The Singapore Airlines Group February 10, 2011

rd
BA 236 Global Marketing – Prof. Benjie Sandoval 3 Trimester 2010-11
De Leon, Estanislao, Gumabon, Lope, Rojas, Ronquillo
Page 1 of 4

I. PROBLEM

What strategy should the Singapore Airlines Group (SAG) adopt to sustain its growth and
financial performance in light of the challenges in the global airline and airline-related industries?

II. ASSUMPTIONS

The group assumed that SAG will adopt a strategy that plays on its inherent strengths to minimize
risks over the short-run while investing prudently for long-term growth and sustainability.

III. POINT OF VIEW

This report will take the perspective of senior management of SAG with our recommendations
dealing mainly on the strategic initiatives that the company may choose to deploy to manage short-
term issues as well as long-term plans for growth.

IV. ANALYSIS

SWOT ANALYSIS

S-O Strategy

• SAG should use its financial and marketing strength to expand its market share while its
competitors are being hit hard financially and may be unable to counteract adequately.
• SAG should continue to seek out applications of new technology for its operations and in the
services it offers. SAG should continue to play on its reputation as an innovation leader.
The Singapore Airlines Group February 10, 2011
rd
BA 236 Global Marketing – Prof. Benjie Sandoval 3 Trimester 2010-11
De Leon, Estanislao, Gumabon, Lope, Rojas, Ronquillo
Page 2 of 4

S-T Strategy

• Being financially sound means that SAG is better able to weather the economic storm than
most of its competitors. Furthermore, SAG should use its financial strength to aggressively
fight back competitors like Thai Airways or Cathay Pacific.

W-O Strategy

• Now is not the time to incur additional risks by investing in related, but maybe non-core
businesses. SAG should do a deep analysis of its other holdings and business units. It
should diversify losing units while carefully investing in its core businesses.
• SAG should focus more on marketing its more visible offering and further reinforce its
reputation for service and innovation.

W-T Strategy

• SAG should pick its battles – it must only compete in areas it has better than average chance
of winning. This means sticking closely to its businesses within its core-competencies

PEST Analysis

From the SWOT analysis we see SAG as an inherently strong company with very good
fundamentals especially in marketing and finance. What might undo these inherent strengths would
be external factors that may be beyond the control of the company. This is especially true for SAG
which does not have a local market to fall on and from the start had to compete on a global scale.
Hence the group decided to do an environment scan of the global airline industry in general to further
analyse the external factors (threats and opportunities) facing SAG. We used the PEST Analysis
framework for this purpose.
The Singapore Airlines Group February 10, 2011
rd
BA 236 Global Marketing – Prof. Benjie Sandoval 3 Trimester 2010-11
De Leon, Estanislao, Gumabon, Lope, Rojas, Ronquillo
Page 3 of 4

Porter’s Five-Forces Framework

To round-off our analysis, we also decided to use Porter’s Five Forces model to analyse the
competitive pressures in the industry where SAG competes in.
The Singapore Airlines Group February 10, 2011
rd
BA 236 Global Marketing – Prof. Benjie Sandoval 3 Trimester 2010-11
De Leon, Estanislao, Gumabon, Lope, Rojas, Ronquillo
Page 4 of 4

From the five-forces analysis, we can see that the threat of substitutes in the form of
competing airlines is very high especially in times of economic downturns and security uncertainties.
The bargaining powers of customers also become a significant challenge to SAG as long as these
global issues persist.

RECOMMENDATIONS:

SAG can count on its management and financial strength to whether the downturns in the
global air travel market. The group thinks that these conditions are temporary. As a matter of
necessity, human development will inevitably ensure the volume of air travel will continue to grow in
the long run. SAG must therefore position itself to be ready to take the initiative if and when the
conditions become right again.

The present market condition affords SAG the chance to use its marketing savvy to better
position the business, underpin its image with consumers. In this aspect, SAG must aggressively
pursue opportunities to gain more market share. However, we also think that SAG must concentrate
only on areas where its core-competencies in marketing will give it the upper hand over the
competition.

It can strengthen its low budget unit (Silk Air) so that it can continue to cater and expand into
the budget/tourist/leisure travel sector. It can mitigate the negative image brought about by the crash
of one of its Silk Air planes by employing clever PR tactics.

Furthermore, high valued investments could be put in halt in the meantime until the economic
conditions start to normalize. As mentioned in the SWOT analysis, SAG should rather focus more on
keeping their image of having high quality service. It would also need to continue to invest in its
image as a technology and service leader even through the current economic challenges. The
economic downturn, in effect would cause more business travels to countries with low cost such as in
Asia as companies more and more think leveraging these countries by outsourcing their business. For
example, SAG might want to look at the possibility of spinning of its in-flight catering arm. This is a
business unit that could be considered non-core. On the other hand it can continue to retain its cargo
unit as well as its engineering company as these two businesses complement its airline operations.

With SAG having the right focus, championing quality service, business leaders who might be
flying more frequently would definitely choose them over their competitors.