Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times
From 2001 to 2003, Singapore International Airlines (SIA) faced triple disasters: the 9/11 terrorist attacks, SARS epidemic and the Iraq war, which forced it to reduce capacity, reform and restructure its wages. Having managed costs like a tight ship, SIA found it difficult to negotiate wage restructuring and retrenchments with its unions. Operating in a rigid regulatory and business environment, the SIA management found it challenging to tweak the seniority-based wage system, and migrate to a more flexible and competitive compensation structure. With lower yield, high-cost branding and intense competition from the full-service global and low-cost carriers, the SIA management explored ways to balance its strategic elements, attain flexibility and sustain wage and cost competitiveness to earn double-digit returns for its shareholders.
Swot Analysis of "Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times" written by D.G. Allampalli, Hesan Ahmad Quazi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sia Wage facing as an external strategic factors. Some of the topics covered in Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times case study are - Strategic Management Strategies, International business, Personnel policies, Reorganization, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, there is backlash against globalization, talent flight as more people leaving formal jobs, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing energy prices,
digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sia Wage, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sia Wage operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times can be done for the following purposes –
1. Strategic planning using facts provided in Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times case study
2. Improving business portfolio management of Sia Wage
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sia Wage
Strengths Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sia Wage in Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Sia Wage digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sia Wage has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Sia Wage has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Sia Wage are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Sia Wage in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Sia Wage in the sector have low bargaining power. Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sia Wage to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Sia Wage has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Sia Wage has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Sia Wage
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sia Wage does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Sia Wage is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times firm has clearly differentiated products in the market place. This has enabled Sia Wage to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Sia Wage to invest into research and development (R&D) and innovation.
High brand equity
– Sia Wage has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sia Wage to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times are -
High bargaining power of channel partners
– Because of the regulatory requirements, D.G. Allampalli, Hesan Ahmad Quazi suggests that, Sia Wage is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times, is just above the industry average. Sia Wage needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Sia Wage is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Sia Wage needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sia Wage to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Sia Wage has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Sia Wage has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Sia Wage even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Sia Wage has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Sia Wage needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Sia Wage has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sia Wage is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sia Wage 's lucrative customers.
Opportunities Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times are -
Creating value in data economy
– The success of analytics program of Sia Wage has opened avenues for new revenue streams for the organization in the industry. This can help Sia Wage to build a more holistic ecosystem as suggested in the Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times case study. Sia Wage can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sia Wage in the consumer business. Now Sia Wage can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Sia Wage to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sia Wage can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Sia Wage can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Sia Wage can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sia Wage can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Sia Wage has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sia Wage to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sia Wage can use these opportunities to build new business models that can help the communities that Sia Wage operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Sia Wage can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sia Wage can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Sia Wage can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Sia Wage can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at Sia Wage can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Threats Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sia Wage with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sia Wage can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times .
Regulatory challenges
– Sia Wage needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Consumer confidence and its impact on Sia Wage demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Sia Wage can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Sia Wage is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Sia Wage in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sia Wage in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Sia Wage needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Sia Wage can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Sia Wage high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Sia Wage needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Singapore International Airlines - Moving to a Flexi-Wage System during Volatile Times is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Sia Wage needs to make to build a sustainable competitive advantage.
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