Singapore Airlines

 Singapore Flight companies Essay


Asia's premier company

successfully completes a dual

strategy: It provides world-class

support and is an expense leader.

Singapore Airlines'

Balancing Act

by simply Loizos Heracleous and Jochen Wirtz


Reprint R1007P

Asia's premier carrier successfully executes a dual technique: It offers world-class service and it is a cost innovator.


Singapore Airlines'

Handling Act


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 • july–august 2010

entiation—which it look for through assistance

excellence and continuous innovation—and

cost command. Few businesses have executed a dual strategy profitably; 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 figure away how to pick up opportunities in the middle and the weak

of the market. Moreover, international corporations encounter competition via rivals— some of them from emerging markets—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 •• •T 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

debt, and...