Air flight is becoming closer and closer to our lives. A biggest advantage of air flight is speed, for example, in order to travel from Saigon to Hanoi, it takes at least 36 hours by bus, 24 hours by train but only 2 hours by flight. Completion in airline industry is increasingly intense when many airlines step in with their techniques to attract customer. “Who lead the field? ” is always a top importance concern of all airlines.
Singapore Airlines is not an exception, starting as a separate airline from former Malaysia-Singapore Airline in 1972, now it is recognizes as one of world’s leading international airlines. We should wonder how come an airline of a small area, low population country like Singapore now have been growing to a top position in the in the international playing ground? Singapore Airlines is proud of its habit of leading the way and reputation for being an industry trendsetter.
Think of Singapore Airlines, customers may think of an airline that was first to offer free headset, choice of meal and free drinks in economy class, satellite-based in-flight telephones, first to operate the world’s longest non-stop commercial flight between Singapore and Los Angeles, first to fly the A380 from Singapore to Sydney and so on ( Singapore Airlines). Through its mission statement: "Singapore Airlines is a global company dedicated to providing air transportation services of the highest quality and to maximising returns for the benefit of its shareholders and employees."
Singapore Airlines, we can understand that Singapore Airlines not only focus on service quality providing to customer but also its investors and working force. Singapore Airlines build up a Investor Relations team aim at strengthening investor relationship. Variety of Information on shareholding, financial and operating date are publicize on website, enable a transparent assessment of company’s value and keep all people up to date on its performance. Merits of strategies have been taken, namely differentiation, cost effective service excellence, being first, Singapore Airlines continues to be flying high in the sky competition.
About the Case study This case analysis paper will identify what approaches that SIA has used to stay competitive in the global airline industry, specifically, how service differentiation enables an airline such as SIA stay ahead in the fight for market share. We also discuss on the “being first strategy”, to answer the question of is it always a successful marketing strategy? The answer is clarified with some examples of “being first” strategy failure that applied by companies who have tried to be first through product and service innovations and yet not achieved comparable success as market leaders.
Case summary Starting from its humble beginnings in 1972, following the strategic marketing mantra of being first, Singapore Airlines today is recognized as one of the world’s leading international airlines. “To present Singapore Airlines as a competent, modern, international airline of Asian origin, offering the best in-flight service in the world. ” – Its positioning statement, an underlying principle to continue developing its service differentiation ( Singapore: The Enclyopedia, 2006).
SIA has garnered numerous awards and accolades for being an outstanding airline thank to the iconic Singapore Girl- symbol of excellence in customer service, both in the air and on the ground, and over the past 30 plus years. However, not resting on its laurels, Singapore Airlines keeps developing its innovation, improving service differentiation, being first in the industry, in order to stay competitively with other rivals such as Cathay Pacific, Thai International Airways in the Asia market and global player such as British airways and Qantas.
New aircraft acquisition, providing in-flight entertainment, launching the world’s longest nonstop commercial flight from Singapore to international destinations are in the list of action plans that Singapore Airlines undertake to win the fight for passenger share in the intensively-fought, increasingly pronounced battle in the sky.
Questions for Discussion: 1. Briefly discuss the approaches that SIA has used to stay competitive in the global airline industry.
2. Discuss how service differentiation enables an airline such as SIA stay ahead in the fight for market share.
3. Does being first always translate into a successful marketing strategy? Give examples of companies that have tried to be first through product and service innovations and yet not achieved comparable success as market leaders. Discussion Approaches that SIA has used to stay competitive in the global airline industry
Upon so many successful implemented strategies that Singapore Airlines conducted through years of operations, in the limited of this research, we proudly identify 3 most successful approaches that help SIA stay still competitive in the global airline industry, including cost effective, service excellent, and differentiation (or being the first) 1. Cost Effective Approach In 2000 and 2001, the staff cost comprised 16% of SIA’s expenditures, fuel made up 21% of SIA’s expenditures. The profit then depended heavily on fuel cost as well as the usage.
Therefore, the change in fuel productivity of 1% would affect annual fuel cost. In the wave of internet invasion, SIA took that advantage to reduce aircraft maintenance cost by alliance with 12 airlines to launch Aeroxchange. This helps SIA and its liaisons to build up business e-commerce with the purpose of offering comprehensive selection aircrafts, technical parts and services over the Internet ( Singapore Airlines). Last but not least, SIA also embarked on a million dollar effort to consolidate, group disparate computer systems to one common e-business platform in 2001.
Moreover, the change in informatic Technology helps them to have information quickly and accurately as possible across the network for timely response of non-stop customer satisfaction ( Arnold, pp 89-100) 2. Service excellence “Excellent customer service to a customer means giving solutions to a customer's problems in an appropriate and accurate manner. It is a highly important part of every small business and any company, because excellent customer service characteristics usually give a company a distinct advantage over its competitors.
Some of the characteristics of excellent customer service are: significance, accessibility, considerations, functions and prevention/solution. ” ( Singapore Airlines). Service excellence in this limited scope, we focus on four sections, namely perspective of service excellence, understanding customer and anticipating their needs, training and motivating the front line and managing with an eye for detail profits. One of the key purposes of Service Excellence is to give the customer a great experience and good perspective value of service excellence. They become the best airline service company.
SIA often gets feedback from its staff, the information of competitor as well as from major surveys to help them rise up new ideas. SIA’s philosophy is to provide their customers with a true wonderful experience. There is a consistency with personalization, because the service is flexible and creative. Iconic Singapore Airlines girl is of the great example of its service excellence. Flight attendant skill has been improved over time to make service become continuous excellent ( Jochen Wirtz and Loizos Heracleous). Another aspect of service excellence that SIA brings is to better understand customer and anticipate their needs.
SIA always listen to customer and front line staffs; try to learn customer life style, customer trend. They take all of the complaints, compliments as of their motivation to go forward. Another advantage competition is training and motivating the front line. SIA has been pouring large amount of money on training by using best software and hardware. Adding to their success, TCS (Transforming customer service) is one of the latest service excellence initiatives which involve staffs in five key operational areas: cabin crew, engineering, ground services, flight operations and sales support.
It is not just the cabin crew or ground services who can contact with customers directly that count, these five areas need to work well with each other to deliver superior service to customer. Part of their job is to dealing with pressure from customer, they need to have good communication skills and motivation. The final key of service excellence is managing with an eye for detail and profits. SIA hasexperiences human resources, especially in management level, who has a vision for global business and always not satisfy with current things. They attempt high quality at a profit.
Differentiation (Beingfirst or using first: the first award, record or the pioneer in using the first new product to gain success in differentiation) Apart from new products acquisition, using latest technology and convenience, new operation, they achieve successful milestones ( Singapore Airlines – Our history): In 1989, SIA became the first airline to operate a B747-400 on a commercila flight across the Pacific. SIA got the record for the world’s longest nonstop commercial flight from Singapore to Los Angeles (Feb-2004) and New York (Jun-2004).
On 15-Oct-2007 SIA took the first Airbus A380, the world’s largest commercial jet. Now, SIA have totally 19 A380s and order 5 more. SIA is the only airline offering direct flights between Southeast Asia and Brazil. SIA was the first airline to operate out of Changi Airport Terminal 3 in January 2008. The airline currently operates out of both Terminal 2 and Terminal 3 In May 2008, SIA created history again by being the first carrier to operate an all-Business Class service between Asia and the USA with its launch of all-business class non-stop flights from Singapore to New York.
21-Jan-2009, SIA received the first of 19 new A330-300 aircraft in Toulouse, France. How service differentiation enables an airline such as SIA stay ahead in the fight for market share Approaches to differentiation include the development of unique brand images, unique technology, unique features, unique channels, unique customer service or the like. In other words, the key to differentiation is obtaining an advantage that is readily perceived by the customer. Service differentiation is always a strategic challenge.
Singapore Airlines has consistently outperformed its competitors throughout its history, in the context of an unforgiving industry environment. Singapore Airlines has achieved high performance and sustained competitive advantage very well, through effectively carrying out a dual strategy: differentiation through service excellence and innovation, together with simultaneous cost leadership in its peer group. In this write-up, we will mention how service differentiation enables an airline such as SIA stay ahead in the fight for market share. SIA has two main assets planes and people which help it become better than its competitors.
