Analyze The Competitive Analysis Over Singapore Airlines †Samples

Question: Discuss about the Analyze The Competitive Analysis Over Singapore Airlines. Answer: Introduction: This report has been prepared to analyze the competitive analysis over Singapore Airlines. For conducting the competitive analysis over the organization, PESTLE analysis has been conducted. This report briefs the user about the competitive factors of a company. Further, in this report company description has been given initially, further, porters 5 forces model has been described. Additionally, porters 5 forces model depicts the user about the Singapore airlines competitive factors. The main goal of this report is to assess the business situation, resources held by the firm and the competitive issues faced by the company in international market. The tools and techniques used to commence these investigations is PESTLE analysis. Company overview: Singapore Airlines has been chosen to analyze the Porters 5 forces model. It is one of the nationwide Singapores carriers that have a global presence and a centre on the Australasian and Asian markets. It has been founded in 1972; the Airline has developed its position in last 4 decades to become the largest airlines worldwide. Currently this is one of the successful airlines, with a generous and comparatively young convoy of planes. According to the mission statement of company, "Singapore Airlines is an international company which is dedicated to offer air transportation services with a good quality to enhance the returns for shareholders and employees benefits (Air transport world, 2017). Porters 5 forces model on Singapore Airlines: Porters Five Forces analysis Michael Porter has recognized five factors that could impact over the performance of a company within the boundaries of market: new entrants threat to the market; substitute products or services threat; suppliers bargaining power; buyers bargaining power and rivalry intensity in the market (Beria, Niemeier Frhlich, 2011). It is general for the investigators to analyze the above factors for predicting the likely achievement of a firm in a market (Markides, Sosa, 2013). These factors have been applied to the Singapore airline as follows: The threat of new entrants: This aspect of the Five Forces describes to the level to which new rivalry could be contained within the business. In terms of the airline business of long-haul passenger which dominates in Singapore Airlines marketplace activity currently, the new entrants threat is also feeble. Long haul air journey is a quite inundated industry with only one or two national hauliers which are representing each financial system; most of them get some backing from the government of the state. This depict that generally traffic growth comes from growth of a carrier of a state rather than the entry of new rivals to the market. Confirmation of the diffusion of extended haul airline traveller industry could be seen in the overcrowding of the airports and skies, mainly large regional centres and there is impulsion from governing and regulatory bodies as well as travellers to decrease the current obstruction levels (Fu Oum, 2014). In this case, there is great cost of capital and long guide times to get b ack investment in this industry which gives details to the high breakdown rates of numerous emerging airlines. Regardless of the feeble threat of new contestants to the full, extended-haul airline traveller sector, the short-haul industry has observed the entrance of numerous new entrants in last few years. For instance in Asian markets of Southeast side in which Singapore Airlines is operating Jet Star and Air Asia (Heracleous, Wirtz Pangarkar, 2006). The intensity of rivalry Porter has conceptualised competition inside an industry as existing on a scale from low to high. It has been argued that where competition is intense, operations must constantly scan the marketplace for alterations in the demands and needs of customers and reverts them accordingly. A powerful rivalry is there within the Singapores airline industry, but it takes place on a route-by-route basis. Where routes of the airlines are well serviced by numerous different airlines, rivalry could be more powerful. For capturing the market share on these routes, airlines should accept price-cutting policies or make sure that the service quantity is quite high. Such as, Cook et al (2012) have noticed that on a very well-serviced route, punctuality lack could have damaging effects on hauliers. Consequently, many routes are still remaining that has been monopolised by very less carriers. Such as the Kangaroo Route, containing relations between Australia, New Zealand and Southeast Asia is an outstan ding example. Since there are only few carriers which are operating in this route, rivalry tends not to be as violent. The Singapore Airlines exceptional performance in last few years has been appreciable to the Kangaroo Route capture (Lim Lee, 2012). The threat of substitute services: This factor of the Five Forces model refers to the level in which the service or product offered by an industry could be replaced through other service which is similar in nature. It has been argued that businesses which were offering substitutable services and products could lose their market share. Further, distinctions should be made among the long-haul and short-haul armaments of business operations of Singapore Airlines. The substitute services threat to the short-haul factors of the business is comparatively moderate in nature. Due to globalisation, investments are enhancing in transportation business between major environmental hubs, which also includes those firms which has been served by Singapore Airlines (Centre for Aviation, 2017). For example, it is possible that high-speed connections of railway would exist among the Eurasias major cities in the near future. More instantly, Singapore Airlines main threat is the market for business class travellers of long-haul which is posed by the mounting rebellion of internationalised organisations workers to travel for labour. Due to enhanced apprehension with the ecological impact over the air travel, enhanced real-time telecommunications technology and the mounting number of implicit enterprises, persons that would formerly have made substantial use of long-term travel due to business are analyzing that work from home could be done by them (Heracleous Wirtz, 2014). The bargaining power of customers: It has been said by Porter that where strong bargaining power has been hold by the buyers than the suppliers relative position of services and products would be relatively feeble. In airline industry, service provider and product manufacturer should be mainly cognizant of the demands and needs of their client base if they want to maintain and develop their market share. The customers bargaining power in the airline industry is reasonable in nature (Bloomberg business weak, 2017). The cost of switching between airlines companies is very low. Switching costs means to the weight which has been perceived by customers in opting one supplier over the other supplier, and are encompassed of opportunity, time, emotions and financial costs. analysts have discussed that switching costs for flights travellers have significantly conical in last few years which has been driven by the rejection in high street offices of airline, proliferation of the Internet and travel agents. Although every airlines have their individual websites virtually through which travellers could search, pay and book the flights. This way is more common for travellers to hunt for flights by using huge number of comparison sites which are available online such as Traveljungle.com and Lastminute.com. These websites allow travellers to compare the charges of flight according to the services and routes which in turn makes it easy for the traveller to switch (Cook, Tanner Lawes, 2012). However, airlines have been attempting to enhance the switching costs throughout the stipulation to travellers of loyalty systems. Travellers are confident to stay loyal with a single airline brand as purchase frequency allows them to earn the points or air miles which could be exchanged for discounted or free flights, or other gifts. The bargaining power of suppliers: This factor of the Five Forces models explains to the level to which suppliers could discuss over materials and equipment with businesses. It has been discussed that if the suppliers have strong power of bargaining than the businesses relative position would be relatively feeble. Strangely for an industry of transportation, airline industry suppliers are in a fairly strong position of bargaining. Fleets are supplied to the industry by Boeing and Airbus while in supply of engines, an oligopoly exists (Hakimian, 2011). With very few suppliers in manufacturers and operations, suppliers are capable to unilaterally set up the prices and the delivery times. Conclusion: Thus through this report, it has been concluded that porters 5 forces model is quite helpful for the industry to analyze the competitive position of the company. It has been found through this study that Singapore airline has been improved its operation from last few years and due to it the competitive strength of the company has been enhanced. Further, many external aspect related to company has been analyzed. References: Air Transport World (2014). Singapore Airlines boosts Tigerair stake. Online at https://atwonline.com/finance-amp-data/singapore-airlines-boosts-tigerair-stake. Accessed on 08 August 2017 Beria, P., Niemeier, H. M., Frhlich, K. (2011). Alitaliathe failure of a national carrier. Journal of Air Transport Management, 17(4), 215-220. Bloomberg Businessweek (2017). Singapore airlines completion rise. Online at https:// www.businessweek.com%2Farticles%2F2012-05-17%2Fsingapore-airlines-competition-rises. Accessed on 08 August 2017 Centre for Aviation (2017). Singapore Airlines reduces focus on US market as non-stop flights are dropped. Online athttps://centreforaviation.com/analysis/singapore-airlines-reduces-focus-on-us-market-as-non-stop-flights-are-dropped-131665. Accessed on 08 August 2017 Cook, A., Tanner, G., Lawes, A. (2012). The hidden cost of airline unpunctuality. Journal of Transport Economics and Policy 462), 157-173. Fu, X., Oum, T. H. (2014). Air transport liberalization and its effects on airline competition and traffic Growth: An overview. The Economics of International Airline Transport (Advances in Airline Economics, Volume 4) Emerald Group Publishing Limited, 11-44. Hakimian, H. (2011). The economic prospects of the Arab Spring: A bumpy road ahead. CDPR Development ViewPoint 63 (1), 1-2 Heracleous, L., Wirtz, J., Pangarkar, N. (2006). Flying High in a Competitive Industry. Singapore: McGraw Hill Heracleous, L., Wirtz, J. (2012). Strategy and Organisation at Singapore Airlines: Achieving Sustainable Advantage Through Dual Strategy. In Inderwildi, O. and King, D. (eds.) Energy, Transport, the Environment (pp. 479-493). London: Springer Heracleous, L., Wirtz, J. (2014). Singapore Airlines: Achieving sustainable advantage through mastering paradox. The Journal of Applied Behavioral Science, DOI: 0021886314522323. Lim, S., Lee, B. (2012). Online loyalty programs viewed from a searchability perspective. In Proceedings of the 14th Annual International Conference on Electronic Commerce (pp. 255-262). ACM. Markides, C., Sosa, L. (2013). Pioneering and first mover advantages: the importance of business models. Long Range Planning, 46 (4), 325-334.