Strategic Management and Leadership: Singapore Airlines - Case Study Example

STRATEGIC MANAGEMENT AND LEADERRSHIP: SINGAPORE AIRLINES NAME MODULE COURSE DATE STRATEGIC MANAGEMENT AND LEADERSHIP: SINGAPORE AIRLINES Introduction The identification of an organisation’s strategic decision is an important aspect of ensuring effective planning and development of the organisation. The process remains vital as a strategy influences the development of a clear understanding of the organisation’s position relating to both external and internal environments. The process encourages the development of effective planning for the future through proper identification of objectives, allocation of resources and creation of a project plan aimed at achieving the set objectives (Andersen, 2007). Through the conduction of a PESTLE analysis, the organisation can identify factors within (Internal factors) the organisation that affect operations and factors outside the organisation (external factors) (De Wit and Meyer, 2004). Conduction of a SWOT analysis enables the organisation to identify its strengths, weaknesses, opportunities and threats about internal and external environments of the organisation (White, 2004). Understanding the stipulated factors enables the organisation to understand the existent avenues to improve on to enhance elimination of potential threats. The process influences the provision of avenues that turn the organisation strengths into viable opportunities for further growth and development. The study seeks to identify the vision and strategy of Singapore Airlines through the analysis of the long-term financial and strategic investment of the company. The study seeks to develop a balanced scorecard for managerial use as it seeks to align the organization’s business activities to the organizational vision and strategy. The balanced scorecard will influence the monitoring of organizational performance through the development of a comparison against the strategic goals. Moreover, the study seeks to incorporate a strategy map that describes and elaborates on the essence of each element on the scorecard in enhancing achievement of organizational goals and targets. The process will provide a summary of the developed strategies as defined within the balanced scorecard. Upon identification of the above, the study seeks to provide recommendations to the based on the identified study through analysis of the balanced scorecard, PESTLE and SWOT analysis in enhancing effective performance management and monitoring. The study seeks to identify; The strategic position of Singapore Airlines through reference of conducted environmental audit Evaluation of organisation’s strategy regarding sustainability, acceptability and feasibility Development of recommendations on possible new strategic decisions Strategic Position For a company to achieve desired results for their respective objectives and goals, it remains essential for the company or firm to set out a clear formulation of strategic steps on how to achieve the stipulated goals effectively. Therefore, strategic planning involves the development of goals and decisions in a set manner with the main objective. The process seeks to achieve a desired goal in the long run by use of short-term steps and goals (Hunger and Wheelen, 2001). Setting short term goals remains effective as they help control of the future possibilities. The identification of the key possibilities of the future influences the identification of the existent market needs (Johnson et al. 2010). The process influences the identification of the company’s weaknesses, threats, and possible avenues that may be integrated to develop the existent strengths (Lynch, 2006). Strategic planning encompasses a conclusive study of the immediate external and internal environments surrounding the company or firm by conducting an effective environmental scan that incorporates SWOT and PESTLE analysis. Singapore Airlines Established on May 1, 1947, Singapore Airlines has developed into a prominent airline within the Asia-Pacific region. Singapore airlines limited identify a limited liability company established in the Republic of Singapore. The company remains listed on the Singapore exchange securities trading limited and remains a subsidiary of Temasek holding limited. The main activities of the group include passenger and cargo air transportation, the provision of engineering services, pilot training, air charters together with tour wholesaling. The airline seeks to develop its service and operations through the integration of different strategies aimed at developing its activities in the global markets. The company has influenced the development of a large network spanning six continents, which has expanded its reach and growth within the global market. Through the development of the Singapore Girl brand, the airline has sought to develop a strong strategy that places emphasis upon customer relationship management. The brand has propelled the company’s growth within the local and global markets. Through the continued integration of innovations, the airline has developed into a market leader as it enhanced the development of innovations that enhance the level of efficiency experienced by the customers (Singapore Airlines, 2014). Vision Singapore Airlines refer to a global company aimed at enhancing the provision of air transportation services of the highest quality together with maximizing returns for the benefit of the company shareholders and employees. Singapore airlines seek to develop its global network through increased flights to global destinations to enhance the development of the airline’s coverage. The company’s ultimate growth is to develop into one a renowned global airline. Also, the company seeks to ensure that it influences the provision of favourable profits that ensure the maintenance of the Company stakeholders (Singapore Airlines, 2015). Mission Statement Singapore Airlines identifies a global company dedicated to the provision of global air transportation services. The company services seek to maintain the highest levels of quality aimed at maximizing the identified returns for the benefit of the company shareholders and employees (Singapore Airlines, 2015). Company Values The company seeks to uphold and maintain the following values: The pursuit of excellence: The Company seeks to attain the highest professional standards through the provision of best quality of all the services offered. Safety: Safety identifies as a main element in all the company operations, and the company seeks to maintain the highest level of safety among the clients and staff Customer first: the company prides itself in the development of a satisfied customer base. The company maintains high levels of customer relation through the integration of a strong customer-relationship management system Concern for staff: the company places immense emphasis on the well-being and development of staff through the integration of regular training and development activities. Integrity: the company seeks to maintain high levels of fairness in the developed business and working processes Teamwork: the company places emphasis upon the importance of teamwork in the development of strong operational relationships The company has sought to maintain two main strategies that enhance the company’s competitive advantage within the market together with the development of a larger market share. Through the integration of the balanced scorecard, the company can effectively assess its operations within the market against the operations of the competitors in the industry. Through the integration of customer relationship management models, the company can develop a larger customer base and consequent market share. The process may be influenced by the identification of customer needs, and consequent provision of the market needs through the company products (Singapore Airlines, 2014). ENVIRONMENT ANALYSIS PESTLE ANALYSIS Political Singapore identifies a friendly country that incorporates open policies aimed at developing a conducive environment for the local and international companies. The main shareholder of Singapore Airlines is the government, which has influenced the provision of great support through the integration of reduced taxes and favorable fuel policies. However, some policies in existence influence the industry’s competitive capacity. For instance, through the integration of the deregulation policy concerning the airline industry, more airlines have been able to enter the industry in Singapore through the existence of low barriers to entry. Economic The economic health identified in a country influences the viability of business operations through the provision of favorable exchange rates, tariffs together with the tax and economic policies in place. The identification and analysis of these aspects remain vital in the market as they influence the customer needs together with the existent relationships between companies and suppliers together with the airline’s other partners. Singapore has experienced a continually growing economy, which provides the airline with a viable market to thrive. Also, through increased consumer demand, Singapore can cater to a larger market share, which influences the provision of the company services to the market. Through the identification of the government as the main shareholder, the airline can benefit from favourable policies directly affecting the industry such as the existent tax policy. Through the growth of an effective economy, the airline can benefit from the existent economies of scale, which influence the provision of favourable fuel prices within the market. Social-Cultural Factors The existent culture may present a company with threats and opportunities. The existent culture necessitates the integration of the customer beliefs, values, attitudes, opinions and lifestyle within the product offering. The process seeks to influence the development of customers trust within the company services and consequently influence brand growth in the market. Singapore identifies a multi-culture nation that incorporates the Malaysian, Indian and Chinese cultures. The cultural blend necessitates the integration of favourable strategies by the airline to ensure that it captures the entire market. Technological Factors The identification of technological innovations influences the provision of several opportunities to a company. However, in the event that the company is unable to tap into the existent technological developments, the competition acquires an added advantage. Lack of the necessary technology provides a threat to the company’s operational capability. In the airline industry, technological developments influence the majority of the operational processes as they enhance the existent levels of service delivery, which leads to increased levels of customer satisfaction. Singapore Airlines have integrated an operational strategy that has enhanced the identification of rapid adoption of relevant technologies within the industry as it provides the airline with a competitive advantage within the market. Through the integration of in-flight entertainment, the airline can meet the customer demands regarding the provision of high-quality entertainment. Through the integration of e-business strategies, the airline has been able to expand its customer base through increased customer accessibility and efficiency of company services as customers can purchase flight tickets online. The integration of information systems within the airline has been instrumental in the development of customer segments within the market, which has enhanced the development of services tailored to suit the particular markets. Environmental Factors In recent times, global warming has developed into a vital problem experienced by all countries and industries around the globe. The situation necessitates the integration of green processes within a firm’s operational process to enhance the sustainability efforts. Singapore has been recognized as one of the clearest nations in the world with the environmental factors identified as vital strategic components that influence the development of industries in the country. Singapore Airlines has continually sought to integrate processes that influence the development of the industries and aim at reducing the negative effect identified upon the environment. The company places emphasis on the maintenance of the green element within the integrated initiatives aimed at maintaining high levels of sustainable development. The process has enhanced the integration of a new fleet of aircraft, the A380, which is identified cleaner and greener in comparison to the Boeing 747 aircraft through the integration of per-seat analysis. Legal Factors Since the establishment of Singapore in 1965, the country has enhanced the integration of a favourable legal system. The system has influenced the development of a favourable economic environment attracting a large number of foreign investors into the country. Through the integration of different favourable laws such as the law of fair-trading, Singapore has enhanced the level of regulation experienced, which has enhanced the provision of numerous opportunities for the economy’s growth. In the aviation industry, Singapore has enhanced the development and consequent integration of a clear legal system that protects the interest of both the airline and the customers. The process necessitates the continuous review of the existent laws by Singapore airlines to ensure that the developed marketing strategies adhere to the stipulated processes through placing emphasis on passenger safety and carrier reliability. SWOT ANALYSIS Strengths Weaknesses Government support The existence of a durable hub in Singapore Large customer base Brand development High number of destinations High travel rates Heavy reliance upon international traffic High competition limiting existent market share Poor relations between the labor unions and management Opportunities Threats The expansion into more international locations The existence of potential markets including the Middle East, India and China Rapid growth in passenger and cargo air transport Rapid development of the technological environment that enhances operational efficiency Increasing levels of competition from new entrants into the market The integration of cheaper flight charges High fuel costs Restrictive regulation of air routes in international destinations Unfavorable tax policies in international locations VALUE CREATION Singapore airlines seek to maintain its growth in the market through the integration of several processes aimed at enhancing its position within the industry and the market. Through the integration of the customer-relationship management models, the company seeks to enhance the identification and provision of customer needs within the market. The process influences the development of a strong market share through the identification of an increase in customers. Through the integration of the balanced scorecard analysis, the airline can evaluate the industry through the identification of the existent competitors. The process influences the identification of the necessary measures to be incorporated to provide the airline with a competitive advantage and maintain its position in the market as the market leader. BALANCED SCORECARD The balanced scorecard identifies a comprehensive framework that translates the organizational strategic objectives into an integrative group of performance measures aimed at enhancing the organization’s performance and overall development (Bourne and Bourne, 2000). As identified by the organization’s vision, Singapore Airlines seeks to incorporate the customer, internal business, innovation and financial perspectives into enhancing the overall organizational goals. The process develops through the provision of services that cater to customer needs, development of internal business process such as a well-qualified staff. The process places emphasis on innovation through the incorporation of online purchasing and the financial perspective through enhanced sales that increase the profits and consequent revenues realized (Singapore Airlines, 2015). The company’s goals towards the consumers include increasing the customer base and ensuring that the organizational processes meet the changing needs of the customers. An increase in the number of customers is effectively measured by an increase in the company’s market share while meeting the needs of the consumer is measured by an increase in the company’s sales revenues. The company’s goals towards the internal business processes include the provision of a diverse product range and enhanced brand development. These goals are realized through their consequent measurement through identification of a decrease in the solvency ratio and an increase in the profit margins. The goals regarding the learning and growth perspective include enhancement of growth within the online sales, increased international trading profit and continued development of employee skills. These goals are identified through their measurements that identify an increase in online sales, continued investments in global and online stores that identify increased sales profits and an increase in operational efficiency and productivity. The financial goals regarding the financial perspective identify revenue growth, which is enhanced by an increase in non-current assets and an increase in profits, which is identified by a decrease in non-current liabilities. 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