TABLE OF CONTENT
WITH REFERENCE TO OPERATIONS MANAGEMENT ONLY, DISCUSS HOW SIA MIGHT DEVELOP IN THE FUTURE IN ORDER TO REMAIN COMPETITIVE.
CRITICAL SUCCESS FACTORS OF SINGAPORE AIRLINES
COMPETITIVE ADVANTAGE STRATEGIES (PORTER’S)
ANSOFF’S PRODUCT/MARKET GRID
With reference to Operations Management only, discuss how SIA might develop in the future in order to remain competitive.
The airline industry is an exclusive and fascinating industry. The reach and impact of the industry to a wider population of the global market, and the glamour associated with it, has captured the interest of the world and has made the industry a well studied one. In 1994, the British Airways Chairman, Sir Colin Marshall called the aviation industry, “the flywheel for the engine of the worlds industry” (Chan, 2000a).
The figures of the industry are massive, and justify these comments. According to the Corporate Location Journal 1994 (p.15), the industry was worth over $ 1,000 billion (directly, indirectly and induced), employs 22 million people and transports and services over 1.25 billion passengers a year. A quarter of the world’s manufactured exports by value reach their markets by air. The industry is also at the heart of the travel and tourism, the world’s largest industry, employing one in nine workers.
Critical Success Factors of Singapore Airlines
Critical Success Factor’s (CSF) are those essential areas of activities that must be preformed well if the mission, objectives or goals of a business are to be achieved. The concept of CSF’s was developed by D. Ronald Daniel of McKinsey and Company "Management Information Crisis," Harvard Business Review, Sept.-Oct., 1961 who defined CSF’s as “The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish”. (Source: http://www.mindtools .com/pages/article/newLDR_80.htm).
Given the importance of these Critical Success Factors, Singapore Airlines would have to maintain their CSF’s in the future in order to remain ahead of the competition in the ultra-competitive environment of the global aviation industry. Below are the identified CSF’s of Singapore Airlines:
The Singapore Girl has become the airline industry icon of service which has led to SIA being the aviation industry’s strategic benchmark. The Singapore Girl is the essence of their Product/Service Differentiation strategy, and can be named as one of the most important CSF’s for SIA. SIA is strategically positioned in the premium service, quality and value market segment of the international airline industry. Service is the raison d’être of SIA, and at the heart of its service reputation is the Singapore Girl (Chan, 2000b).
A distinct competitive advantage has been gained by SIA through the use of the Singapore Girl as its brand image. It had been introduced more than 25 years back, and today more than just being a passing phase it has become even more popular and entrenched in the minds of the world airline industry. Indeed it is an extraordinary and singular success story for an airline product/service differentiation strategy. No other airline can boast of such a product/service differentiation strategy that has lasted for more than 25 years, and still shows no signs of letting up (Chan, 2000b).
It has to be noted that Singapore Airlines has backed up the brand promise of the Singapore Girl by carrying out its world class service consistently by providing exceptional value and premium service to its passengers. 1.2.2
"Asian Air hubs fight for supremacy", Corporate Location Journal, pp.15. (1994). In: Chan, D., (2000).The Development of the airline industry from 1978-1998- A strategic global overview. Journal of Management Development, Volume 19, No 6, 2000. (pp. 489-514).
Chan, D., (2000a).The Development of the airline industry from 1978-1998- A strategic global overview. Journal of Management Development, Volume 19, No 6, 2000. (pp. 489-514).
Chan, D., (2000b). Beyond Singapore Girl-Grand and product/service differentiation strategies in the new millennium. Journal of Management Development, Volume 19, No 6, 2000. (pp. 515-542).
Ramaswamay, K., (2001). Singapore Airlines: Strategy with a Smile. Thunderbird, American Graduate School of International Management.
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