A Competitive And Strategic Corporate Analysis Marketing Essay

A Competitive And Strategic Corporate Analysis Marketing Essay Introduction The airline industry is one of the most difficult business sectors where competition has proven to be extremely difficult among the many different competing airline services available around the world. Many airline services in the past have experienced disastrous business cycle, timeliness and overcapacity issues. Moreover, the different airline services also complain of their experienced difficulty in differentiating themselves from competition. These airline services also maintain such high-risk profiles because of such high expectations from their customers (Wirt, Heracleous Pangarkar, 2007). Singapore Airlines, one of the strongest and famous airline service providers, remains to be one of the most profitable airline companies in the world today. Several reasons can be attributed to the huge success that Singapore Airlines enjoys today. One is its strong brand management strategies driven mainly by its excellent line-up of top-management and boardroom employees. Singapore Airlines is composed of many dedicated and professional employees both in its front and back-end office who serve as the drivers of its solid brand strategy (Roll, M. 2010). Singapore Airlines is truly a global and diversified organization unified by one aim of delivering excellent quality and service to its customers. What separates this airline from other airline service companies is its heavy investment in building and maintaining its solid brand equity. The Singapore Airlines brand is known for its consistency in delivering its primary message to its consumers which is Singapore Airlines- A great way to fly coupled with its dedicated and honest delivery of that communication message to its consumers (Roll, M. 2010). The brand strategy of the Singapore Airlines is centered on its world-class in-flight experience: the warmth and hospitality of the Singapore Girl, its excellent service and its focus on the customer. Whereas other competing airline services also tried to pursue the path that Singapore Airlines has taken, no other airline has matched Singapore Airlines in terms of its honest commitment and consistency in delivering its brand promise to its consumers (Roll, M. 2010). As a result, the Singapore Airlines brand managed to deliver excellent financial results through its three-fold strategy: a.) Avoiding knee-jerk reactionary behaviors on any price changes and consistently deliver the brand benefits in order to maintain a high revenue b.) Cut down the costs by pursuing ownership of the best yet most cost-efficient aircrafts and properly responding to increases in fuel prices and c.) Remaining true to the brand in terms of consistency in delivering service to drive up profits (Roll, M. 2010). Background This report-based paper on the Competitive and Strategic Corporate Analysis of the Singapore Airlines aims to evaluate the Singapore Airlines actual application of the various analytical and planning tools in Strategic Management. This paper will also discuss the overall strategic posture of Singapore Airlines at the corporate level, that is, whether it is pursuing a global strategy, multi-domestic strategy, international strategy or transnational strategy. Also, this paper will also evaluate whether the companys management structure and philosophy is aligned with its overall strategic posture. Finally, this paper will come up with a list of recommendations with regard to the companys strategic focus. Several recommendations will be presented in order for the company to improve and maintain its competitive position. In order to achieve these objectives, the author of this paper will gather certain company documents such as its annual report in order to evaluate Singapore Airlines current financial position. Then the current growth efforts and focus of the company will be carefully looked into as well, that is, whether the company initiated some organizational and cultural changes in the past decade as part of its growth strategies. Major Sections A. To which extent does the annual report or other company documentation reflect the implicit or explicit  application of analytical and planning tools from the discipline of  strategic management? The 2009 Annual Report of Singapore Airlines reflected the overall financial performance of the company from the year 2008-2009. The financial report indicated a total of $1,062 million net profit which, based on the report, could have been higher and better if not for the global economic crisis that caused the airline to underperform financially on the last quarter of 2009 (SIA Annual Report 2008/09, 2010). Nevertheless, despite these financial challenges that the company experienced in the latter part of 2009, Singapore Airlines still continued to consistently deliver excellent products and services. It managed to build new lie-flat seats in the Business Class section which were designed for medium-haul and regional routes. It also managed to install iPod connectivity in some of its aircrafts (SIA Annual Report 2008/09, 2010). Moreover, the company remained its high focus on cost management to keep its balance sheet strongly stable. But instead of cutting costs when it comes to people development and management efforts, it kept investing on building and improving its internal infrastructures and systems as well as in developing and training its people (SIA Annual Report 2008/09, 2010). To a large extent, the annual report of the Singapore Airlines for 2009 explicitly reflected the various analytical and planning strategic management tools that the company utilized in order to achieve its organizational goals. For one, Singapore Airlines managed to analyze its own strengths and weaknesses vis-à  -vis its competitors and the top management keenly identified which value chain elements are important for the company and which ones are dispensable (Rigby, D. 2009). Despite the financial challenges the company experienced in 2009 such as the fuel price increases brought about by the economic crisis, the company remained true to its prudent fuel hedging strategy. As a result, the company incurred huge losses which the company regained immediately by implementing strict measures in cost management (SIA Annual Report 2008/09, 2010). Nevertheless, the company continued its focus on executing dynamic pricing strategies, providing more value-added promotions and packages which are still designed to earn the loyalty and trust of their customers. All these efforts, being at the core of the strategic management tools Singapore Airlines utilized, is what maintained the strong position of the company in the year 2009. B. Would you encourage the company to focus on growth efforts on emerging markets bearing in mind her organizaton culture and the changes that have occurred in the industry in the last decade? Yes. Singapore Airlines must redirect its growth efforts on emerging markets as it is already an established airline service brand, known around the world for its world-class products and services. In fact, today, this is the strategic route that Singapore Airlines must already be taking. According to Ng, M. (2010), the emerging markets in Asia, for instance, are expected to increase in terms of travel growth in the year 2010. There is a continuously growing opportunity for low-cost airline service brands to tap the increasing demand of emerging Asian markets for low-cost carriers. Given this demand, this is also an opportunity for Singapore Airlines to tap the travel opportunities of the emerging Asian market. In the past five years, the trend is increasingly shifting to practicability in travelling rather than luxury. In fact, the emerging markets need and demand is not really a luxurious means of travelling but more on a practical one, i.e., moving from one destination to another. At most, the needs of the consumers from the emerging markets are safety and comfort that is at par with other high-cost carriers. In tapping this huge number of consumers from the emerging market, Singapore Airlines can introduce its very first low-cost carrier carrying its brand name and its excellent service minus some consumer perks. C. How would you describe the companys strategic posture at the corporate level? Is it pursuing a global strategy, a multi-domestic strategy, an international strategy, or a transnational strategy? Based on the definition provided by Zwass, V. (1998) on what transnational strategy means, an organization which applies transnational strategy is focused both on its domestic/local and the global strategies. The strategies in the local or domestic level are directly tied in or in line with the overall global strategies of the entire organization. An organization which utilizes transnational strategy applies an integration of its global business activities with its domestic or local activities. Currently, the Singapore Airlines is not only focusing its efforts on its global strategies, specifically its vital strategies in maintaining its position in the international scene, but also in its local strategies. Furthermore, Singapore Airlines is also considered a transnational organization because of its consistent adaptation to various environmental and economic situations and its capitalization in knowledge and value-added information (Zwass, V. 1998). Singapore Airlines also entered into several strategic alliances with its suppliers, customers and some business partners like for instance, iPod connectivity which was recently installed in some airbuses of Singapore Airlines. This strategic partnership resulted to value-added services and additional competencies which served as the companys competitive edge versus its competitors. D. Does the companys management structure and philosophy aligned with her overall strategic posture? Singapore Airlines management structure and philosophy are closely aligned with the companys overall strategic posture. As defined by Zwass, V. (1998), transnational strategy is a specific management approach wherein the global business activities of the company are integrated with the domestic strategies. This management approach is applied through maintaining an interdependence and close cooperation with partners, subsidiaries and customers. Moreover, a transnational organization is highly collaborating with other independent, potential partner firms in order to deliver certain services and products in the market. This is what Singapore Airlines is continually trying to achieve when it comes to providing value-adding products and services into the market. For instance, Singapore Airlines is a partner of Star Alliance Network, in order to deliver certain perks and benefits to certain customers which availed of that service. Any Star Alliance Gold Member who rode in Singapore Airlines, will be granted a priority passage, priority waitlisting, priority check-in and boarding, priority airport standby and extra baggage allowance (Singapore Airlines, 2010). The different strategic alliances that the company engages in and the overall management structure that Singapore Airlines currently has is one proof that it is a certified transnational organization that is directly in line with achieving its corporate philosophy. E. Make specific recommendations for the company either to maintain her position or improve her position  without undermining the environmental changes and her competitive position. Singapore Airlines must maintain its current strategic posture, that is, its application of transnational strategies because that is the primary reason for its top position and market leadership in the airline industry. What separates Singapore Airlines from other directly competing airline companies is its responsiveness both in the international or global pressures and the demands of the local and domestic market. In order to improve its current position however, Singapore Airlines must continue to improve its current management structure and make it more flexible so that the facilitation and passing on of critical information from one unit to another is smooth-flowing. Also, Singapore Airlines must focus and redirect its growth efforts into eyeing and looking into other market expansion opportunities which provide them the opportunity to expand not only internationally but also domestically. One possible source of market expansion for Singapore Airlines is the increasing travel growth demand in emerging Asian markets. For the past years, Singapore Airlines has been focusing on tapping international markets in Europe but today, it must redirect its efforts into tapping other emerging markets which demand low-cost carriers. Conclusion Singapore Airlines remains to be one of the strongest and most profitable airline service providers in the world today because of a number of reasons. One is its strong brand management strategies mainly driven by its dedicated and professional employees both in its front and back-end office. Another reason is because of the companys unique management structure that is in line with the achievement of its corporate philosophy which is service excellence and consumer focus. The third and possibly the main reason for the companys huge success is its application of the transnational strategy. Defined as the specific management approach wherein the global business activities of the company are integrated with the domestic strategies, Singapore Airlines has so successfully utilized this strategy in order to gain strategic prominence in the airline industry. Because of Singapore Airlines application of this specific management approach, it gained a strong network of alliances and cooperative network of alliances from among various types partner firms, subsidiaries, and even suppliers. As a result of Singapore Airlines openness for collaboration and partnership with other independent firms and suppliers, it was able to successfully deliver certain services and products which became value-adding for their own customers. Merely responding to the needs of the global market is not enough to achieve strategic success and prominence today, without the aid and support of other independent firms and subsidiaries and forming strategic alliances with them, Singapore Airlines could not possibly make it as a truly global leader in the airline industry. Recommendations In order to retain the strong global position and market leadership of Singapore Airlines, the company must fully embrace its application of the transnational strategies. The fact that Singapore Airlines is a transnational organization was the primary reason for its top position and market leadership in the airline industry. Being the transnational organization that Singapore Airlines is now, it gave the company a broader strategic and competitive advantage compared to other directly competing airline service provider that is why it must retain and improve further its application of this specific management approach and strategy. First, Singapore Airlines must continue to improve its current management structure and transform it into a full-blown transnational organization consisting of flexible units/departments and subsidiaries in order to allow a smoother facilitation of critical information which is important for a company occupying the top position. Second, Singapore Airlines must focus and redirect its growth efforts into tapping other market opportunities not only internationally but also domestically. One possible source of this market expansion is the increasing travel growth demand in emerging Asian markets whose demand is centered on practicality over luxury travelling. In order to broaden its existing market, Singapore Airlines must offer low-cost carriers which would cater specifically to the growing and fast-emerging Asian market of travelers.