Singapore Airlines

Introduction

Singapore Airlines (SIA) was created in 1972 and was fully state owned. The company expanded rapidly, and with a strategy of concentrating on customer needs by providing exceptional in-flight service, the airline quickly became a noteworthy competitor in the market. During its formative period in the 1970s, SIA developed all the hallmarks that made it one of the most successful and consistently profitable airlines in the world. Through a constant investment in personnel skills and other sources, the company has achieved a sustainable competitive advantage, as well as a reputation for classy elegance.

This paper reveals the strategies that have been used by SIA, with backgrounds on their sustainability and sources of advantage, the way these strategies changed over the years and how to continue.

The slides for the presentation that accompany this paper can be found in the appendices.

1. Then & now: Strategical stability and change at SIA

This paragraph contains an evaluation of the value strategies of 1972 and the current value strategy and evaluates the changes that have been made. A description of the 1972 strategy will be given first, thereafter; the current strategy will be discussed.

The marketing strategy that was envisioned by the creation of the SIA had a focus on customer needs by providing exceptional in-flight service. This required the on board flight staff to be of excellent quality. At SIA, there was a constant emphasis on training (including social training and etiquette) and customer service. Ever since, the exceptional in-flight service has become a part of the company culture and image. All of this suggests a strong product-oriented strategy, a value strategy that Treacy and Wiersema (1993) define as product leadership. Competitive advantage came from a good product; the high profitability in the ‘70's was helped by low labor costs in Singapore.

Improvements that have been made since 1972 are foremost improvements to the product of "traveling": better in-flight entertainment, an upgrade to ground services, more flight destinations through the "Star Alliance" network and improved seats and space on board. There are however improvements in other areas than product improvements: 2 kinds of loyalty programs have been introduced, premium passengers' preferences are filed and the complaint management has been improved over the years. The differentiation of types of passengers and the expectation that they will fly SIA again, retaining clients through complaint management and loyalty programs all suggest a move into a customer intimacy value strategy. As service and CRM become more and more integrated at SIA, customer intimacy is strategically embedded in the organization.