Tiger Airways: Buyout Offer from Singapore International Airlines SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tiger Airways: Buyout Offer from Singapore International Airlines
In January of 2016, Singapore International Airlines Group (SIA) announced that it had secured more than 90 per cent stake in Tiger Airways Holdings Limited (Tigerair), and would take Tigerair private. Once the buyout offer closed on February 19, trading in Tigerair's shares would be suspended because the free float had fallen below the minimum 10 per cent threshold. Tigerair had been suffering losses amounting to more than SG$600 million from 2012 to 2015. When SIA initiated the buyout offer, Tigerair's shareholders wanted to use the discounted cash flow model, the discounted dividend model, and relative valuation to determine whether the buyout was a fair deal. Ruth S.K. Tan, Zsuzsa R. Huszar and Weina Zhang are affiliated with National University of Singapore.
Authors :: Ruth S.K. Tan, Zsuzsa R. Huszar, Weina Zhang
Swot Analysis of "Tiger Airways: Buyout Offer from Singapore International Airlines" written by Ruth S.K. Tan, Zsuzsa R. Huszar, Weina Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tigerair Buyout facing as an external strategic factors. Some of the topics covered in Tiger Airways: Buyout Offer from Singapore International Airlines case study are - Strategic Management Strategies, Financial analysis and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Tiger Airways: Buyout Offer from Singapore International Airlines casestudy better are - – increasing energy prices, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, wage bills are increasing, technology disruption, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Tiger Airways: Buyout Offer from Singapore International Airlines
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tiger Airways: Buyout Offer from Singapore International Airlines case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tigerair Buyout, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tigerair Buyout 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 Tiger Airways: Buyout Offer from Singapore International Airlines can be done for the following purposes –
1. Strategic planning using facts provided in Tiger Airways: Buyout Offer from Singapore International Airlines case study
2. Improving business portfolio management of Tigerair Buyout
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tigerair Buyout
Strengths Tiger Airways: Buyout Offer from Singapore International Airlines | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tigerair Buyout in Tiger Airways: Buyout Offer from Singapore International Airlines Harvard Business Review case study are -
Successful track record of launching new products
– Tigerair Buyout has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tigerair Buyout has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Tigerair Buyout 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 Tigerair Buyout 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.
Effective Research and Development (R&D)
– Tigerair Buyout 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 Tiger Airways: Buyout Offer from Singapore International Airlines - 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 Tigerair Buyout
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tigerair Buyout does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Tigerair Buyout is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Tigerair Buyout is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tiger Airways: Buyout Offer from Singapore International Airlines Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Tigerair Buyout is one of the leading recruiters in the industry. Managers in the Tiger Airways: Buyout Offer from Singapore International Airlines are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Tiger Airways: Buyout Offer from Singapore International Airlines 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.
Highly skilled collaborators
– Tigerair Buyout 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 Tiger Airways: Buyout Offer from Singapore International Airlines HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Tigerair Buyout in the sector have low bargaining power. Tiger Airways: Buyout Offer from Singapore International Airlines has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tigerair Buyout to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Tigerair Buyout has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tiger Airways: Buyout Offer from Singapore International Airlines Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Tigerair Buyout is present in almost all the verticals within the industry. This has provided firm in Tiger Airways: Buyout Offer from Singapore International Airlines case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Tiger Airways: Buyout Offer from Singapore International Airlines | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tiger Airways: Buyout Offer from Singapore International Airlines are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tigerair Buyout is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tiger Airways: Buyout Offer from Singapore International Airlines can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Tiger Airways: Buyout Offer from Singapore International Airlines HBR case study mentions - Tigerair Buyout takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Tigerair Buyout 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. Tigerair Buyout 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.
Need for greater diversity
– Tigerair Buyout has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Tigerair Buyout supply chain. Even after few cautionary changes mentioned in the HBR case study - Tiger Airways: Buyout Offer from Singapore International Airlines, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tigerair Buyout vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Tigerair Buyout 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.
Low market penetration in new markets
– Outside its home market of Tigerair Buyout, firm in the HBR case study Tiger Airways: Buyout Offer from Singapore International Airlines needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tiger Airways: Buyout Offer from Singapore International Airlines, in the dynamic environment Tigerair Buyout has struggled to respond to the nimble upstart competition. Tigerair Buyout has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Tigerair Buyout has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Tigerair Buyout 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.
Aligning sales with marketing
– It come across in the case study Tiger Airways: Buyout Offer from Singapore International Airlines that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Tiger Airways: Buyout Offer from Singapore International Airlines can leverage the sales team experience to cultivate customer relationships as Tigerair Buyout is planning to shift buying processes online.
Opportunities Tiger Airways: Buyout Offer from Singapore International Airlines | 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 Tiger Airways: Buyout Offer from Singapore International Airlines are -
Learning at scale
– Online learning technologies has now opened space for Tigerair Buyout to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tigerair Buyout is facing challenges because of the dominance of functional experts in the organization. Tiger Airways: Buyout Offer from Singapore International Airlines case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Tigerair Buyout has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tigerair Buyout 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. Tigerair Buyout 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tigerair Buyout can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 Tigerair Buyout in the consumer business. Now Tigerair Buyout can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tigerair Buyout 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, Tiger Airways: Buyout Offer from Singapore International Airlines, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Tigerair Buyout has opened avenues for new revenue streams for the organization in the industry. This can help Tigerair Buyout to build a more holistic ecosystem as suggested in the Tiger Airways: Buyout Offer from Singapore International Airlines case study. Tigerair Buyout can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Tigerair Buyout 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.
Using analytics as competitive advantage
– Tigerair Buyout 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 Tiger Airways: Buyout Offer from Singapore International Airlines - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tigerair Buyout 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, Tigerair Buyout can use these opportunities to build new business models that can help the communities that Tigerair Buyout operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Tigerair Buyout 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 Finance & Accounting segment.
Manufacturing automation
– Tigerair Buyout can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Threats Tiger Airways: Buyout Offer from Singapore International Airlines External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tiger Airways: Buyout Offer from Singapore International Airlines are -
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 Tigerair Buyout in the Finance & Accounting sector and impact the bottomline of the organization.
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. Tigerair Buyout needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Tigerair Buyout 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tigerair Buyout 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 Tiger Airways: Buyout Offer from Singapore International Airlines .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tiger Airways: Buyout Offer from Singapore International Airlines, Tigerair Buyout may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Regulatory challenges
– Tigerair Buyout 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 Finance & Accounting industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Tigerair Buyout will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Tigerair Buyout
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Tigerair Buyout.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tigerair Buyout can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Tigerair Buyout 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.
Shortening product life cycle
– it is one of the major threat that Tigerair Buyout is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Tigerair Buyout 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. Tigerair Buyout can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Weighted SWOT Analysis of Tiger Airways: Buyout Offer from Singapore International Airlines 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 Tiger Airways: Buyout Offer from Singapore International Airlines 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 Tiger Airways: Buyout Offer from Singapore International Airlines 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 Tiger Airways: Buyout Offer from Singapore International Airlines 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 Tiger Airways: Buyout Offer from Singapore International Airlines 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 Tigerair Buyout needs to make to build a sustainable competitive advantage.
