Porter Analysis on Sia

X. Porter Generic Competitive Strategy Model Analysis on Singapore Airlines

We use the Porter's Generic Model (Porter, 1985) to examine the sources of competitive advantage and the competitive scopes of Singapore Airlines. In terms of competitive advantage, we are interested in how products and services of SIA are: (i) differentiated to stand out from other competition in the market, (ii) being the lowest-cost product in the airlines industry and (iii) segmented and tailored into submarkets to provide a niche strategy.

X.1 Competitive Scope to the Industry

At the corporate level, SIA has diversified quite substantially, with 36 direct subsidiaries such as Singapore Airport Terminal Services, SIA Engineering Company and SIA Cargo. The airline subsidiaries of SIA are also extensive, with SIA serving the "high-end" on an international route network, Silk Air on middle-ground serving the Asia-Pacific region, while Tiger Airways covering the "budget" component serving the South-East Asia region with occasional routes to further destinations. SIA also has a 49% stake in Virgin Atlantic, a British Airline operating at a global route network. From this, SIA has covered a huge ground in terms of competitive scope in the market.

X.2 Product Differentiation

In the airlines industry, Singapore Airlines has consistently performed outstandingly and has received many accolades and awards since flying under her own colours in October 1972, following the de-merger of Malaysia-Singapore Airlines. SIA has differentiated itself as a premium carrier through its excellent levels of service. SIA's philosophy to differentiate itself from competitors is to offer the best quality service available; its commitments to service excellence and customer care is globally renowned. According to Hammil (1993), SIA has been building its service quality around