, the need of a middle man is now reduced as airlines are now able to sell their own services on their websitesDevelopment of the Boeing 777-200LRThis new aircraft is capable of flying 17,500km thus allowing long haul flights which increases the routes available to passengers | ++ |
Internal Analysis for SIA
SIA’s micro