This document was created by team Tie Breakers from University of Dhaka (Consisting of Kausar Ahmed Pranto, Muhammad Syfuddin Tamim, Sadman Mustafa Rahman) to participate in Gadjah Mada Business Case Competition.
This is a case analysis on Singapore Airlines where we considered Singapore Airlines and its subsidiaries such as Tiger Air and Scoot. The airlines was facing problem managing its muliti-brand strategy as it gradually moved from multibrand.
Howard schultz : building starbucks communitySaurabh Arora
Reason for success
Having well developed values, culture and charter
Willingness to move out of comfort zone – Introduces flavours of milk
Ensuring that the organisational culture is adhered to globally
Making changes and customising according to local culture
Providing employee benefits and making them feel a part of the family – ESOPs, Training
Conclusion
Howard Schultz’s vision has ensured that Starbucks has been a market leader
He revolutionized the coffee experience – From a regular to commodity to a third place experience
Having their own culture and innovative spirit has kept them ahead of their competitors
Recommendations
Starbucks must maintain the competitive advantage by keeping to its own distinctive culture
Listening and adapting to its customers and their needs
Adapting to localised cultures and developing a culture in each location that is apt
New products should be developed – Look beyond coffee to attract the Asian market
In August 2000, P&G introduced one of its kind product Crest Whitestrips, readily available online and through dentist offices
P&G claims that the new products are 10 times more effective than the Colgate Tartar Control Whitening Within two years P&G captured more than 80% of the share market. Colgate made a come back in August 2002 with Simply White. Colgate’s USP was that it focused on convenience and lower price. One month after introduction Simply White captures half the market with Crest Whitestrips losing 50% of its market share.
Toko Bunga Surabaya, Jual Karangan Bunga Surabaya, Jual Bunga Papan Surabaya, Jual Bunga Ucapan Surabaya, Jual Rangkaian Bunga Surabaya, Jual Buket Bunga Surabaya, Bunga Ucapan Selamat, Bunga Ucapan Duka Cita, Bunga Papan Selamat, Bunga Papan Duka Cita
A marketing Case Study of Natureview Farm, an organic yogurt manufacturer. This analysis was performed by E. Santhosh Kumar, IIT Madras, during an internship with Prof. Sameer Mathur, IIM Lucknow.
Howard schultz : building starbucks communitySaurabh Arora
Reason for success
Having well developed values, culture and charter
Willingness to move out of comfort zone – Introduces flavours of milk
Ensuring that the organisational culture is adhered to globally
Making changes and customising according to local culture
Providing employee benefits and making them feel a part of the family – ESOPs, Training
Conclusion
Howard Schultz’s vision has ensured that Starbucks has been a market leader
He revolutionized the coffee experience – From a regular to commodity to a third place experience
Having their own culture and innovative spirit has kept them ahead of their competitors
Recommendations
Starbucks must maintain the competitive advantage by keeping to its own distinctive culture
Listening and adapting to its customers and their needs
Adapting to localised cultures and developing a culture in each location that is apt
New products should be developed – Look beyond coffee to attract the Asian market
In August 2000, P&G introduced one of its kind product Crest Whitestrips, readily available online and through dentist offices
P&G claims that the new products are 10 times more effective than the Colgate Tartar Control Whitening Within two years P&G captured more than 80% of the share market. Colgate made a come back in August 2002 with Simply White. Colgate’s USP was that it focused on convenience and lower price. One month after introduction Simply White captures half the market with Crest Whitestrips losing 50% of its market share.
Toko Bunga Surabaya, Jual Karangan Bunga Surabaya, Jual Bunga Papan Surabaya, Jual Bunga Ucapan Surabaya, Jual Rangkaian Bunga Surabaya, Jual Buket Bunga Surabaya, Bunga Ucapan Selamat, Bunga Ucapan Duka Cita, Bunga Papan Selamat, Bunga Papan Duka Cita
A marketing Case Study of Natureview Farm, an organic yogurt manufacturer. This analysis was performed by E. Santhosh Kumar, IIT Madras, during an internship with Prof. Sameer Mathur, IIM Lucknow.
This is a lesson from a marketing course I teach for business admin. students. It analyzes the concept of segmentation using Nirmalys Kumar's 3Vs based on the book Value Merchants.
12Pricing and Distribution Model BMWThe Bayerische Mo.docxmoggdede
1
2
Pricing and Distribution Model: BMW
The Bayerische Motoren Werke (BMW) group is a leading Germany car manufacturer specializing in the production of automobiles and motorcycles (Wu, 2017). The company was founded in 1913 and since has diversified its operations into over 40 countries globally, with over one million employees distributed across its subsidiaries, depots, showrooms, and manufacturing plants. The organization’s business strategy based on its powerful brand image, with its core values being technology, innovation, quality, and reliability. The company has through the over one century that it has been in existence lived to the ideals of its vision strategy has modeled around identification of potential and growth encouragement (Byun, 2014) In this discussion we shall seek to establish the company’s distribution model and price setting mechanism.
BMW Distribution model
The BMW group has over 4, 400 dealers worldwide who are tasked with the selling new cars produced by the company, old cars, parts and even offering of after sale services (Li et al., 2014). The distribution channel adopted by the organization is meant to help align the organization’s operations with the customer needs, as the customers can place their orders, make inquiries and even give feedback on the various car models through the dealers, who directly submit the information to the company.
Distribution strategy
Companies according to Byun (2014) have to ensure their products reach the final customers in such a manner that the product is still affordable and of the expected quality. Over the years the BMW group like all other automobile manufacturers has mostly relied on the supply-push philosophy, where they manufactured the various vehicles models to a high supply with the expectation of pushing the product down the chain of demand through rigorous marketing. The company relied heavily on the traditional dealers to market their various brands and with the turbulent market economy pushing the conventional dealers to hike the prices and reduce the services offered to the customers.
The shrinking dealer margins made the dealers to impair the service quality provided to the clients, and this prompted the management of the BMW group to rethink their overall distribution strategy (Wu, 2017). The company through the decline in the sales margin and increased competition in the market opted to adopt the customized distribution strategy where the clients would be able to place orders and specifications on the various vehicle brands. The company would collaborate with its dealers to produce cars that are tailored and made to suit the customer needs. The group also has ingrained technology in its distribution process through the adoption of web-based services, easing the process of carrying out market surveys, tracking customers shopping habits as well as monitoring the dealers’ performance in real-time.
Positioning within the channel
The BMW group has through t ...
Service Positioning
After a service strategy has been identified, a company must decide how to position its product most effectively. The concept of positioning involves establishing a distinctive place in the minds of target customers relative to competing products.
In “The New Positioning: The Latest on the World's #1 Business Strategy”, Jack Trout distills the essence of positioning into the following four principles
1. A company must establish a position in the minds of its targeted customers.
2. The position should be singular, providing one simple and consistent message.
3. The position must set a company apart from its competitors.
4. A company cannot be all things to all people—it must focus its efforts.
Positioning and Marketing Strategy
Companies use positioning strategies to distinguish their services from competitors and to design communications that convey their desired position to customers and prospects in the chosen market segments. There are a number of different dimensions around which positioning strategies can be developed.
1
2
Understanding Target Market
BMW Company
BMW is a company based in Germany, and it was established in 1916 to make military aircraft. Later it switched to building automobiles dealing with multiple brands BMW, Rover, Rolls-Royce, and Mini. BMW acquired these additional brands beginning as early as 1994 until the present time. The company is still outstanding on the sale of high-class cars. The company promotes a culture of top performance and teamwork, which makes it be highly ranked. The company has set up two main goals: one of them is to remain profitable, and secondly, it’s to raise the long-term value of BMW. The company has focused on making it collaborations stable between its three brands. Also, it employs employees who can enhance the spirit of teamwork and ready to take risks. It is also planning on how they can make universal engines that can be used by different car models. (Kasi, 2010)
Regarding customer analysis, the target group of its products is the young audience. Different car models have different clients. The BMW targets people of 20-65 years of age, MINI targets people aged 25-45 years finally Rolls Royce targets individuals who are 40 years and above. Regarding gender, these automobiles target both male and females. These cars are associated with people who have a high income that is professionals and executives. By geographic, these cars are sold both locally and internationally and mostly in the urban areas. (Dudovskiy, 2016)
SWOT Analysis
This company has various strengths. One of them is that its cars are classic, comfortable and less fuel consumption. The cars are additionally safe because of the technology involved; this makes them more durable. They are also environmentally friendly. Out of this, they have a strong reputation that makes them be known all over the world. This particular company has successfully maintained its corporate social responsibility, and also it has a high recognition in China; this attracts them more customers, which help them achieve their targeted sales.
On the other end, the companies still have some weaknesses. One of them is that their cars are very costly which may imply that the customers may be few. It has a high-cost structure that in a way may make the brand name to be weaker in some market segments. Brand portfolio diversification is also a weakness to the company. The company also has some opportunities including, plans for expansion, increase the price of fuel.
Despite the BMW Company performing at its best, it still faces stiff competition from other companies that make classic cars, for example, Mercedes-Benz, Acura, and Lexus among others. This acts as a threat to BMW Company, but hard work and dedication are enough to ensure that it out does the competition. The decrease in prices of fuel, the rise in the price of raw materials and rise in euro exchange rate all pose a threat to the company.
PEST Analysis
The external environment also has a great impac ...
Mehta Soya: A Promotional Conundrum - VikalpaTushar G
Hi,
This case is really interesting and i hope you like it.. sorry for not keepin it open download..
Credits for TAPMI -
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Similar to Tie Breakers || GMBCC 2017 || Singapore Airlines: Premium Goes Multi-Brand (20)
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
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1. TIE BREAKERS
SINGAPORE AIRLINES: Premium
Goes Multi-Brand
kausarahmed03@gmail.com
Si
siyamsadman007@gmail.com
si
syfuddintamim@gmail.com
si
2. TIE BREAKERS
EXECUTIVE SUMMARY
The purpose of this report is to analyze the market scenario for the brands of Singapore Airlines
(SIA) group and recommend a suitable strategy to manage the multi-brand portfolio optimally.
Singapore Airlines used to be the table topper in the premium full service market. But recently,
the entire scenario has started to change ominously for the company. Right after entering low
cost carrier market, the company has been facing some difficulties in managing its 4 brands. But
it targets to be the best in both markets. Multi brand management has not been perfect for the
portfolio so far. That is why the positioning and differentiation of the brands are not strong and
clear in customer minds. Because of this core problem, the low cost brands have cannibalized on
the sales of the premium brands, finally resulting in revenue fall and brand dilution. In order to
solve this problem, the company is recommended to stop cross selling its 4 brands to prevent
brand dilution first. Then it can consider two alternatives: one providing overlapping routes and
the other not providing overlapping routes.
Based on the decision criteria, it is recommended to provide overlapping routes. Since the brands
will be positioned and differentiated according to their core attributes and cross selling will not
be practiced, brand dilution will be prevented. Besides, overlapping routes will serve different
customer segment demands i.e. premium and low cost. So, market share of both the markets
will rise, and so will the revenue. But if the company doesn’t provide overlapping routes,
potential revenue will decrease. Furthermore, it will make the company forgo the opportunity of
utilizing its resource fully. So, the opportunity cost will be high.
To implement the recommendation, in the development phase, Customer Experience
Management (CEM) will cater to each category of the brands separately and develop service
model and training module. In the execution phase, the premium brands will be positioned and
differentiated by a campaign ‘Your dreamy castle in the air’ to reflect the matchless service.
Besides, brand identity of low cost brands will be communicated by ‘Worth your every penny’
campaign. Furthermore, the new BuzzAviator program for SIA low cost brands will be introduced
apart from KrisFlyer to differentiate the brands. The low cost segment is promising in Southeast
Asian market and there the company will drop premium operation to avoid the risk of loss.
Premium and low cost brand employees will be entitled to TCS award separately. Total cost of
these activities will raise the total cost by 0.5941% and the entire plan will be implemented by
the end of FY2018-19. The contingency plan is to resume operation in Southeast Asian market if
economy boosts up there or else, shift to previously served premium markets.
In short, to protect the revenue from falling, reach the target of the company in different
markets, overturn the negative correlation between some variables of premium and low cost
brands, all the brands of the portfolio must be positioned and differentiated accordingly.
3. 1 | P a g e
TIE BREAKERS
SITUATION ANALYSIS
Singapore Airlines (SIA), the gold service provider in airlines, is facing stiff competition in new
dimensions from both the rapid growth of Southeast Asian low-cost carriers and the
expanding premium Gulf carriers (Exhibit 1). The company has four brands in its portfolio. But
there emerges some issues like brand dilution and market cannibalization (Exhibit 2). Now, it
is time to ponder over the plans to optimally manage the brands.
CORE PROBLEM
“Imperfect multi-brand management blurs differentiation point of the 4 brands in customer
minds.”
JUSTIFICATION OF CORE PROBLEM
It is the core problem because revenue fall, brand dilution and premium market
cannibalization are the results of blurred differentiations (Exhibit 3) caused by imperfect multi
brand management (Exhibit 4).
If no action is taken to solve this problem, SIA group will possibly face following scenarios:
Best Case: Acquisition of Tigerair will increase LCC market network offering.
Likely Case: Confusion regarding brand differentiations will be rising. Total revenue will drop
due to market cannibalization. Ultimately, SIA group will gradually be out of the competition.
Worst Case: Gulf carriers will take away maximum market share from SIA premium market.
Furthermore, the other LCC brands will also give a threatening competition. Hence, revenue
of both the markets will start falling drastically.
ALTERNATIVES
1. Operating the 4 brands providing overlapping routes without cross selling.
2. Operating the 4 brands providing no overlapping routes without cross selling.
(Exhibit 5).
Details of the alternatives are:
1. Operating the 4 Brands providing overlapping routes without cross selling:
More than one brand of SIA group, premium or low cost, will operate in the same route.
They will serve distinct market segments and position themselves according to their core
attributes. Cross selling the 4 brands will be stopped.
ADVANTAGES:
a) Serving both premium and economy segment: By operating premium and low-cost
brands in overlapping routes, SIA group will suit its products to different customer segment
demands.
b) Preventing brand dilution and market cannibalization: As cross selling will be stopped
and the products of each brand will be sold in different channels, confusion about the
brands will not rise in customer minds. Thus, brand dilution and market cannibalization
will be prevented.
4. 2 | P a g e
TIE BREAKERS
c) Ensuring brand differentiation and positioning: The customers will be able to
differentiate the brands because each brand will be positioned according to its core
attribute and serve different market segments using different sales channels.
DISADVANTAGES:
a) Reduced network offering: Without cross selling, it is not possible to provide combined
network offering by the 4 brands. Hence, total network offering will reduce.
b) Risk factor in South-East Asian market: Growth of low-cost market might affect
premium category alarmingly in South-East Asian market. So, operating premium brand
in this market will not be feasible in near future.
2. Operating the 4 brands providing no overlapping routes without cross-
selling: Only one category of brands, premium or low cost, will operate in a route. It will
serve distinct market segment in particular destinations and position itself according to its
core attribute. Cross selling the 4 brands will be stopped.
ADVANTAGES:
a) Strong differentiation base: As there will be only one type of brand operating in a
specific route, customers will very well be able to differentiate the brands.
b) Upholding Image of each brand: As brand operations will be very specific regarding the
markets and sales channel will also be different for each brand, confusion will not rise
in customer minds. Hence, brand image will be upheld and dilution will be prevented.
DISADVANTAGES:
a) Inability to serve all market segments: Since both premium and low-cost brands will
not operate in a specific route, it is not possible to meet all customer segment demands.
b) Alarming limitation on network offering: Stopping cross selling and overlapping routes
will make combined network offering by the brands impossible. So, the total network
offering will be limited to the 4 brands’ individual mutually exclusive destinations.
c) High opportunity cost: Full utilization of resources will not be possible since total
operations will be limited to specific routes and frequencies. So, the opportunity cost
will be very high.
RECOMMENDATION
Decision Criteria:
I. Market Cannibalization: A brand should not cannibalize the market of other brands in
the portfolio.
II. Brand Identity: Each of the 4 brands must be positioned and differentiated to prevent
brand dilution.
III. Market Share: Both premium & low cost market share should be increased.
IV. Revenue: The amount of revenue should be optimum and sustainable.
V. Opportunity Cost: Cost of forgoing resource utilizing opportunity should be minimum.
Recommended Alternative:
Alternative 1: Operating the 4 brands providing overlapping routes without cross selling.
5. 3 | P a g e
TIE BREAKERS
Justification:
Alternative 1 is recommended because it will revive individual brand identity through proper
differentiation and positioning. So, the confusion about the brands will be eliminated and will
prevent brand dilution. Clear individual brand identity in customer minds will prevent
cannibalization by one brand on the other in SIA portfolio. Differentiated brands will serve
the different customer segment demands in the same market and route. So, both premium
and low-cost market share will increase and generate more revenue. Operating the brands in
overlapping routes will ensure optimum utilization of resources. So, opportunity cost will be
minimum.
Alternative 2 is not recommended because it suggests operating only one type of brand,
premium or low-cost, in a market and route serving a specific customer segment. This totally
overlooks at least one customer segment which could be served. So, it reduces the total
potential market share and revenue. The opportunity cost will be very high since the
opportunity of fully utilizing resources has to be forgone due to not serving all the customer
segments and overlapping routes (Exhibit 6).
Goals and Objectives of the recommendation:
i. Differentiate the brands by their value propositions and establish as the best service
provider as per the expectations of the different customer segments within 1 year.
ii. Increase revenue by 13.50% (present revenue multiplied by 1.1350) by the end of FY
2018-19.
iii. Increase premium and low cost market share by 18% and 26% respectively by the end of
FY 2018-19. (present premium and low cost market share multiplied by 1.18 and 1.26
respectively)
IMPLEMENTATION PLAN
Activities needed to undertake to implement the recommendation are:
DEVELOPMENT PHASE:
1. Customer Experience Management (CEM) system for each brand: There will be two parts
in the CEM system, one for the low cost customers and the other for the premium
customers. So, it will be possible to provide and interpret the information for each brand
to serve as per the expectation of customers. The staff will collect information by engaging
with the customers and convey to the R&D department through logistics. R&D will process
the information and make adjustments. Logistics will update the whole system afterwards
(Exhibit 7).
2. Service model and training module improvement: Through CEM system, R&D and HR
department will work simultaneously to develop and operate service model and training
modules suitable for each brand. Desired level of service to the customers will be ensured.
EXECUTION PHASE:
1. Stop cross selling: SIA group sales department will stop cross selling its 4 brands and use
different sales channel for each.
6. 4 | P a g e
TIE BREAKERS
2. Introduce “BuzzAviator” program for low cost brands: Operating the KrisFlyer program
for all the brands interconnected will further dilute the brands. So, the marketing
department will keep the KrisFlyer program only for premium category and launch
BuzzAviator program for low cost brands.
3. Positioning & differentiation Strategy: As all the brands are going to operate separately,
they will have separate positioning and differentiation strategy as follows:
a) Positioning and differentiation strategy for premium category: SIA group marketing
department will target only the premium customers who prioritize service and time.
The positioning of the premium brands will be communicated through a campaign
named ‘Your dreamy castle in the air’ to make the target customers understands that
they will get matchless travelling services. Besides, KrisFlyer program will only be for the
premium customers. So, it will further strengthen the positioning and differentiation of
the premium brands.
b) Positioning and differentiation strategy for low cost category: SIA group marketing
department will target customers only who care for cost and time. The positioning of
the low cost brands will be communicated through a campaign named ‘Worth your
every penny’ to make the target customers understand that they will get the best out
of travelling expense. Besides, BuzzAviator program will be introduced for the low cost
customers. So, it will further strengthen the differentiation of low cost brands.
4. Only low cost brand operation in Southeast Asian market: Travel demands of Southeast
Asia are more price sensitive because of rising middle income class people. So, low cost
market is booming there and posing threat to premium brands increasingly. SIA group will
not operate premium brands in this market and focus only on low cost brands to capture
more market share. Vistara and NookScoot will also serve this market with SIA group
existing low cost brands.
5. Separate TCS Award: There will be TCS award for the employees of both premium and low
cost brands separately. It will ensure equitable treatment for the employees of the
different brands by the HR department (Exhibit 8).
Cost of the activities: Cost of the activities will increase the total cost of the group by
0.5941% (Exhibit 9).
Time frame of the activities: The development phase will occupy December, 2016 to
March, 2017 and the execution phase will occupy April, 2017 to March, 2019 for the short
term and continue in the long term (Exhibit 10).
Contingency Plan: If in the distant future, Southeast Asian economy boosts up, raising
premium segment demand, premium operation will be resumed. Otherwise, the premium
operation will be shifted to the recently dropped premium routes to keep pace with the
competition.
Measure of success and failure of the activities:
1. Necessary information from Customer Experience Management (CEM) system for each
brand will be available before the start of training sessions of the employees.
7. 5 | P a g e
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2. Service model and training module improvement will be reflected by the overall
satisfaction level, rating not below 9 out of 10.
3. Positioning and differentiation will bring the correlation between the sales of premium
and low cost brands close to zero. That means, the sales of any brand will not affect the
sales of the others. Market share has to be increased by 26% in the low cost market and
18% in the premium market.
4. Success of dropping premium brand operation in Southeast Asian market will be
reflected by additional market share grabbed by SIA group low cost brands.
5. TCS award will increase the motivation level of the employees of each brand.
6. The rate of points accrued in both KrisFlyer and BuzzAviator will reflect the success of
the separation.
Possible obstacles and ways to overcome:
1. Providing service in both premium and low cost segment as per the customer
expectation is a challenge. But information derived from CEM system for the separate
brands will make it easier to design the service model and train staff accordingly.
2. Because of stopping cross selling, total network offering will be lower. So, the challenge
is to maintain the level of turnover. But stopping it will prevent further brand dilution
and market cannibalization. That is why it will ultimately protect the gradual revenue
fall. Differentiated brands, with improved service model, will grab more market share
of the respective market segments. Hence, the level of turnover will very well be
maintained.
3. Having a sustainable position in Southeast Asian market after retreating from premium
brand operation is difficult. But low cost market is growing rapidly and becoming a
threat to premium segment. So, serving the premium segment will become
unprofitable. Also, differentiated low cost brands of SIA, with joint ventures in India and
Thailand, will bolster low cost service capacity. Ultimately, ruling with these low cost
brands will be possible.
FINANCIAL ANALYSIS
The revenue has fallen 5.90% in the last financial year after introducing low cost carriers
(Exhibit 11). Since differentiation among the brands were blurred,brand dilution emerged
and low cost brands cannibalized on the sales of the premium. Although the net profit
margin is good, for this gradual revenue fall, position in top tier airlines company list will
be lost. Besides, there is a negative correlation between the premium and low cost brand
category regarding Passenger-Yield (cents/km) (Exhibit 12). As it increases over the years
for the low cost brands, it decreases for the premium brand because market
characteristics changed. Regarding Average Breakeven Load Factor, there also exists a
negative correlation (Exhibit 13). It decreases over the year for low cost brands and
increases for premium brands. Changes in sales pattern across the market segments are
attributed for this.
So, overall, it reveals a continuous improvement for the low cost segment but
dissatisfactory results for the premium segment of SIA group. But proper differentiation
strategy and positioning as suggested can turn the condition into favor of SIA.
8. 6 | P a g e
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APPENDIX
Exhibit 1 4C Analysis
Source: Case information.
COMPANY COMPETITOR
COLLABORATORCUSTOMER
1. Internal Factors:
a) KSF: Service exclusivity in
premium service
b) Revenue stream: Increasing in
LCC and decreasing in South-
East Asian premium market.
2. External Factors:
a) Supply of airline services: Stable
in premium, excess in LCC.
b) Demand of airline services:
Stable in premium, growing in
LCC.
c) LCC market has risen from 6% to
30% in 8 years.
1. Premium and LCC market in
regional and long haul routes.
2. Customer’s preference is
unstable in economy segment.
3. Decision making process:
Involvement High Low
Their
choices are
made
Based
on
service
Based
on
price
1. Gulf Carriers, Air Asia
2. Aggressive moves:
a) Copying amenities
b) Govt. support
c) Geographical
advantage
d) Selling at
discounted price
1. Joint venture – Tata Sons, NokAir
2. Star Alliance with 28 global airlines.
Premium Low Cost
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Exhibit 2 SWOT Analysis
STRENGTH WEAKNESS
THREATSOPPORTUNITIES
1. Brand Reputation
2. Exclusive service model
3. Premium high tech airbus
4. Strong employee base for
customer management
5. Part of star alliance
1. High growth in LCC
market
2. Joint venture (TATA,
NokAir)
3. Increasing number of
destinations
4. Tigerairacquisition
1. Failing to differentiate
among the SIA, Tigerair
and Scoot in some cases
2. Long uncomfortable
economy flights
3. Comparatively high price
of ticket for premium
4. High airport and
overflying charge
5. Disadvantageous
geographical position
1. Aggressive competition
from Gulf carriers in
premium market
2. Increase in LCC
competition
3. Government patronage
to Gulf carriers provoking
unfair competition
4. Gulf carriers being in
geographical sweet spot
Source: Case information.
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Exhibit 3 Problem and causes identification from consumer minds perspective
PREMIUM
BRANDS
LOWCOST
BRANDS
BRAND DILUTION MARKET CANNIBALIZATION
LACK OF DIFFERENTIATION
IMPERFECT MULTIBRAND MANAGEMENT
Source: Case information.
KrisFlyer
Cross selling
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Exhibit 4 Core problem breakdown
Revenue fall Brand dilution Market cannibalization
Lack of differentiation among brands
IMPERFECT MULTIBRAND MANAGEMENT
Source: Case information.
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Exhibit 5 Alternative analysis matrix
WITH CROSS
SELLING
WITHOUT CROSS
SELLING
OVERLAPPINGROUTESNOOVERLAPPINGROUTES
Overlapping routes
without cross selling
Overlapping routes
with cross selling
No overlapping routes
with cross selling
No overlapping routes
without cross selling
To prevent
brand
dilution,
cross selling
will not be in
practice at
all
Source:Basedoncaseinformation.
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Exhibit 6 Alternative analysis based on decision criteria
MARKET CANNIBALIZATION
DECISION CRITERIA
ALTERNATIVE 01 ALTERNATIVE 02
BRAND IDENTITY
MARKET SHARE
REVENUE
OPPORTUNITY COST
*All the blocks reflect the level of strength of each alternative respective to each decisioncriteria
Source: Based on case information.
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Exhibit 7 Cyclical Customer Experience Management (CEM) System
Customer
Attendance (from HR Dept.)
LogisticR&D
Training Attendance
System
*to be performed for each brand category separately in one integrated
system
Source: Planned based on case
information.
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Exhibit 8 Assignation of responsibilities
R&D
1. Customer experience management
systemfor each brand
2. Service model improvement
3. Training module design for each
brand
MARKETING
1. KrisFlyer for premium brands and
BuzzAviator for LCC brands
2. Positioning and differentiation
creation
3. Southeast Asian market operation
decision by LCC
HUMAN RESOURCE
1. Implement different training module
2. TCS award for eachbrand category
LOGISTICS
1. Collecting and communicating the
information to and from CEM
2. KrisFlyer & BuzzAviator maintenance
Source: Planned based on case information.
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Exhibit 9 Cost of activities (SGD)
Cost of activities (SGD)
Purpose
% of Total Cost
Increased
Service model improvement
Staff Cost (Training) 0.00078
Inflight Meals and Other Passenger Cost 0.00063
TCS Award 0.000036
CEM Channels Management 0.000625
Positioning &Differentiation
"BuzzAviator" Program 0.00175
Positioning Campaigns 0.00212
Total 0.59410%
Source: Estimated from financial statement information of Singapore Airlines Singapore
Airlines Annual Report 2015–16, p. 54.
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Source: Estimated based on case information.
Exhibit 10 Activity Timeframe
DEVELOPMENT PHASE
Customer Experience Management (CEM)
systemfor each brand category
Service model and training module
improvement
EXECUTION PHASE
Stop cross selling
Introduce “BuzzAviator” program for low cost
brands
Positioning & differentiation strategy
Only low cost brand operation in South-East
Asian market
Separate TCS award
December, 2016 - March, 2017
April, 2017 - March, 2019
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Exhibit 11 Revenue Fall
Source: Singapore Airlines Annual Report 2015–16, pp. 216
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Exhibit 12 Passenger-Yield (cents/km) Correlation
Source: Calculated from financial statement information of Singapore Airlines Annual Report
2015–16, pp. 216–217 as depicted in a table below
Passenger-Yield (cents/km)
Year Scoot & Tiger Singapore Airlines
2014 12.4 11.2
2015 12.6 10.6
10.5
10.6
10.7
10.8
10.9
11
11.1
11.2
11.3
12.35 12.4 12.45 12.5 12.55 12.6 12.65
SingaporeAirlines
Scoot & Tiger
Passenger-Yield(cents/km) Correlation
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Exhibit 13 Breakeven Load Factor Correlation
Source: Calculated from financial statement information of Singapore Airlines Annual Report
2015–16, pp. 216–217 as depicted in a table below
Average Breakeven Load Factor (%)
Year Scoot & Tiger Singapore Airlines
2014 95.9 79.5
2015 83.4 80.2
79.4
79.5
79.6
79.7
79.8
79.9
80
80.1
80.2
80.3
82 84 86 88 90 92 94 96 98
SingaporeAirlines
Scoot & Tiger
BreakevenLoadFactor Correlation