Regional Integration / Geopolitics Assignment (SWOT Analysis) (Essay Sample)

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Regional Integration / Geopolitics Assignment
SWOT Analysis
A SWOT analysis is critical in enabling a company to recognize the Advantages and disadvantages that exist within the company’s organization (Strengths and Weakness) and outside of it, in the external environment (opportunities and Threats). The ability to develop a complete vigilance of the company’s situation is critical to both decision-making and strategic planning. In essence, performing a SWOT analysis should be done before setting an objective for the corporate entity, this is mainly because it would allow achievable goals or objectives to be set for the organization (Miller, Vandome, & McBrewster 23).
Singapore Airline is one of the largest and highly recognized airlines in the world and it is one of the main East Asian has flights practicing across most of the well-known places of Asia like Hong Kong, Japan, Malaysia, Thailand and China.  In the following paragraphs, a SWOT analysis will be identified dentally.
Strength of Singapore Airline:
Enjoys a Robust Hub in Singapore
First airline to provide clients with hot and alcoholic meals
It has the youngest fleet of aircraft of airline industry.
Acknowledged for its top and excellent service and supreme customer service and hospitality.
Through first-rate branding and marketing Singapore Airlines has evolved to become one of the top airlines in the world.
One of the top airline brands in terms of market capitalization and number of passengers carried.
Singapore Airlines flies to over 60 destinations in nearly 35 countries across the 6 regions (including two longest non-stop commercial flights).
Satisfied Customer Base and Desired Airline of Passengers.
Singapore Airline enjoys strong support from the Singapore Government
Weakness of Singapore Airline
Through cutting of wages and minimum sizing in bad economic conditions, and in the effort of maintaining low expenditure, the company’s relationship between labor union and management has been destructed.
Singapore Airline is considered as one of the most expensive airlines in the region hence unaffordable by many.
The company’s market share is significantly low owing to increased competition in the airline industry.
The company heavily depends on international traffic.
Turnover ratio has been reduced since Singapore Airline has been maintaining a good financial performance these few years.
Singapore Airline suffers from an unbalanced portfolio.
Opportunities of Singapore Airline
The company has the opportunity to acquire state of the art fleet to improve customer confidence
Can inspire the outstanding hub which it has created in Singapore
More international destinations to leverage on its high charge brand image
Offer the most inclusive and scrupulous training program to staffs to ensure brand experience and suitability.
In order to create interest and awareness in the market, the company can plan and develop marketing strategies in its growth areas where it can attract new customers.
Singapore Airlines has an enormous opportunity to increase its market base by expanding across Middle East, India and China.
Threats to Singapore Airline
Intense competition arising from increase in the number of market players such as Cathay Pacific, Qantas, Thai Airline and China Southern Airline)
Should go for low cost flights.
High cost of the airline ticket prices as a result of the increasing operational costs.
Fuel cost raised.
Five Force Analyses
Airlines have struggled throughout 2008 amid a cocktail of soaring fuel prices, slowing consumer demand and the impact of the credit crisis on bank liquidity. More than 30 airlines have collapsed around the world, including business class-only airline Silverjet SILJ.L and travel giant XL in the UK. Although the oil prices dropped down in third quarter 2008, airline bankruptcies around the world are set to rise over the winter. The crisis has had severe impact on suppliers like B/E Aerospace, the world's biggest supplier of plane seats due to a lack of demand. Nevertheless the airline industry in Singapore is characterized by strong supplier power; a consequence of the global duopoly of Boeing and Airbus that exists in the manufacture of aircraft globally and the fact that, as yet, no viable substitute for jet fuel has been discovered.
The air industry in Singapore has been deregulated to a certain extent, which makes it more attractive for new entrants, although the bureaucracy and large financial outlay involved in setting up an airline serve as a deterrent to new companies. The desire for relatively fast international travel means that other forms of transport pose no more than a moderate threat to air travel.
Impact of the regional economic and geopolitical issues on the company’s performance
The political tension that has gripped counties in this region has negatively impacted the economic performance of the regional based industries and in particular Singapore Airlines. in the year 2013, Singapore Airlines made a bid for a 24% stake on China Eastern Airlines as part of its expansion strategy. However, this bid was turned down by minority shareholders a move that was understood to be politically instigated. According to the International Herald Tribune, Air China blocked Singapore Airline’s bid to buy Eastern China in a political manoeuvre that further led to a complete shake up in the CAAC. This characterized an extraordinary game of politics that impacted on the Chinese aviation industry that saw Air China successfully overturning Singapore Airlines bid to buy into China Eastern Airlines (Institute of Southeast Asian Studies 12).
Furthermore, the the Association of South East Asian Nations Senior Transport Officials
Meeting (ASEAN-STOM) entered into a memorandum of understanding on November 2009 that aims to endorse a multilateral agreement on the complete liberalization of air freight services. The greater plan is to create a unified transport network that traverses and links the member states in addition to ensuring ensure competitive and efficient competitive international air freight services. This is believed to promote economic growth in the region. Singapore Airlines is known be a significant beneficiary to this and previous policies on the liberalization of air services making the company one of the largest as far as the transportation of international capacity and the promotion of Singapore as a transit hub for the ASEAN region is concerned.
It is therefore plausible to state that although the geopolitics in the ASEAN region has posed challenges to the company especially in terms of successfully executing its growth strategy, the regional membership has in overall worked to positively impact the company’s performance. This is as indicated by the financial performance of the company presented below (Siddique, and Kumar 24).
Profitability
There are three main ratios that are used to identify a company’s profitability. These are: Sales growth, Profit margins, and Return on capital employed. The table below shows the ratios that are related to profitability:
Profitability Ratios Year End 2012 2011 2010 2009 Ratio #1: Sales Growth Rate SIA 2.3% 14.3% -20.6% 0.15% Ind Av0.99% 9.9% 33.7% -22.63% Ratio #2: Profit Margins Operating margin SIA 1.9% 8.8% 0.5% 5.6% Ind Av1.8% 5.6% 15.7% 8.6% Net margin SIA 2.7% 7.9% 2.2% 7.2% Ind Av 1.1% 5.8% 15.9% 7.3% Ratio #3: Return on Capital Employed SIA 1.7% 6.9% 0.4% 4.8% Ind Av1.6% 5.9% 16.2% 7.3% 
Sales Growth
Singapore Airlines has been able to achieve significant growth in sales. This is despite of suffering from slim of sales that characterized the entire airline industry and consequent decrease in growth rate. This is indicative of the effectiveness and suitability of the company’s competitive strategies in terms of aligning with its current position. In addition, the company’s revenue in the year 2012 remained lower in comparison to that achieved in 2009. This was as a result of the overall rebounding in the airline industry since 2010. In essence, this indicates that the company was able to gain a remarkable net profit that amounted to 1.15 billion SGD from April 2008 (Y/E 2008) to March 2009 (Y/E 2009) whereby at this time, the airline industry was still facing losses to the tune of negative 1.15 billion SGD from April 2008 (Y/E 2008) to March 2009 (Y/E 2009). However, during this time, Singapore Airlines was undergoing a slowdown that indicated an increase by 34.5% from the financial year 2011 to financial year 2012 of net profit. Important to note is that during this time, the industry average was going up by 43.75% in 2011. This is therefore indicative that Singapore Airlines is minimally impacted by the industrial growth (Singapore Airlines, Ltd., 2010).
Profit Margins
Although Singapore Airlines performed better in comparison to other major players within its industry, the company’s margins have been highly volatile for the past four financial years. This has been mainly caused by the company’s significantly low turnover. As the price of fuel increased significantly from 2008 and 2009 and further aggravated by the harsh economic environment as a result of the 2007 global financial crisis, the company therefore faced an unavoidable operating expense thereby leading to load factor and consequently low turnover. This had the adverse impact of hurting the company’s economies of scale and consequently providing the company with a cost...