Page 2: SWOT analysis
SIA initially needed to carry out an analysis of its operating environment. The traditional business tool for doing this is a SWOT analysis (strengths, weaknesses, opportunities and threats). The strengths and weaknesses are factors internal to the organisation.
Strengths and weaknesses
SIA’s key strength lies in the location of Singapore as an important crossroad of the world. Singapore is a relatively small country which has been one of the economic success stories of the last 25 years. As with other South-East Asian economies Singapore’s success lies in the strong trading links that the country has developed in the global economy. As a former British colony which gained independence in 1965, it had to market its services globally to be successful.
In its early days the airline was much smaller than its rivals. This was a major internal weakness. SIA, as the national airline, was faced with an intensely competitive global market in which the big players like British Airways operated on many routes with large fleets of aircraft. Until recently many countries have restricted access to air routes and airports in order to protect their national airlines against foreign competition.
Today all this is changing, as, along with many other areas of international trade, there is strong pressure to open up markets and allow greater competition. However, in the early years SIA had to work very hard to secure the right of access to many important countries and airports. It took many years of struggle to achieve landing rights at Heathrow, followed by Manchester. Most recently SIA is seeking access to transatlantic routes from the UK.
SIA is committed to the notion of 'open skies', i.e. open access of routes to airlines with the consumer deciding with whom he or she wants to fly. It continues to be a bone of contention for SIA that while Singapore has opened its own airport to other airlines, SIA is still restricted from access to other routes, e.g. transatlantic.
Opportunities and threats
The main opportunity facing SIA was the rapid growth in air transport for both passenger and cargo. Today the globe is a much smaller place, people can move rapidly from one continent to another in a matter of hours and more people have the disposable income to afford this. However, there are threats to an airline like SIA from the major national carriers of much larger countries, and restrictive regulation of air routes.
The SIA Group is Singapore’s largest private sector employer with a 28,000 strong workforce. The airline is committed to the development of its human resources. The airline has been able to develop its distinctive competitive edge in customer service through its people. From an early date SIA recognised the importance of customer service in gaining and retaining customer loyalty. SIA has always placed great emphasis on quality training for staff, which has established its cabin crew as the 'hallmark' of efficiency and customer service. This has led to greater competitive advantage.