4/21/2009

University of
Auckland Service-Dominant Logic – A case Of Singapore Airlines

Prepared by: Mai El Haddad, Siyuan Wu, Wenyan Tang and Talisa Maulgue
 TABLE OF CONTENTS

Introduction........................................................................................................................................................................ 2

Overview of the industry............................................................................................................................................... 2

Singapore Airlines ............................................................................................................................................................ 3

Alliances and Acquisitions ....................................................................................................................................................................... 3

Brand Image: “The Singapore Girl” ...................................................................................................................................................... 4

Strategies ........................................................................................................................................................................................................ 4

Service-Dominant Logic and SIA ................................................................................................................................ 5

Skills and Knowledge Exchange (FP1) ............................................................................................................................................... 5

Indirect Exchange (FP2) ........................................................................................................................................................................... 5

Distribution Mechanisms (FP3) ............................................................................................................................................................ 6

Operant Resources as Competitive advantage (FP4) ................................................................................................................... 6

Service Economies (FP5).......................................................................................................................................................................... 7

Co-creation of Value (FP6) ...................................................................................................................................................................... 7

Value Proposition (FP7) ........................................................................................................................................................................... 8

Customer orientation and relation (FP8) .......................................................................................................................................... 8

Resource Integration (FP9) ..................................................................................................................................................................... 9

Value Determination (FP10)................................................................................................................................................................ 10

Managerial Recommendations ................................................................................................................................. 11

Conclusion ................................................................................................................................................................................................... 11

Appendices ........................................................................................................................................................................ 12

Micro-Environment Analysis ............................................................................................................................................................... 12

Porters Five Forces analysis............................................................................................................................................................ 12

PESTE........................................................................................................................................................................................................ 13

SWOT Analysis ...................................................................................................................................................................................... 13

SIA Resources ............................................................................................................................................................................................. 14

Alliances and Acquisitions .................................................................................................................................................................... 14

SIA Positioning........................................................................................................................................................................................... 15

References ......................................................................................................................................................................... 16

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 INTRODUCTION

Service-Dominant Logic is a new paradigm that marketing is evolving towards, which emphasises on
service provision, intangible resources, co-creation of value and relationship management. The
present report examines the relevance of S-D Logic to Singapore Airlines (SIA), a leading carrier in the
airline industry for many decades, and discusses the managerial implications from adopting this
perspective. A brief overview of the entire airline industry is provided, and then SIA is discussed in
terms of its history and strategies. Next, we investigate the degree to which the S-D logic is applied to
SIA, with the use of Vargo and Lusch’s ten foundational premises. The report concludes with
discussions of the extent of adopting the S-D logic and managerial recommendations.

OVERVIEW OF THE INDUSTRY

The airline industry has evolved tremendously since it started. It has transformed the way people live
and conduct business by altering the concept of distances and shortening travel time. It facilitates
economic growth, world trade, international investment and tourism and is therefore vital to
globalization in many other industries (the Airline Industry, 2009).

The airline industry has become a large industry characterized by aggressive competitions. According
to Heracleous, Wirtz and Pangarkar (2006), in 2003, there were 896 scheduled airlines that carried
more than 1.657 billion passengers and 40% of the world’s manufactured exports. From 1993 to 2003
the industry has increased the total revenue by 28%. However, the industry is facing new challenges
especially with pressures from the “great recession” since 2003. According to the Center for Asia
Pacific Aviation (2009), “Worldwide, the number of passengers travelling on First or Business class
tickets fell by 16.7% in Jan-2009, a further substantial fall from Dec-2008 levels, which were 13.3%
down on the year.”

A PESTE analysis is conducted in order to examine the emerging trends in the airline industry
(Appendix Figure 2). A significant political trend is the introduction of the open skies policies because
of globalization and liberalization. This allows airlines to compete in a more open and fair way. Some
of the main economical trends include the rise in oil prices and the initiation of global alliances.
Globalization allows airlines to engage in capacity sharing and price controls, which ultimately leads
to more fierce competitions. One of the important social trends is the increasing consumer demand for
more empathy and personal attention on premium airlines. Technological aspect is one of the crucial
determinants as the airline industry is “a pioneer in the innovation and use of information technology”
(Khan, Dutt and Bansal, 2008). Most airlines now sell tickets online, utilize SMS services and provide

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self-service technologies. Being a leader in the introduction of these technologies has many
implications for the management of the airlines.

SINGAPORE AIRLINES

SIA was the result of a split from the Malayan Airways on 1 October 1972 (Heracleous et al., 2006). It
was a state owned enterprise and was expected to pay taxes and be profitable. Chan (2000) stated
that “soon after the split from Malayan Airways, SIA pursued an aggressive growth strategy and an
aircraft and equipment acquisition strategy”. The uniqueness in SIA’s strategy is that the senior
management dedicated the majority of their resources on providing excellent in-flight service
experiences to customers. SIA has positioned itself in the premium service, quality and value market
segment of international airline industry (Appendix Figure 6). Mr. Yap Kim Wah, the senior vice
president of SIA, stated that SIA strives to “not just to be the best of the best in the airline industry, but
to work at being the best service company” (Wirtz & Johnston, 2003). It is evident that this still forms
the core competencies of contemporary SIA strategies. SIA today define their industry as being the
service industry rather than the airline industry. By leveraging tangible as well as intangible resources
they have managed to sustain their leadership in the industry, in terms of innovation and revenue
generation. This is illustrated in Appendix Figure 4.

A Porter’s Five Forces analysis has been conducted (Appendix Figure 1) to determine factors that
influence SIA’s ability to compete within the airline industry. Because of the aggressive nature of the
industry, it is hard to sustain competitive advantages. For SIA, the industry is very crowded, not only
with airlines that share the same strategic position but also with an emerging trend for cutthroat
pricing by other airlines who pose a threat for SIA (Appendix Figure 6). Bargaining power is high for
both buyers in choosing among alternatives and suppliers due to unavoidable production costs such
as fuel supply and airport contracts. Barriers to entry are high due to the complicated licensing
procedures and high capital requirement, which holds for both new entrants and existing airlines with
intentions to target the “premium” segment in the market; this is mainly due to SIA’s almost
unbeatable brand equity.

ALLIANCES AND ACQUISITIONS

Since 1995 SIA began to form alliances with various airlines in an effort to improve their access to key
markets (Heracleous et al. 2006). The diagrams in Appendix Figure 5 show the transition of SIA
approach to alliances and acquisitions between 1995 and 2004. From these we can conclude that SIA’s
earlier strategy was to develop a small network, and it was mainly allied with low profile airlines.

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However, their network has grown and allied with very high profile partners, such as United Airlines,
SAS and Lufthansa. The nature of these relationships is shown in Appendix Figure 5.

BRAND IMAGE: “THE SINGAPORE GIRL”

Around the world the Singapore girl is a very positive marketing icon. “She evokes the very best in
Asian charm and hospitality” (The Sunday Times, 1997). The Singapore girl remains the face of SIA
since the beginning. The cabin crew is costumed in specially designed version of the traditional Malay
“sarong kebaya” (Heracleous et al., 2006). The reasoning behind this choice is to reflect the long
tradition of Asian women being charming, graceful, gentle and courteous, which are also the
characteristics SIA aims to be associated with (Chan, 2000).

STRATEGIES

SIA’s main strategies include:

Constant change in innovation: According to Mr. Yap (Wirtz et al., 2003), while their
competitors are busy copying their innovations they are designing a new one, which is why SIA
remained the innovation leader in the industry.

Emphasis on service industry: As pointed out earlier by Mr. Yap, SIA competes in the service
industry rather than the airline industry.

Understanding customers: lifestyle, frontline staff, complaints and compliments. This goes
hand in hand with the above two strategies as understanding their customers is part of
providing service and it also help them innovate new services that are relevant to the
customer.

The inter-relationship among these three strategies is most likely to be where their core competencies
lie. The integration between their front line staff, their innovation team and their research teams is
where synergy is created. The complexity of their service model has helped SIA to sustain their
position in the market. These strategies have led SIA to be acknowledged as one of the leading carriers
internationally with a strong reputation of providing excellent services. SIA has won a numerous
number of awards that include “best airline”, “best business class”, “best cabin crew service”, “best in-
flight food”, “best for punctuality and safety’, “best for business travelers”, “best air cargo carrier” and
even an “Asia’s most admired company” (Wirtz et al., 2003). Most notably, “The Singapore Airport
Terminal Services (SATS), In-flight Catering has maintained a 47-year zero-food-poisoning record”
(Chang, Yeong & Loh, 1997).

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 SERVICE-DOMINANT LOGIC AND SIA

Given that the airline industry is fundamentally a service industry it is not surprising that it is one of
leading industries in their application of the S-D Logic. The adoption of the S-D Logic reflects a
transition from a manufacturing era to a service era, in which the focal of exchange moves from goods
to service and the concept of market with and amongst. The S-D Logic comprises of ten fundamental
premises, each one of these is discussed in details, within the context of SIA, below.

SKILLS AND KNOWLEDGE EXCHANGE (FP1)

This premise deals with skills and knowledge being the primary unit of exchange. It is the application
of these operant resources that transforms operand resources to create a solution for the customer. In
the airline industry, there are features and attributes such as flight schedules, punctuality and arriving
safely at the desired destination. These are considered to be minimum requirements in order to
operate. Passengers expect these standards to be met and take them for granted; however, SIA uses
this as an opportunity to differentiate themselves by creating the “WOW” effect. As noted by Mr. Yap,
(Wirtz et al., 2003), SIA’s customers’ expectation is already “sky-high”, SIA continuously strives to
provide solutions that would exceed their expectations.

SIA integrates their front-line staff’s softer skills with the tangibles to demonstrate the adoption of this
premise. Senior management emphasizes that front-line staff at SIA are empowered to make
appropriate decisions on handling customers and take corrective actions as needed. For example, a
passenger expressed her satisfaction with the service, “the entertainment system in my seat broke
down and the cabin crew manager offered me a 70USD voucher for other purchases on-board”
(personal communication Tiffany Tang, 2009). This example shows that SIA staff can cope with
difficult situations and provide appropriate solutions that will make customers satisfied.

INDIRECT EXCHANGE (FP2)

According to Vargo and Lusch (2004), micro-specialization masks the true nature of exchange of
skills-for-skills, services-for-services. They warned that this came at a price; workers along the chain
did not directly interact with the ultimate customers, therefore they weren’t aware of how their skills
were adapted to co-create value with the customer. This can be observed in SIA with their policies for
staff training. For example, although pilots almost never directly interact with passengers, they are
still required to undertake the training that the frontline staff must attend (Wirtz et al., 2003). By
acquiring the knowledge from training, the pilots become equipped to deal with customers should
they need to. This is an effort to overcome the micro-specialization problem.

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DISTRIBUTION MECHANISMS (FP3)

This premise refers to the idea that goods are merely a vehicle for service provisions, and have
become platforms for operant resources to be applied to create value.

In the “Market with and amongst” concept, the focus has been transformed from actual products to
memorable experiences that customers will undergo from participating in the offerings. As cited in
Vargo and Lusch (2004), Bastiat recognized that by using operant resources, people could transform
matter into a state from which they could satisfy their desires. In other words, goods are used to
achieve higher-order benefits such as self-fulfillment and self-esteem. SIA has offered this experience
to customers by using the best tangibles and combining it with the top quality service. This is evident
in Mr. Yap’s assertion that it is not enough to have the best seats, planes, food and beverages or other
tangibles; it is the “totality” of the services supporting those tangibles which count (Wirtz et al., 2003).

OPERANT RESOURCES AS COMPETITIVE ADVANTAGE (FP4)

This premise explains that operant resources are the source of competitive advantage, including skills
and knowledge gained by the organization. The learning process within the organization and the
application of knowledge across functions creates synergy which can lead to competitive advantage.

In SIA, the effective implementation of human resource strategy has contributed to its sustainable
competitive advantage, especially for the front-line staff. This is achieved through stringent
recruitment procedures as well as extensive training and motivation of employees. Applicants
undertake three rounds of interviews, in which only about 500 new cabin crew are hired from 16,000
applicants (Wirtz et al., 2003). SIA perceives training as a necessity, not as an option, and thus
emphasizes that extensive training is central to continuous improvement. The reason behind this is
because the skills carried by frontline staff are an important part of SIA’s operant resources. This is
also why SIA places a lot of attention on its staff’s needs. SIA uses non-financial awards for recognition
and motivation of staff, such as photographs and write-ups in the newsletters and a special badge for
those who have received a lot of passenger compliments (Wirtz et al., 2003). Additionally, SIA looks
after the interests of their staff through extra-curricular activities, by developing communities within
the organization for different hobbies.

Another part of SIA’s operant resources is their innovation team. This can be observed in their
leadership within the industry, as they are known to be the transformers of the industry rather than
followers, as seen in FP6. The focal point behind this is to understand the demands of customers. The
application of this strategy across their functions is what distinguishes them from their competitors
and creates their synergies and sustainable competitive advantages.

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SERVICE ECONOMIES (FP5)

This fundamental premise states that “service is only becoming more apparent with increased
specialization and outsourcing; it has always been what exchange is” (Vargo and Lusch 2006). The
differentiation of specialized knowledge and skill classifies economic activities. The economy has
moved away from transactional selling to market within and amongst. Economic activities are
increasingly separated into different manners of operant resources. This logic is evident in SIA’s
operations, which is applied in both internal and external strategies. Externally SIA has developed
networks with others in the industry; they have recognized the need for specialization and
outsourcing in order to focus on their core strategies as seen in FP9. Internally, they have developed
good relations with employees on all levels to enhance communication as seen in FP4.

With the recognition that “all economies are service economies” comes the contradiction of achieving
standardized service, but is also heterogeneous and personalized. Singapore Girl appears in
advertisements repeatedly despite the theme and offerings SIA is promoting. SIA communicates the
same symbol time after time to customers for the purpose of consistency. The core offering for SIA is
not to transport customers from point A to point B; it is to deliver top quality in-flight service. The
continuous excellent performances SIA carried out over the past three decades built up strong brand
equity and goodwill for the firm. For its long time good reputations, Singapore Girl becomes a
personification of the “standardized” excellent service which also provides customized catering (Chan,
2000).

CO-CREATION OF VALUE (FP6)

One of the ways in which S-D Logic is clearly implemented in SIA’s strategy is their emphasis on the
“co-creation of value”. Again this demonstrates their departure from the “transactional market”
concepts to “market with and amongst”. SIA has developed very comprehensive and elaborate
mechanisms that allow them to co-create value, not only with their customers but their staff as well.
These mechanisms include listening to their customers, listening to their front-line staff,
understanding their customers’ lifestyles and paying attention to any complaints as well as
compliments.

Mr. Yap stated, “We study data and observe customers in order to understand our customers really
well, so then we can anticipate their needs” (Wirtz et al., 2003). After tracking and analyzing the
feedback they receive, the product innovation department projects current trends as well as emerging
trends in order to foster innovation. One example is the fact that SIA was the first to introduce the
“SMS alert system” which informs customers of any flight delays or arrivals via short text messages.
Although many in the industry were sceptical about this at the beginning, it is now imitated by a
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number of other airlines. Another example, which people were also sceptical about, was the
introduction of email services in-flight. This is however appreciated by business passengers who were
found to enjoy their flight more if they clear their emails before arrival. SIA was also the first to
introduce broadband, once again people in the industry thought that was not necessary, however SIA
realized that business passengers could use that to take advantage of fluctuating exchange rates.
Other passengers may also find it useful to research their destinations and making hotel bookings
prior to arrival. These are all examples of how SIA co-creates value with their customers, by
understanding their lifestyles and needs. Mr. Yap adds “If you approach service from providing
customers needs on the bases of functionality, you miss the point. It is not about having a smoother
flight from A to B. That will be taken for granted. It is about connecting with people’s lifestyles and
needs” (Wirtz et al., 2003).

Another mechanism to co-create value is listening to front-line staff. Since they are directly in contact
with the ultimate customer it is necessary to listen to them and investigate all suggestions they have
made, with no exceptions. As Mr. Yap said “If you do not listen to the crew, you’ve let an opportunity
pass, which is crazy!” (Wartz et al, 2003). SIA take verbal as well as written reports from staff
sincerely and their crew know their suggestions will make a difference.

VALUE PROPOSITION (FP7)

This premise states that the enterprise can only make value propositions, as opposed to delivering
value. Value is created when a customer decides to engage in any of the offerings. Vargo (2008) stated
that “the firm cannot unilaterally create value but can only offer value propositions (and potentially
co-create value). That is, as noted, involvement of the customer in coproduction of the offering is an
option, but there is no other way to adequately understand value, except through customer
participation”. This is to say that SIA can only propose great service and catering, however the value is
only created when the customer decides to accept and participate in the offering. For example, SIA
was the first airline who flew an A-380-800 aircraft, which was viewed as the most luxurious plane
and often named “Superjumbo”. In this case value is only proposed by SIA; however, it is determined
by business passengers who perceive the aircraft as prestigious. The prestige is not embedded in the
operand resources (aircraft), but rather the perception of the customer.

CUSTOMER ORIENTATION AND RELATION (FP8)

Vargo and Lusch (2004) proposed that a service-centerd view is inherently customer oriented and
relational. This can be seen from SIA’s efforts to focus on customers and relationships in its marketing

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strategy. Interactivity, integration, customization and co-creation all contribute to the success of SIA
today.

SIA makes a great deal of effort to interact with their customers (FP 6). Customers are well connected
to SIA through methods such as in-flight surveys and customer focus groups. Compliments and
complaints are consolidated to create a quarterly Service Performance Index which is being
monitored throughout time (Kafman, 2009). SIA sees an opportunity in every contact they make with
their customers, which allows them to keep track of reoccurring trends in order to co-create value
within its offerings.

As mentioned in FP5, one of the key challenges SIA has to face is the dilemma of providing
standardized service, to achieve consistency in delivering the brand image, while providing
personalized service, to meet specific customer needs (Wirtz et al., 2003). Much uncertainty is
perceived by customers when purchasing a service, due to intangibility of the service. Through the
brand image SIA has created consistency in excellent service standards; customers perceive lower risk
when making the decision to fly SIA. Due to the perception of lower risk SIA manages their
relationships with new and existing customers.

The well-managed relationship between customers and firm enables SIA to sustains its own customer
profile and thus maintain stable revenue. Selling again to the same customers is usually easier and less
costly than promoting to and earning new customers. Frequent flyers with SIA are well connected by
special messages, offerings and publications. Loyalty programs are manifested to manage customer
relationships. Frequent flyers with SIA are granted privileges as a member of PPS club, which
recognizes the customers’ status, reflects their personal taste and rewards them with the most
exclusive of travel experiences (Singapore Airlines Website, 2009). Extreme frequent flyers achieve an
elite Solitaire PPS status, with a greater selection of valuable privileges. The long term relationship is
not only less costly but also it creates positive word of mouth for attracting new customers.

RESOURCE INTEGRATION (FP9)

SIA has successfully created a value network through integrating the resources of economic and social
factors, such as suppliers, allies, partners and customers, thus putting it in a competitive position in
the premium airline industry.

As we have seen in the above premises, SIA co-creates value with their customers, who in turn co-
create value for those around them. SIA works closely with suppliers to provide its fleet with the
utmost luxury. For example, designers like Jean-Jacques Coste and James Park Associates fitting out
Suit Class (Singapore Airlines, 2009), and First Class (James Park Associates, 2006) in SIA's fleet. Using
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the operant resources of designers creates value for SIA as they are left to focus on their core
competencies, whilst outsourcing to their network. SIA also uses an online bidding system for dealing
with suppliers of Commercial Products, IT Products and Systems and Engineering Technology. This
system allows them to source the finest products from around the world at the best price (Singapore
Airlines, 2009). This e-procurement system creates value for customers by getting them the best
products. Benefits for SIA include minimization of costs by outsourcing specific resources to their
network. For its suppliers, SIA’s e-procurement offers a common technical platform, which is quicker
and easier to use.

SIA is a member of Star Alliance, a code-sharing partnership with over 20 airlines worldwide. Being a
member of Star Alliance has many benefits to SIA’s customers, including coordinated schedules,
access to more than 650 airport lounges and frequent flyer points (Star Alliance, 2007). Therefore,
SIA has created value by leveraging networks and partnerships co-create a value experience.

VALUE DETERMINATION (FP10)

The contextual nature of value creation is even more directly captured in this premise: “Value creation
is always uniquely and phenomenological determined by the beneficiary” (Vargo, 2008). This implies
that each customer has their own “supply chain”, in which value creation should be understood in the
context of a larger value-configuration.

According to Mr. Yap, (Wirtz et al., 2003) “it is important to realize that they are not just comparing
SIA with other airlines. They are comparing us against many industries and on many factors”. One of
the areas this is implemented is their food menu. For example, a local chicken dish is targeted to offer
the best dish not only compared to other airlines, but also being the best with comparison to the local
restaurants. By doing this SIA recognizes that customers will be making mental comparisons across
industries.

As noted before, SIA emphasizes customization, not only of personalized promotion, but also in-flight
catering. This is because each customer will be simultaneously developing different value of the same
offerings. To overcome such incidence, SIA stresses on the requirement of skills such as flexibility in
order to respond independently and immediately to different situations.

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 MANAGERIAL RECOMMENDATIONS

SIA has incorporated with Service-Dominant logic in their marketing strategies. Recommendations
will be based on how SIA can apply this logic to a further extent.

Firstly, potential problems associated with alliances and code-sharing require attention from SIA. SIA
code shares with other airlines such as Star Alliances members. This can have negative impacts as
Grossman (2006) discussed how a code-shared flight can cause confusion for customers when
checking in and also there are issues such as misplaced baggages. These problems passengers are
experiencing can cause brand dilution for SIA. Therefore a recommendation for SIA is to make sure
that their partner airline has the same standards, quality cabins and makes use of their operant
resources in the same way. This is because SIA strives to achieve consistency with the service they
offer, they cannot afford to have their reputation demolished for the liability of other airlines.

Secondly, demand for air travel slows down due to the recent economic recession; adjustment could
be carried out to improve overall performance. SIA could adopt cost cutting methods to enhance
efficiency. One recommendation is to streamline some of their backstage processes; this in turn cuts
tasks in the supply chain. In response to decline in demand, SIA could also ally with companies in the
travel industry to provide value-for-money promotional packages.

Thirdly, there are concerns in regards to food quality of SIA expressed in forums. The admirable
reputation which SIA already retained raises expectations of their customers. Although SIA food is
already top quality amongst the airline industry, customers expect similar standard in comparison to
the food industry. One recommendation is to outsource food in-flight to a local well-known restaurant.
Customers can choose their food from a proper restaurant menu at the point of purchase (i.e. at travel
agency, online etc.). Not only does it satisfy personalized customer needs, it is also capable of creating
the “WOW” effect, which aligns with SIA’s strategy to constantly exceed expectations. Price elasticity
of demand for SIA is low comparing to that of other competitors. Therefore a slight increase in price of
airfares will not have a big influence on customer demand. Customers can co-create value with SIA in
providing a better in-flight experience throughout.

CONCLUSION

SIA has successfully positioned itself as being one of the leaders in the industry because of its
emphasis on the service-dominant view, demands of customers, human resource development and
continuous innovation. After all, SIA has adopted a great extent of the Service-Dominant Logic because
they have recognized that customers are co-creators of value and operant resources are the
fundamentals to sustain their competitive advantage.
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 APPENDICES

MICRO-ENVIRONMENT ANALYSIS

PORTERS FIVE FORCES ANALYSIS

Represents the power between the different variables is.

Substitutes
Cars
Trains
Sea travel
Other premium airlines
Other cheaper airlines

Buyers Suppliers
Consumers after either Singapore Airlines Oil/ Fuel companies.
First class Industry: Service Aircraft Companies
Business class (airlines) Airports
Economy class Rivalry: Malay air, Food & Wine companies
Long Haul travelers Emirates Air, Cathay Entertainment
Air (technology)
“cut throat no-frills” Employees, pilots, cabin
crew, executive etc…

Threat of Entry
Startup costs
Establishment Costs
Brand Equity
Alliances
Resource ownership
Patents
Decreasing average
costs

Figure 1

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PESTE
Political/legal
•Continued liberalisation and open skies policies
•Privatisation of state owned enterprises (airlines)
•Reduced government regulations.
•Rising terrorism?
Economical
•Recession, a substantial decrease in air travel across the world, more specifically business class in the
Asia region as manufacturing dries up.
•Increased compitition from low fare airlines
•Increased oil prices
•Difficulty in determining demand and costs due to recession
Social
•People have more airline choices.
•Customers have become more sophisticated and demanding.
•Increased trend to travel and work abroad
•fear of air travel due to terrorism threats
•prestige
Technological
•Online ticketing
•SMSing
•Self-service (check in at airport)
Environmental
•People are in general concenrned about the environment and global warming, campaign around this
subject may yield good results.

Figure 2

SWOT ANALYSIS

Strengths Opportunities

Service centered strategies. Attract customers from

Brand Equity. other airlines.
Low staff costs. More promotional packages
Young aircraft fleet. (recession)
Master of innovation.

Weaknesses Threats

High prices Recession

High customer expectation Abandonment of
First/business class.
(sensitivity to service
Saturated market.
failure)

Figure 3
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SIA RESOURCES

Tangible resources Intangible resources

(Operand) (Operant)

Air crafts Experience

On-board technology Skills and knowledge
Food and Wine Staff expertise
Seating Innovation team

Common Rare
Imitable Hard to imitable
Core competencies
Easily substituted Valuable &
Often taken for granted Hard to substitute Sustainable
by consumers Highly valued by competitive
consumers advantage

Figure 4

ALLIANCES AND ACQUISITIONS

Figure 5
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SIA POSITIONING

Singapore Airlines

Cathay Pacific Emirates

Global
British Airways

Geographic
Scope

Easy Jet

Ryanair Air Charter

Southwest Hooters Air

Regional
Airlines

Low Cost Positioning Differentiation

Figure 6

Diagram adopted from Heracleous, Wirtz, and Pangarkar (2006)

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