Introduction to Management on the Company Singapore Airlines (Research Paper Sample)

Singapore Airlines
Name
Institution
Abstract
Singapore Airlines is one of the strongest airline industry’s the world has ever had. Its origin dates back to the year 1947 when it operated as just a regional carrier. The industry is affected by social, political, legal, economic and technological factors in its daily operations, which it must overcome to compete fairly with its rivals. There are also threats that the Singapore Airlines faces in its search to be the best in the aviation industry which include: the threats of new entrants to the market; the competitive rivalry within an industry; the threat of substitute product or services; the bargaining power of suppliers and the bargaining power of consumers. The management recommendations for the sector to remain on top include partnering with others, keeping an eye to the external environmental forces, employing qualified employees, pricing and advertising of their products.
Singapore Airlines
Singapore Airlines has transformed to be one of the world’s preeminent passenger and cargo carriers. The company has a contemporary and young fleet of aircraft that travel in almost every part of the world. Their home base, Changi Airport is always voted the best in Asia and the world. Singapore Airlines had come from a humble origin dating back from the year 1947 when it was still just an ordinary regional airline. The first operation was when a twin-engine Airspeed Consul started its operation between Singapore, Kuala, Lumpur, Penang, and Ipoh. It led to a higher passenger demand in the region, and so did the latter-day airline.
With the creation of the Federation of Malaysia in 1963, the industry changed its name first to Malaysian Airways and later on to Malaysian-Singapore Airlines (MSA). By the year 1972, MSA halted its operations, and it led to the birth of two new Airlines, Malaysian and Singapore Airlines. Singapore Airlines soon expanded and upgraded its fleet to be the world’s best. It mainly deals with passenger and cargo transportation to various parts of the world. With proper planning, innovation and investment, it has become one of the world’s profits making Airlines.
Singapore Airline industry is affected by some factors in its daily operations ranging right from political, social, economic, technological environmental and legal factors. Each of these constituents contributes to the success of the industry. The Airline is the pride of Singapore and carries an international presence but has its focus in the Australasian and Asian markets. Singapore as a country is known for success even in other sectors of the economy like pharmaceutical and petroleum refining thus offering a fertile ground for the prosperity of the Airline.
Political
The Singapore Airline industry is operated in a severely regulated political environment. The industry always favors the passengers to airlines, and that is one of the major contributions to its rapid growth. Passenger safety is supreme and can bargain for the prices and amenities. The industry has taken into account the political factors in Singapore and other courtiers’ markets, and that is the primary reason for their expansion globally. The Singapore government also offers huge support to the industry regarding tax and fuel as it is the principal shareholder of the Airline (Scott, 2005).
The government of Singapore offers favorable taxes than most countries enabling the airline make more profit compared to other airlines. The Singapore’s aviation government regulations are taken into consideration by the industry while trying to expand their operations overseas thus avoiding every little risk that might occur on their way. For instance, the Airline withdrew its bid for a stake in Air India due to India’s political barrier.
Economic
Airlines work across different economic boundaries which make them subject to the national and international economic peculiarities. The increase in fuel costs has affected the growth of the industry. There is a decline of passengers in the Airline industry in general due to the recent disappearance of the Malaysian Airline. The emergence of cheap airlines and have become a threat to the industry forcing them to lower prices due to competition. There are high labor demand and maintenance costs in the industry to avoid minor accidents and to maintain a good profile.
Social
Over the past decades, air travel was considered to be something just for the wealthy. But recently things have changed, and many are now in a position to afford the flights. There has been a shift in consumer preferences with the emergence of low-cost carriers again forcing Singapore Airlines with no choice but to enter the same market. It led the company to increase its shareholdings to the low-cost carrier Tiger air of Southeast Asia despite the fact that it offers no reasonable profit. The business class passengers have somehow reduced with the rise of improved communication facilities making no need to attend meetings.
Technological
Singapore Airlines have advanced technologically not only for comfort purposes but also to signify security for passengers. It has one of the modern fleets that have the latest innovations with seatback entertainment systems, reclining seats and headsets. The airline manufacturers carry out thorough research so as to come up with modern fleets to improve their sales. Customers are very trendy and only go for the technologically improved flights which they also see as safer compared to the old models. Through advanced technology, the industry as remained to be the best in the world. In fact, Singapore Airlines was the first to introduce the largest commercial plane A380 and also to apply Microsystems in the sky.
Environmental
Singapore Airline has taken into account the environmental preservation and is doing everything possible to reduce global warming. The industry trains its staff to be environmentally responsible wherever applicable in their daily duties. The industry plans to introduce aircraft that does not produce much carbon dioxide that always leads to environmental degradation. There is also a plan to reduce the sound pollution generated by the planes by using efficient fuel and doing away with old apparatus. Airlines are always affected by changes to the regulatory framework, especially the national carriers. There are different forms of governance and politics which significantly affects the aviation industry.
Michael Porter was an American economist from Harvard Business School and was born in the year 1947. He came up with five factors which he claimed affected the functioning of a company within its market boundaries. They included: the threats of new entrants to the market; the competitive rivalry within an industry; the threat of substitute product or services; the bargaining power of suppliers and the bargaining power of consumers (Alan, 2013). The success of a company in a market is easily predicted by analysis of these factors by strategists. So this is how the factors apply to the Singapore Airline.
Threat of new entrants
The airline industry is still having a weak probability of new players even though there was a relaxation of the sky rules in 2010. The high operating cost such as the cost of planes, airport slots for landing and taking off has made it quite impossible for more airline industries to rise. That has favored the rapid growth of the Singapore Airlines over the years. The production gets support from the Singapore government, and only the Civil Authority can offer the registration of any new similar industry. Also, the government can not disclose its operational procedures to any new firm, so they are bound to fail due to lack of experience in the sector.
Competitive rivalry within an industry
There is a big competition within the Singapore Airline industry due to its market strength. The merging confederations in global airline industries in America and Europe led to the reduction of prices which forced the Singapore Airline industry to follow suit. The major revenue of Singapore Airlines is from passengers, but at times the airplanes go with some seats unsold which cause a great loss to the firm. Lack of diversity puts more pressure on the industry as it faces stiff competition from other airline organizations
Threats of substitute products or services
The threat of substitute goods or services to the Singapore Airline industry is comparatively moderate. Globalization has made other means of transportation to be preferred by people due to their convenience and is becoming options for air transport. Many people use marine or road services for short distance journey for instance between Singapore and Indonesia. With the invention of an electric train, the industry might face stiff competition from rail transportation in the future. The improvement of means of communications such as video chat via Skype or IMO poses a threat to the industry as the majority can discuss freely without necessarily meeting face to face especially in business.
Bargaining power of suppliers
Globally, there are only two companies that supply airplanes, and they are Airbus and Boeing. So it becomes very hard to bargain on such grounds as they have high bargaining power compared to the buyers who have no choice but to comply with the suppliers (Teresa, 2014). So the Singapore Airline faces such challenges when going for the new airplanes, something that is not common with other forms of transportation. Unless other aircraft manufacturing companies arise to offer stiff competition, the problem will remain unsolved by the industry. But the Canada’s Bombardier is expected to become the largest C Series customer and will bring an end to the Airbus a...