Critically Analyze If Singapore Airlines Should Enter the Market?

1. Critically analyze if Singapore Airlines should enter the market?

Before making a strategic decision to enter a new market, there are four dimensions to consider: the firm’s ambitions for the domestic market, the capabilities of the business, creating capabilities through investment and positioning.

From the background of SIA, it is clear that the business is growing fast and in a positive financial condition. It has never posted a negative annual return from the beginning of the business. The high capabilities of the company provide it with the confidence to enter a new market and face the potential challenges and risks. Under this circumstance, SIA has the ambition to extend its business oversea. Since the India government allows FDI in the aviation market and permits an equity stake of up to 49% in local carriers for international airlines, this encourage SIA to explore the new market in India.

From the demographic analysis, based on the large population in India, there is a rapidly rising middle class, and the level of disposable income is increasing as well. From other concerns, the rapid development of tourism industry and greater integration between local businesses and global markets also attract overseas companies to enter this market. In addition, the Indian aviation sector also provides resources and convenience to the business.

The section of investing includes intelligence building, flexibility and networking. Since SIA plan to collaborate with local company, Tata, it is convenient for the company to adjust to the peculiarities of the environment from the consideration of political, business or sociological. Tata can also give practical business recommendations for SIA to help it fit the local market. Because both of Singapore and India are Asian countries, it can be easier for SIA to flexible handle the new situation and adapt the environment. Due to the same reason, the networking between SIA and its local partners can be slight easier.

Based on the resource attractiveness, market attractiveness and political and operational attractiveness, India could be a suitable country for SIA to develop its business. The available aviation market resource, increasing consumption of air traveling, and local government supports provide SIA new room for economic growth. The conversations and negotiation between SIA and Tata can deal with the divarication on business strategies to push forward their comprehensive strategic cooperative partnership.

Leelyn thinks it shouldn’t enter the market.

Purchasing p---ower

Only a small percentage of market shares

Low-income countries

The analysis of the company, it focus on full service for all class---market localization

The Indian airlines are under the control of the local government

Lack of the competition

Exclusiveness

1. If Singapore Airlines was to enter the market, how should they do it? ---

Joint –venture (JV) with Tata due to the 49% equity stake allowed.

TATA is familiar with the local market. That can save time to adjust to the market.

The networking of Tata,

Positioning is important for answering this question.