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Singapore Airlines Balancing Act

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Its a presentation made based on the HBR Article Singapore Airlines Balancing Act published in July August 2010 issue. Its a template created based on which the IIBM Patna PGDM students will present …

Its a presentation made based on the HBR Article Singapore Airlines Balancing Act published in July August 2010 issue. Its a template created based on which the IIBM Patna PGDM students will present the article discussion in their weekly class.

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  • 1. Singapore AirlinesBalancing ActHARVARD BUSINESS REVIEW – JULY AUGUST 2010
  • 2. 2 SIA Winner of Best Airlines Awards 21times winner of World’s Best Airlines Award from Conde Nast Traveler.3 times winner of Skytrax’s Airline of the Year.Singapore Airlines Balancing Act - HBR July 2010 - Report byRohit Singh, IIBM Patna
  • 3. SIA is the Most Cost Effective 3 Operator Cost Per Available Seat Kilometres in Cents 10 8 6 European Airlines, 10 US Airlines, 8 4 Asian Airlines, 6 Singapore Airlines, 4.58 2 0 Singapore Airlines European Airlines US Airlines Asian Airlines Cost Per Available Seat Kilometres * Data is based on study by 2007 International Air Transport AssociationSingapore Airlines Balancing Act - HBR July 2010 - Report byRohit Singh, IIBM Patna
  • 4. 4 Successfully executes Dual Strategies  SIA offers World Class Service and at the same time is a Cost Leader.  Airlines has never posted loss since its founding in 1972.  SIA executes Dual Strategies successfully by managing: Providing Service Excellence cost- Innovating in both centralized and effectively de-centralized manner Being a technology leader and a Achieving Standardization and follower Personalization in its processesSingapore Airlines Balancing Act - HBR July 2010 - Report byRohit Singh, IIBM Patna
  • 5. Achieving Service Excellence Cost- 5 Effectively SIA manages its two main assets – planes and people. SIA Spends more than its rivals in key And it spends less, partly as a areas: consequence, on: Buying new aircraft Price per aircraft Depreciating aircraft Fuel maintenance and repair Training Salaries Labor costs on flights Sales and administration Innovation Back office technologiesSingapore Airlines Balancing Act - HBR July 2010 - Report byRohit Singh, IIBM Patna
  • 6. Fostering both Centralized and 6 Decentralized Innovation  Serial Innovator by bringing many Firsts to the Civil aviation.  Follows a 4-3-3 rule of spending: 40% on training, 30% on revising processes and 30% on creating new products & services each year  Product Innovation Department (PID) follows a highly structured process.  SIA fosters the idea that employees especially those in customer facing functions must innovate if SIA is to stay ahead.  It focuses on incremental innovation in most areas because the overall experience matters most.Singapore Airlines Balancing Act - HBR July 2010 - Report byRohit Singh, IIBM Patna
  • 7. Being both Technology Leader and 7 Follower  Unlike many market leaders, SIA engages in small improvements in functions that don’t touch the customer.  SIA introduced technological break through to save costs.  SIA being pragmatic innovator also withdrew services which customer’s don’t like or cause problems.  In 2004, SIA outsourced many of its IT functions so it could focus on its core business.Singapore Airlines Balancing Act - HBR July 2010 - Report byRohit Singh, IIBM Patna
  • 8. 8 Using Standardization for Personalization  Airlines institutionalizes personalization by creating a service culture through recruitment, training and rewards.  Crew Members gets access to personal information viz. name, birthday from CRM for bringing delight to customer experience.  SIA’s training programs such as Transforming Customer Service teach cabin crews how to anticipate customer needs.  SIA carry more crew members than competitors but these crews help the airline provide unmatched service.Singapore Airlines Balancing Act - HBR July 2010 - Report byRohit Singh, IIBM Patna
  • 9. 9 The How-To of Dual Strategies  Harness the power of your people and culture.  Make good use of technology.  Utilize the power of business ecosystems.  Make investment decisions strategically.Singapore Airlines Balancing Act - HBR July 2010 - Report byRohit Singh, IIBM Patna
  • 10. 10 Q&ASingapore Airlines Balancing Act - HBR July 2010 - Report byRohit Singh, IIBM Patna