This unit NRS451V describes Strategic Management: A Basic Introduction When it comes to strategic management, it refers to the process of forming, achieving, and achieving the major objectives that the company's management is responsible for while taking into account the capital and a task of the internal and external environments in which the company wishes to compete. This course is presented at the University of Grand Canyon University.
Location- United States
Study level- Post Graduation
Unit code- NRS451V
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Singapore Airlines is introduced in this section. Singapore Airlines (SIA) was founded in 1972 and has maintained a high level of performance among its rivals in the sector during its 35-year existence to date. Customers benefit from one of the world's most modern aircraft fleets, which, according to Singapore Airlines (2014), flies to more than 600 locations on six continents, with its trademark Singapore Girl offering an exceptional level of service. Since its inception in 1970, Singapore Airlines has amassed an impressive and continually growing list of industry-leading innovations.
These include providing free headsets along with a choice of meals and drinks in Economy Class in the 1970s, introducing satellite-based in-flight telephones in 1991, collaborating with an extensive panel of renowned chefs, the International Culinary Panel, to provide lavish in-flight meals in 1998, developing audio and video on demand (AVOD) capabilities on Kri flight in 2009, and developing audio and video (Singapore Airlines, 2014). There's something about Singapore Airlines that makes you feel good. The company has built an enviable reputation in the brutally competitive commercial aviation industry over the last four decades by providing clients with high-quality service and leading the business-travel sectors. SIA has won the Condé Nast Traveler World's Best Airline award 21 times out of the 22 times it has been given, as well as Skytrax's Airline of the Year award three times in the last decade.
The fact that, despite the high quality of its services, SIA is one of the most cost-effective operators in the market is something that is not well recognised. The company's expenses per available seat kilometre (ASK) were under 4.58 cents between 2001 and 2009. According to a 2007 International Air Transport Association study, full-service European airlines had costs ranging from 8 to 16 cents per mile travelled, while U.S. airlines had costs ranging from 7 to 8 cents per mile travelled, and Asian airlines had costs ranging from 5 to 7 cents per mile travelled.
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To the contrary, the expenses of most European and American budget airlines ranged from 4 to 8 cents per mile travelled and from 5 to 6 cents per mile travelled, according to SIA. This combination of SIA's differentiation strategy (which it pursues via service excellence and constant innovation) with its cost leadership strategy is fascinating since the two goals are presumably contradictory. Few businesses have successfully implemented a dual strategy, and management experts such as Michael Porter claim that doing so for an extended length of time is unfeasible since dual strategies imply opposing investments and organisational procedures.
Nonetheless, adopting multiple tactics is becoming more necessary. Since the previous crisis, the demand for value-for-money goods and services has increased significantly, especially in developed nations. As a result, even premium product and service providers must find out how to capitalise on possibilities at the middle and lower ends of the market.
Furthermore, global firms are up against competition from competitors, many of whom are based in developing economies, who are using new technology and business models to deliver adequate products and services at competitive rates. However, decreasing costs or further distinguishing goods and services is frequently not enough to win the struggle against newcomers. In general, price wars cost leaders more than they do rivals, and maintaining unrelenting distinction is difficult to maintain. Adopting a dual approach is sometimes the only option available.
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According to our findings, Asian nations are more likely than other countries to use dual policies. Several Western executives argue that, for example, cost leadership and distinctiveness, globalisation and localization, as well as scale and agility, are inherently incompatible and thus cannot be reconciled. The Singapore International Airport (SIA) and other corporations, such as Banyan Tree, Haier, Samsung, and Toyota, operate as if the dualities are opposites that complement rather than contradict one other; that is, they complement rather than oppose each other. It is ingrained in Eastern thought; for example, in Taoist philosophy, the notion of the balance of yin and yang captures the essence of this way of seeing things.
To be sure, following two strategies will result in organisational paradoxes; nevertheless, executives in Asian markets are more likely to recognise that conflicting perspectives give the whole picture and to build policies to handle both of these perspectives. No other firm is better at executing a dual strategy than SIA. Since its inception in 1972, the airline has generated positive financial returns on a consistent basis, never reporting a loss in a calendar year. It has essentially no debt, and, with the exception of its original capitalization, it has supported expansion mostly from retained profits while maintaining a constant dividend payout policy.
Airlines have two primary assets: aircraft and people, and they manage both in such a way that their service is greater than their competitors' while their expenses are cheaper. Unlike other carriers, Singapore Airlines guarantees that its fleet is constantly in good condition. To provide an example, in 2009, the average age of its aircraft was 74 months, which was less than half the industry average of 160 months. When mechanical breakdowns are infrequent, it causes a positive feedback loop: fewer takeoffs are delayed, more passengers reach their destinations on schedule, and fewer flights are cancelled. New aircraft use less fuel and need less repair and maintenance than older ones: Repairs accounted for 4 per cent of SIA's overall expenditures in 2008, compared to 5.9 percent for United Air Lines and 4.8 percent for American Airlines, respectively. The aircraft operated by SIA spend less time in hangars, allowing them to spend more time in the air: on average, they fly for 13 hours every day, compared to the industry average of 11.3 hours. And, of course, clients prefer aircraft that are more recent in design.
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