Should
the company go global/regional/local? Why?
Singapore International Airline (SIA) is one of the leading airlines in
the international industry and is facing several competitive issues.
Post
liberalization era, the players had to differentiate to get the market share.
Singapore Airlines differentiated themselves by providing economy class meals,
top-of-the-line technology, comfortable seating, effective staff, good
maintenance etc. Their main point of difference was the ownership of the Changi
Airport. These resources made Singapore Airlines’ operations inimitable.
There are
certain region specific factors also contributing to its success -
·
The Singaporeans had high standard of living and hence higher
disposable income.
·
The labor costs were also lower compared to that in US/Europe
·
People in Singapore have
a higher literacy rate.
·
They have had exceptional hospitality skills and work ethics.
Thus, we can infer that most of the advantages arise as a result of its
region. If Singapore Airlines goes for alliances, there is a high risk of its
image getting tarnished. There could be differences between the services
offered by Singapore Airlines and other airlines. The other airlines won’t have
the same quality of hospitality and work ethics as shown by Singapore Airlines.
This could be a cause of displeasure for the customers. Also, if the other
airlines do not live up to the standards of Singapore Airlines, their image
could be lost which could hit hard on its revenues. Hence, it will be
profitable for them to cash their regional advantage than taking risk by going
global.
Contributed by:-
Hari Krishnan
Section B
Strategic Management
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