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 - – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing energy prices,
geopolitical disruptions, increasing government debt because of Covid-19 spendings, 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 -
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.
Sustainable margins compare to other players in Finance & Accounting industry
– Tiger Airways: Buyout Offer from Singapore International Airlines firm has clearly differentiated products in the market place. This has enabled Tigerair Buyout to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Tigerair Buyout to invest into research and development (R&D) and innovation.
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.
High brand equity
– Tigerair Buyout has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tigerair Buyout to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
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.
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.
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.
Ability to lead change in Finance & Accounting field
– Tigerair Buyout is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Tigerair Buyout in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Tigerair Buyout digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tigerair Buyout 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.
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 -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tiger Airways: Buyout Offer from Singapore International Airlines, is just above the industry average. Tigerair Buyout 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.
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.
No frontier risks strategy
– After analyzing the HBR case study Tiger Airways: Buyout Offer from Singapore International Airlines, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ruth S.K. Tan, Zsuzsa R. Huszar, Weina Zhang suggests that, Tigerair Buyout 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Tigerair Buyout 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.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tiger Airways: Buyout Offer from Singapore International Airlines, it seems that the employees of Tigerair Buyout don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Products dominated business model
– Even though Tigerair Buyout has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Tiger Airways: Buyout Offer from Singapore International Airlines should strive to include more intangible value offerings along with its core products and services.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tigerair Buyout in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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.
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.
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.
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. Tigerair Buyout can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Tigerair Buyout can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tiger Airways: Buyout Offer from Singapore International Airlines suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Developing new processes and practices
– Tigerair Buyout can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Tigerair Buyout to increase its market reach. Tigerair Buyout will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tigerair Buyout can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Stagnating economy with rate increase
– Tigerair Buyout 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.
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 .
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 .
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Tigerair Buyout.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tigerair Buyout with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tigerair Buyout business can come under increasing regulations regarding data privacy, data security, etc.
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.