Singapore International Airlines

What should the company do to sustain service differentiation if they plan to expand global/ regional/ local?

Singapore International Airlines (SIA) is known for it’s in flight services, flight performance and progressive performance in strategy development which nourishes a significant source of competitive advantage but their best strength is its high end services and global routes.  This strength can easily be imitated by their competitors.

SIA had low cost competitors and customers were attracted to low fares. Hence, the company is facing dramatic environmental shifts, increasing competition, and changing customer demand. Singapore has a very low unemployment rate, this lead to difficultly in supplying high quality labor at low prices.

To sustain service differentiation,  if SIA planned to expand regionally they could open an operating hub at the Asia pacific region, where labor rate per unit is lower, at better labor productivity .With improving economic condition of Asia pacific the demand for the air carrier is growing, hence SIA can increase the  frequency of flight.

SIA planned to expand globally by investing in Virgin Atlantic –a British airline which has almost 36 destinations worldwide. This allowed the SIA to operate its aircraft on Trans Atlantic sector between US and UK and also the landing slot at the Heathrow airport.

SIA should continue to maintain good flight performance, in flight services and training of cabin crews or engineer to sustain service differentiation in local. Connecting with star alliance would help in increasing its profits, improve the economies of scale and connect it to sectors which it may not access to.

Contributed by:-

Rahul Budhia

Section A

Strategic Management