Case Study Description of Singapore Airlines (C): Managing a Strategic Paradox
Supplement to case IMD724. The C case takes a broader geographical view, while focusing on Singapore Airlines' strategic differentiation. The airline, while being widely considered as the standard bearer in terms of quality and customer service, has been able to achieve some of the lowest cost structures in the industry, surpassing even some LCCs. To meet this seeming paradox while minimizing trade-offs, Singapore Airlines draws the line between things that are valued by the customer, where procedural and cultural ingenuity are promoted, and things that have no effect on the traveler, where cost efficiency is sought. Learning objectives: To investigate how, why and where SIA manages its cost/service trade-offs. To identify the key internal characteristics that allow Singapore Airlines to consistently beat its rivals in terms of customer service and profitability.
Authors :: Daina Mazutis, John Weeks, Luis Vivanco, Ivy Buche
Swot Analysis of "Singapore Airlines (C): Managing a Strategic Paradox" written by Daina Mazutis, John Weeks, Luis Vivanco, Ivy Buche includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Singapore Airlines facing as an external strategic factors. Some of the topics covered in Singapore Airlines (C): Managing a Strategic Paradox case study are - Strategic Management Strategies, Market research and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Singapore Airlines (C): Managing a Strategic Paradox casestudy better are - – talent flight as more people leaving formal jobs, there is backlash against globalization, increasing transportation and logistics costs, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing commodity prices, cloud computing is disrupting traditional business models,
increasing household debt because of falling income levels, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Singapore Airlines (C): Managing a Strategic Paradox
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Singapore Airlines (C): Managing a Strategic Paradox case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Singapore Airlines, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Singapore Airlines 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 Airlines (C): Managing a Strategic Paradox can be done for the following purposes –
1. Strategic planning using facts provided in Singapore Airlines (C): Managing a Strategic Paradox case study
2. Improving business portfolio management of Singapore Airlines
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Singapore Airlines
Strengths Singapore Airlines (C): Managing a Strategic Paradox | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Singapore Airlines in Singapore Airlines (C): Managing a Strategic Paradox Harvard Business Review case study are -
High switching costs
– The high switching costs that Singapore Airlines 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.
Effective Research and Development (R&D)
– Singapore Airlines 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 Airlines (C): Managing a Strategic Paradox - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Singapore Airlines has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Singapore Airlines to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Singapore Airlines is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Singapore Airlines
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Singapore Airlines does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Singapore Airlines is one of the leading recruiters in the industry. Managers in the Singapore Airlines (C): Managing a Strategic Paradox are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Singapore Airlines is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Daina Mazutis, John Weeks, Luis Vivanco, Ivy Buche can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Singapore Airlines is present in almost all the verticals within the industry. This has provided firm in Singapore Airlines (C): Managing a Strategic Paradox 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.
Training and development
– Singapore Airlines has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Singapore Airlines (C): Managing a Strategic Paradox 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.
Low bargaining power of suppliers
– Suppliers of Singapore Airlines in the sector have low bargaining power. Singapore Airlines (C): Managing a Strategic Paradox has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Singapore Airlines to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Singapore Airlines 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.
Learning organization
- Singapore Airlines 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 Singapore Airlines is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Singapore Airlines (C): Managing a Strategic Paradox Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Singapore Airlines (C): Managing a Strategic Paradox | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Singapore Airlines (C): Managing a Strategic Paradox are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Singapore Airlines (C): Managing a Strategic Paradox HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Singapore Airlines has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Singapore Airlines 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 bargaining power of channel partners
– Because of the regulatory requirements, Daina Mazutis, John Weeks, Luis Vivanco, Ivy Buche suggests that, Singapore Airlines 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.
Need for greater diversity
– Singapore Airlines 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 Singapore Airlines supply chain. Even after few cautionary changes mentioned in the HBR case study - Singapore Airlines (C): Managing a Strategic Paradox, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Singapore Airlines vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Singapore Airlines 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 Singapore Airlines (C): Managing a Strategic Paradox, it seems that the employees of Singapore Airlines 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 operating costs
– Compare to the competitors, firm in the HBR case study Singapore Airlines (C): Managing a Strategic Paradox 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 Singapore Airlines 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Singapore Airlines (C): Managing a Strategic Paradox, in the dynamic environment Singapore Airlines has struggled to respond to the nimble upstart competition. Singapore Airlines has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Singapore Airlines 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, Singapore Airlines is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Singapore Airlines (C): Managing a Strategic Paradox can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Singapore Airlines (C): Managing a Strategic Paradox | 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 Airlines (C): Managing a Strategic Paradox are -
Developing new processes and practices
– Singapore Airlines can develop new processes and procedures in Leadership & Managing People 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.
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 Singapore Airlines 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Singapore Airlines 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 Airlines (C): Managing a Strategic Paradox, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Singapore Airlines can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Singapore Airlines 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.
Learning at scale
– Online learning technologies has now opened space for Singapore Airlines 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Singapore Airlines to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Singapore Airlines to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Singapore Airlines can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Singapore Airlines in the consumer business. Now Singapore Airlines can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Singapore Airlines 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 Leadership & Managing People segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Singapore Airlines 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. Singapore Airlines 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. Singapore Airlines can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Singapore Airlines has opened avenues for new revenue streams for the organization in the industry. This can help Singapore Airlines to build a more holistic ecosystem as suggested in the Singapore Airlines (C): Managing a Strategic Paradox case study. Singapore Airlines can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Singapore Airlines (C): Managing a Strategic Paradox External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Singapore Airlines (C): Managing a Strategic Paradox 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Singapore Airlines in the Leadership & Managing People industry. The Leadership & Managing People 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.
Consumer confidence and its impact on Singapore Airlines 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.
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 Singapore Airlines business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Singapore Airlines 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. Singapore Airlines can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Singapore Airlines needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
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 Singapore Airlines.
Shortening product life cycle
– it is one of the major threat that Singapore Airlines is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Singapore Airlines 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 Airlines (C): Managing a Strategic Paradox .
Stagnating economy with rate increase
– Singapore Airlines 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 Singapore Airlines (C): Managing a Strategic Paradox, Singapore Airlines may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Singapore Airlines can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Singapore Airlines (C): Managing a Strategic Paradox 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 Airlines (C): Managing a Strategic Paradox 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 Airlines (C): Managing a Strategic Paradox 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 Airlines (C): Managing a Strategic Paradox 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 Airlines (C): Managing a Strategic Paradox 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 Singapore Airlines needs to make to build a sustainable competitive advantage.
