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Strategic Decision Marking – Singapore Airlines (Sia)

5847 words - 24 pages

1.0 Introduction
Singapore Airlines (SIA) flew its first flight way back in the year 1947. It was then
known as Malaysian Airlines, which became two separate entities – SIA and
Malaysian Airline System (MAS) in 1972. In between that period from 1947 till 1972,
the airline was named MAS when the Federation of Malaysia was born after gaining
independence from the British government in 16 September 1963 and later renamed
as Malaysia-Singapore Airlines in May 1966.
The airline’s key advertising strategy was the “Singapore Girl”, a personification of
charm and friendliness where stewardesses dressed in a designed “sarong kebaya”
uniform by Pierre Balmain, a French couturier. Stewardesses ...view middle of the document...

2.1.1 PESTEL Analysis
PESTEL analysis is an effective tool for the analysis of the macroeconomic
environment so as to understand the impact on the organization (Philip Kotler,
1999 & Peter F. Drucker,2006). PESTEL is an acronym representing the six
major factors: political, economic, social, technology, environmental and legal
factors (John Tennent & Graham Friend, 2011).

2.1.1.1 Political
Singapore is a politically stable country. Singapore Airlines can
continue to build on the country’s reputation as a safe country to bring
in tourism dollar. In addition, the political situations of our neighboring
countries are also more stable now. This will also help to promote
tourism in the region.
Next, many countries are relaxing their regulations for the operations
of the airline industry and there are also more “Open Skies”
agreements signed between countries. SIA has an outstanding
international reputation with agreements of an “Open Skies” with US,
Australia and other countries' carriers. SIA has extended its network
via code-sharing with fellow members of the Star Alliance marketing
partnership, including United Airlines and Air China. This allows
airlines to sell tickets on one another's flights and thus offer service to
additional destinations.

2.1.1.2 Economic
The airline industry was greatly affected by the terrorist attack in 9/11
2001. It has yet to recover from the impact. The airline industry is also
affected by the recent mysterious vanishing of the Malaysian airline
and the Air Asia accidents. The impending slowdown of the global
economy, the prolonged recession and fluctuating oil prices are
affecting the growth of the airline industry. Airlines have to cope with
increasing operation and maintenance cost due to the high fuel prices,
labour cost, declining passengers, competition from budget airline, etc.
SIA is not spared from the financial crisis in 2008, fluctuating oil
prices, European debt crisis and other economics uncertainties. It is
also facing strong pressure with the rising costs and the fierce
competition from low cost carriers.

2.1.1.3 Social
Over the years, the millennial generation’s emergence into the
consumer class has resulted in major social changes, more importantly
in terms of service, where consumers have become much more
demanding. Therefore, to meet the increasing demands of this segment,
airlines have to stabilize their costs. Additionally, the passenger profile
has changed as well with there being more economically minded
passengers. When it comes to business class passengers, improved
communication facilities have reduced the need to fly down for
meetings.
SIA faces strong pressure to meet the dynamics of higher expectation
and the changing needs of its wide spectrum of customers. SIA has
achieved much success in the premium sector and has introduced Scoot
and Tiger Air to meet the needs of the budget travelers.

2.1.1.4 Technological
With intense...

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