Asia's premier company
successfully completes a dual
strategy: It provides world-class
support and is an expense leader.
by simply Loizos Heracleous and Jochen Wirtz
Asia's premier carrier successfully executes a dual technique: It offers world-class service and it is a cost innovator.
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by Loizos Heracleous and Jochen Wirtz
There's something about Singapore Airlines.
Over the past 4 decades, it includes earned a stellar reputation in the п¬Ѓercely competitive commercial aviation organization by providing customers with superior quality service and dominating the business-travel segments. SIA has won the
World's Greatest Airline prize from CondГ© Nast
Tourist 21 out of your 22 instances it has been
awarded and Skytrax's Airline with the Year
merit three times within the last decade.
What's not so popular is that in spite of the
quality of its services, SIA is additionally one of the industry's most budget-friendly operators. Via 2001 to 2009, the costs every available seat kilometer (ASK) were just 4. 58 cents. In respect to a 3 years ago International Air Transport Association
study, costs for full-service European flight companies
were almost eight to sixteen cents, pertaining to U. T. airlines 7 to 8 cents,
and for Asian air carriers 5 to 7 pennies. In fact , SIA
had cut costs than the majority of European and
American budget carriers, which usually ranged from
some to 8 cents and 5 to 6 cents respectively.
It's intriguing that SIA has put together the
allegedly incompatible strategies of differ-
harvard business review вЂў julyвЂ“august 2010
entiationвЂ”which it look for through assistance
excellence and continuous innovationвЂ”and
cost command. Few businesses have executed a dual strategy proп¬Ѓtably; indeed, administration experts such as Michael Porter argue that you will never do so for any sustained period since dual strategies include contradictory assets and organizational processes. However pursuing dual strategies is starting to become an essential. The demand for valuefor-money products and services has raised since the latest recession, especially in produced countries, so even suppliers of premium offerings need to п¬Ѓgure away how to pick up opportunities in the middle and the weak
of the market. Moreover, international corporations encounter competition via rivalsвЂ” some of them from emerging marketsвЂ”that
use new solutions and business models to
provide good-enough offerings by attractive
rates. Incumbents can п¬Ѓght back again by trimming
prices or perhaps further distinguishing products and
services, but it has been a burning off battle. Value
wars commonly hurt market leaders more than they actually
page one particular
Singapore Airlines' Balancing Act вЂўвЂў вЂўT HE G LOBE
challengers, and constant differentiation can be
tough to support. Adopting a dual approach is
usually the only choice.
Our research suggests that dual strategies
will be embraced more readily in Asian countries.
Various Western executives believe that, for example, cost leadership and differentiation, globalization and localization, and size and agility are fundamentally contradictory and cannot be
reconciled. Yet SIA and also other companies this sort of
as Banyan Tree, Haier, Samsung, and Toyota
work as though the dualities will be opposites
that comprise a whole; that may be, they enhance, instead of contradicting, each other. By doing this of thinking is embedded in Asian
thought; the concept of yin and yang in Taoist
viewpoint, for instance, encapsulates the idea.
To be certain, pursuing two strategies will result
in organizational paradoxes, but executives in
Markets from the asian continent tend to realize that opposing observations present the complete picture and develop procedures to manage they are all. No company executes a dual strategy better
than SIA. The airline has delivered healthy п¬Ѓnancial returns as its founding, 39 years ago, never posting an annual loss. It has almost no