Success in Companies: The Case Study of Singapore Airlines
Introduction
Strategic management and leadership can be conceptualized as the potential and capability of an organization’s leadership to express and implement strategic visions for the entity. It can also be said to be the leadership’s ability to lead their organization to success. A company may be considered as successful if it remains profitable in its operations amidst strong competition (Johnson et al. 2011).
This section of the paper will focus on Singapore Airline, a company that has seen tremendous growth in the recent past. The author of this paper will utilize two framework strategies to analyse the company. These are the competitive strategies framework and the value-chain strategies framework.
The Success of Singapore Airlines
Singapore Airlines is one of the most profitable airlines in the world today. The company has earned several awards as the World’s Best Airline over the past decade. It has taken advantage of the value chain to dominate the market.
Singapore Airlines enjoys a large market share in the aviation industry and has signed many agreements such as the ‘open skies’ policy with different nations in the world. One such nation is the United States of America (Gill 2006: p. 24).
Possible Reasons for Singapore Airlines’ Success
The profitability of this company can be attributed to its application of sound competitive and value chain strategies in its operations. The 5ps’ framework has been used to assess the factors contributing to the Airline’s success. The framework puts into consideration elements such as purpose, principle, process, people and performance.
The Singapore Airline takes advantage of its efficient performance such as its relatively low operating costs to strongly compete with other players in the industry (Brooks et al. 2011).
High revenues accrued from the operations enables the company to purchase new and more efficient equipments which are also cost effective. New generation equipment leads to low fuel as well as low maintenance costs since they are less prone to damages. This success has been achieved after years of effective operation strategies.
The success of Singapore Airlines is also evident in the company’s efforts to increase its size. The company has embarked on an ambitious plan to purchase new equipments to extend its operations. The Airline has made provision of quality aviation services its purpose thus its ability to offer its services to customers from destinations around the world.
Steady population growth in Asian countries has facilitated the expansion of the airline’s handling capacity in terms of increased number of aircrafts as well as increased flights to cater for the growing demand (De Wit & Meyer 2010).
To emerge as one of the leading airlines in the global aviation industry, Singapore Airlines has adopted a competitive strategy in its operations coupled with ideal value chain strategies in the process. The exploitation of distant markets such as that of the United States of America has been one of the major factors contributing to the attainment of success in the company.
Competitive strategy characterized by activities such as the signing of the ‘Open Skies’ policy to push competitors out of the market as well as enhance the control of a large market in the aviation industry have been significant to the success of the Airline (Jeffs 2008: p. 46). The airlines’ management team acknowledges the fact that Singapore is a small country with a small population.
A favourable near environment has also been a major factor contributing to the success of Singapore Airlines. By formulating and successfully implementing value chain strategies, Singapore Airlines has been able to win over the trust of customers in the industry giving the Airline a lead in the business (Mintzberg et al. 2009).
Effective leadership principles have also contributed to the success of the airline. The company’s success can be attributed to sound decisions made or taken by the management. A competitive strategy analysis on the airline reveals it has adopted aggressive measures such as the introduction of alternative means of capital generation to maintain a lead in the aviation industry (Stacey 2011: p. 36).
The Singapore Airlines has ventured into related sectors such as aircraft leasing and aviation engineering. This provides alternative sources of capital as well as helping in reducing operation costs since the airline is self sufficient.
Keenness in the study of market patterns is also a major contributing factor to the success of the Airlines. A better understanding of the market structure and opportunities has enabled the management to adequately plan for future changes in advance (Balogun & Hailey 2007).
It is through the application of such competitive strategies that the Airline has been keen on expanding its destinations to cater for the rising demand for aviation services. This has seen the company set up over 80 international destinations.
How Special is Singapore Airlines?
The success of the Airlines can be attributed to its uniqueness. This comprises of various strategies and opportunities exploited to suit the company and to boost its performance. These strategies aim at adapting the airline to the market and cushioning it against internal and external factors that may be injurious to its operations.
The VRIN framework will be used to explore these special aspects relating to the Airlines. The framework states that for a company to achieve competitive advantage its resources must be valuable, rare, inimitable and non-substitutable.
Singapore Airlines’ brand is considered as a special one in the industry and is inimitable. One may describe the airlines’ brand as one of the best in the industry. For the past three decades, the use of the slogan “Singapore girl you’re a great way to fly!” has been a mark of the airlines’ quality brand.
The provision of quality services such as comfortable first class suites and complimentary gifts to passengers at various levels has been an important marketing strategy (Pertusa et al. 2009). The airline has also invested in the training of flight attendants to ensure that high quality services are offered.
This ensures that the airline maintains its market share in the aviation industry. This is an indication of the competitive strategy adopted by the management. This commitment to quality has helped the airline scoop numerous awards in the aviation industry.
Unlike other airlines, Singapore Airlines uses the airbus to ferry its passengers making its services unique. A value chain analysis will reveal that the desire of the management is to offer services which are superior to those offered by the competitors. The introduction of the airbus in the year 2007 enabled the airline to ferry close to 455 passengers at a go.
The introduction of the airbus also saw the commencement of direct flights from Singapore to the United States of America. The airline is different from the competitors given the fact that only a few airlines offer long distance direct flights (Lee & Lee 2007).
Individuals faced with emergencies are likely to prefer this airline as opposed to others. The airbus is also cost effective given that many people are ferried at once while the airline incurs almost fixed operation costs.
Singapore Airlines is also unique in that it has ventured into other aviation related sectors that are of value to the company. From a competitive strategy perspective, it appears that the airline is capable of adopting offensive strategies against its competitors (Bartlett & Ghoshal 2000).
By venturing into sectors such as aircraft leasing as well as aviation engineering, the company is assured of a constant flow of capital even during tough economic times. As a result of this, the airline is also able to cut down on operation costs since the management runs a self sufficient system. Maintenance of aircrafts is done internally. The company can also rely on its trained personnel.
Unlike other companies, Singapore Airlines owns a large fleet of aircrafts that are of great value to its operations. These aircrafts are replaced after four to five years of service. A value chain strategy analysis reveals that the Airline would increase its profits from this since the new aircrafts will help it maintain a competitive edge in terms of promoting the brand as well as reducing maintenance costs (Barney 1991).
New aircrafts will also reduce fuel costs since they are more efficient. This practice also helps in marketing the airline thus enabling the company to maintain a huge market share. Singapore Airlines owns close to a hundred aircrafts.
Strategies to Maintain Success in Singapore Airline
To remain competitive and successful in the aviation industry, it is important that Singapore Airlines pursue more “Open Skies” treaties in an attempt to increase its destinations.
The airline should through the Singapore government or its own ambassadors embark on a campaign to lobby as many countries as possible to sign the “Open Skies” agreements allowing them to operate freely in their airspace. This will significantly raise the airline’s market share since more destinations will be created (Eisenhardt & Zbaracki 1992).
Singapore Airlines should also establish long distance routes with the aid of the new airbus technology. From a competitive strategy perspective, establishment of these routes will help the Airline dominate the airbus technology before the entry of competitors.
This strategy will ensure that the airline effectively establishes guerrilla strategies to neutralize competition from other key industry players and in turn give the company full control over the technology (Greiner 1998).
Great emphasis should also be put on the brand name as well as the provision of high quality services. Value chain strategy analysis indicates that a company’s reputation is of great value in business. Singapore Airlines should therefore strive to market its brand of quality far and wide (Hendry 2000).
To remain competitive, Singapore Airlines should also aim at maintaining innovative and complementary products. These products are aimed at enticing customers, persuading them to use the services in future.
From a competitive strategy perspective, the airline can take advantage of its large scale operations to fully include complementary rewards for the customers without incurring additional costs as a result of economies of scale (Hofstede 1988).
Singapore Airlines should also support the Star Alliance to improve service delivery. By being a member of this organization, the Airline should support its activities.
Customer satisfaction should be prioritised so as to maintain the already existing market share for the airline as well as attracting new customers (Johnson 2000). Based on the competitive strategy analysis, it appears that Singapore Airlines (being a large and influential organization) is likely to reap benefits by joining such organizations.
The organization should also improve its engineering and freight facilities. This should include activities such as the extension of landing grounds to cater for the rising demand. Being a significant player in the aviation industry, the airline can adopt a value chain strategy to easily dominate the market (Mintzberg 1994).
Failure in Companies: A Case Study of Motorola Company and RIM
Failure in Companies
The Smartphone industry is one of the fastest growing industries in the world. Failure has however been a common phenomenon in this industry which has been blamed on cut throat competition among the players.
Failure in most companies can be attributed to poor management and leadership skills (Porter 1979). Such poor strategies have led to dismal performance in giant companies such as Motorola, Nokia, Blackberry and Kodak.
Poor leadership has a number of effects on a company’s performance. Poor leadership contributes to lack of morale among members of the organization. It also inhibits the ability of workers to exhibit their expertise and potential due to lack of a vision. Low morale will be injurious to the performance of a company since people will be less motivated to work (Mintzberg 1994).
Poor leadership can also be blamed for poor resource management. Resource mismanagement brings about financial and resource related shortages such as financial deficits, low productivity and in extreme cases can lead to shortage of raw materials.
Such occurrences leave workers disoriented and lack faith in the organization’s leadership (Barney 1991). Their morale to work towards the organization’s success fades with time leading to failure.
Poor leadership is also associated with lack of a vision. This robs the company the opportunity to compete favourably since it is unable to evolve and adapt to the market changes.
Visionless leadership is the major factor contributing to a company’s bankruptcy due to production of low quality goods and services that are incapable of competing favourably with substitutes made by competitors (Pertusa et al. 2009). These companies may finally end in failure.
Poor leadership can also be blamed for laxity among workers in an organization. Bad leaders will have little or no control over the workers in an organization, a situation that leads to poor coordination of work in the organization (Barney 1991).
This is one of the reasons why RIM and Motorola have failed as corporate. This situation will hinder proper work flow between departments in an organization. Poor coordination will eventually lead to failure.
Poor leadership also contributes to financial problems facing most companies. Lack of proper financial management is detrimental to a company. The company should be able to reap maximum profits from peak seasons to cushion it against the reduced earnings during off-seasons.
This will ensure a steady cash flow throughout the trading period to facilitate the organizations operations (Mintzberg 1994). Cash deficits within a trading period will hinder the production process and will automatically lead to failure.
In this section, the researcher seeks to discuss poor leadership as the major cause of corporate failure (Porter 1996). The author will use Motorola and Research in Motion (herein referred to as RIM) to support this theory.
The Poor Leadership Theory and Corporate Failure
Failure by leaders to oversee and predict problems likely to be faced by a company in the future may lead to the organization’s downfall (Eisenhardt & Martin 2000). Motorola Company being one of the earliest telecommunication entities should be a force to reckon with in the industry. This has however not been achieved and emerging players in the industry have overtaken the company.
On its part, Research in Motion is one of the recent entrants in the telecommunication industry. It started off as a powerful market player with the introduction of the Blackberry handset. Research in Motion Company’s failure is largely attributed to the delays in messaging and browsing due to poor installation of their European based switch, a situation that would have been detected earlier.
It is the leadership’s mandate to come up with sound innovative strategies (Ludwig & Pemberton 2011). Both Research in Motion and Motorola have for years continued to operate on outdated applications.
The Motorola Company’s newly invented Smartphone operating on the Android system has been associated with connectivity problems and has not been efficient enough to earn itself the title of a Smartphone. On its part the Blackberry Smartphone has occasionally encountered delays. Failure to innovate by the two companies meant surrendering their market share to competitors.
The leadership of a company is charged with the responsibility of developing contents as well as introducing new applications. This has however not being the case in Research in Motion and Motorola Company.
The two companies have continued to use their outdated applications over the years unlike the competitors such as Apple and Samsung. RIM’s transition to the new operating system to be able to compete with other operators such as the Android system has proved futile. This factor is detrimental for the company since the products are viewed as inferior to those offered by the competitors.
The leaders should assess situations and provide sound timelines for their company’s operations (Teece et al. 1997). Entry of Motorola into the telecommunication industry can be considered as untimely. The company ventured into an already saturated market with strong players.
This also happened in RIM. The company ventured into an industry already dominated by companies such as Apple and Samsung. This has seen the company record almost monthly losses in its revenues. It is evident that the company is not likely to recover from its current predicaments due to strong competition.
The leadership of major successful companies becomes over-confident about their capabilities thus failing to consider their competitors’ abilities and agendas. Upon entry into the telecommunication industry, Research in Motion Company had at first proven to be a strong force.
The failure can be blamed on laxity on the part of the leaders (Schreyoegg & Kliesch 2007). Motorola leaders were also lax and failed to take advantage of developments in the market due to complacency.
How to Avoid Failure
After a spell of poor performance, a company’s management team should make efforts to reverse the downward trend (Nonaka &Takeuchi 1995). This downward trend can be avoided through the introduction of timely ideas. RIM and Motorola can take advantage of unexploited aspects in the market and major on them.
Introduction of benchmark standards is also vital in improving leadership. Leadership should be guided by highly effective standards. A company’s stakeholders such as investors should develop such standards to enhance competence in the company’s leadership team. This will help eliminate practices such as abuse of office (Teece 2007).
Adoption of open planning as well as the introduction of new concepts and methods is also vital in steering a previously unsuccessful company to success. RIM and Motorola Company’s management teams should be able to identify key opportunities in the market and exploit them fully (Winter 2003).
Stimulating strong succession strategies is also vital in preventing failure. This ensures smooth transition of power even after the leaders exit (Porter 1985: p. 68). Companies such as Apple have continued exhibiting good performance even after the departure of their leaders. RIM and Motorola should adopt this.
Execution of beneficial acquisitions and mergers will also prevent occurrences of failure in a company. Leaders should identify and approach promising firms in an effort to consolidate capital and market opportunities (Hamel & Prahalad 1990). Analysts will always keep an eye on the performance of the product and its impacts on the company (Kay 1995: p. 58).
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