The document discusses Singapore Airlines (SIA), the national carrier of Singapore. It provides background on SIA, noting it was founded in 1972 and has grown to become one of the largest airlines in the world. SIA's mission is to provide high quality air transportation and maximize returns for shareholders and employees. The document then analyzes SIA's strategic management process, discussing its organizational structure, marketing capabilities, research and development, and past objectives and strategies. It also includes a SWOT analysis and recommendations. Key statistics show SIA is struggling to retain regular customers and suffered losses despite increasing customer numbers.

1. Strategic Management
Lab Assignment
Submitted By-
Shashwat Shankar
(IMB2018017)

2. Summary
Singapore Airlines is the national carrier of Singapore, which has an international presence, but
a focus on the Asian and Australasian markets. Founded in 1972, the Airline has grown and
consolidated its position over the last forty years to become one of the world’s largest and most
successful airlines, with an expansive and relatively young fleet of planes (Singapore Airlines,
2014). According to its published mission statement, “Singapore Airlines” is a global company
dedicated to providing air transportation services of the highest quality and to maximising
returns for the benefit of its shareholders and employees.”. But just how well placed is the
company to achieving its objectives?
A Singapore 5 Star airlines operates as the longest airlines and provides benefits across 30
countries. SilkAir (Singapore) Private Limited is a full service regional airline with its head
office in Airline House in Singapore; previously the head office was on the fifth storey of the
SIA Superhub in Singapore. It is a wholly owned subsidiary of Singapore Airlines and operates
scheduled passenger services from Singapore to 41 cities in 15 countries in Southeast Asia, the
Indian Subcontinent, East Asia and Australia.
Business Trend for Silkair
Singapore Airlines (SIA's) profits have dropped steadily over the last several years, driven by
intensifying competition and challenging market conditions. Profits were again down in the
quarter ending 30-Jun-2014 (1QFY2015), with the group recording a 52% drop in operating
profits to SGD39 million (USD31 million).
But SIA remains one of the most respected airlines in the world and has never incurred an annual
loss in its 42 year history. There is no denying SIA has faced in recent years - and continues to
face - its biggest ever challenges. But SIA has made several strategic adjustments since Goh
Choon Phong took over as CEO at the beginning of 2011.

3. Based on your observation,what are the strategic changes you think were made during that
period ? What additional changes in your view are still needed? Do statistics and numbers
reveal any key problem areas? How well the company is faring using the strategic
management process they have currently in place?
External Environment Analysis
● The government only influence the company by appointing director over the company.
The government also allowed SIA to stress on profit when compared to public or social
responsibility, the government supported the company for retrenchment practise during
economy crisis.
● Traditional values of the Chinese have strong influence on the working culture, this
converted to a culture high in power distance, and the lower level employee accepts the
subordinate level and seldom question management decision.The labour union in
Singapore are usually on good terms with the companies and the last open labour strike is
more than 20 years ago in 1986.
Marketing capability
● The company has also made good placement in search engine, when searching using
keyword 'Singapore Airline' and 'Singapore Air ticket', SIA had appear on top list,
however the domain address www.sia.com and www.sia.com.sg is not owned by SIA
which is an disadvantages.
● The company have spent lesser amount on marketing effort, shows the declining trend of
sales cost. In the year 2014, the sales cost is 5% of total expenditure. This is still a high
figure when compared with Qantas figure of 4.4% where as Cathay pacific had negligible
marketing cost.
Research and development capability
● The company had a strong financial background and are constantly improving on
in-flight entertainment and comfort.The company have also made plans to spend
11,800million on new aircraft over the next five year, this allows freedom to configure
cabin according to latest entertainment technology available for the new aircraft. This
provides opportunity to exploit new product
Organisational structure
● SIA have a flatten organisation chart with few levels of hierarchy within the organisation,
this allows autonomy and create a more flexible and dynamic business that empower
people to make decisions and leads to job enrichment. The company also promotes
independence and encourage senior staff to train and allow junior staff to make decisions.
● In general, the organisational structure of SIA is decentralise encourages autonomy
allowing quick response to business treat and opportunity which is crucial in the airline
industry which are very fast and dynamics.

4. Past objective and strategies
1. SIA had mainly using related diversification strategy.It used dual strategy of
differentiation and cost leadership, achieving cost effective service excellence by
exceptionally high business efficiency.
2. The company had achieved high business efficiency by implementing five organisational
activity systems. First, It have structured service design and development, allocate
dedicated department for its product design and run through countless testing to enable a
perfect quality on its final product meeting latest customer expectation.
3. It uses total innovation with dedicated department monitoring closely consumer trend in
the next five year, concentrating on slight improvement but over broad aspect, enabling a
cost effective yet highly productive innovation.
4. It cultivates a profit consciousness culture, educating employees on the importance of
profitability and strive balance between customer satisfaction and product offering are
gone through profit/cost analysis prior to launching.
5. The company also set up a system that rewards employees based on profitability inducing
peer pressure on wastage and encourage team works to boost its productivity.
6. The company achieve cost synergies through diversification and infrastructure of its
subsidiary. Vertical integration allows the company to have better quality control,
enhance knowledge and reduce cost at the same time.
7. The company also manage its subsidiary with clear expectations and allows its subsidiary
to subject to market discipline.
8. The company develop its staff holistically with rigorous interview and training, promotes
self direct continuous learning to boost self esteem. This had made the company
competence in the ability to achieve a differentiated offering with exceptional levels of
efficiency.
Figure 1

5. Figure 2
Figure 1 tells us about that SIA is unable to convert its regular travelling customers to fly
frequently using the airlines.As in figure 2 we see that the customers are increasing in numbers
then also they are suffering from the loss.
Figure 3
This has to my context that Figure 3 could be the reason that the company would have suffered a
loss or the growth was not seen in the company.

6. SWOT ANALYSIS
Strengths
1. Premium product and brand
2. Multi-brand model (including Scoot
and SilkAir)
3. Europe market strength
4. Australia/South Pacific market
strength
5. The Singapore Changi hub is a
premium facility
6. SIA has been profitable for every year
it has operated.
Weaknesses
1. Joint ventures have always been a
weak point
2. Strategy is still incomplete and
difficult to engineer
3. Difficult market to access
Opportunities
1. Partnerships can be expanded
2. Premium economy product should
boost competitiveness
3. Unique growth promise
4. Long-haul low-cost operations can
become core to long term evolution
Threats
1. Competition from Gulf carriers
2. Increased competition for premium
traffic
3. Rival are gaining strength
Recommendation
STRENGTH - OPPORTUNITY
● Using Singapore's government
connection and SIA brands and
reputation, explore new market in
countries with potential demand
● Having able to be flexible on
operation, the company can divert low
profitability route to country that are
out of financial crisis.
WEAKNESS - OPPORTUNITY
● Using strong R&D resources, review
and develop a marketing campaign
using the internet, this can bring down
the marketing cost also.
● Having relied heavily on long haul
flight and premium class for revenue,
company can program to promote its
brands on the event's boosting market
share in this segment.
STRENGTH - TREAT
● Having good service oriented culture
and highly competent front line staff,
it is possible to foster relationships
with passenger through personalized
service; reduce down the effect of
commoditising and crease
differentiation.
WEAKNESS - TREAT
● Having a slow growth rate, the
company can maintain its position
even in fierce competition avoiding
price war as it does not needs to
quickly expand its market share.
● Having excess aircraft, the company
can consider selling it off to low cost

7. ● Having excess reserves and strong
financial background, the airline can
look into investing in video
conferencing business, diversifying its
risk.
carrier that is expanding its route and
in needs to increase fleet.
SIA is in a tough spot but still in a relatively good position compared to other full-service airline
groups in Southeast Asia. SIA has remained the most profitable flag carrier in Southeast Asia
and has a strong balance sheet while some key competitors in the region are now looking to
restructure and recapitalise.The short-term outlook remains bleak but SIA has opportunities to
improve its position over the medium to long term. It is now responding to several of these
opportunities as part of its new strategy. But it has always been a relatively conservative airline,
where fundamental change came only slowly and it will take time – likely a couple of years – for
there to be any tangible results. In Asia's aviation washing machine there are risks and challenges
that can throw any new business plan off course.