Case Singapore Airlines

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Case Singapore Airlines 5 pillars of cost-effective service excellence: • Rigorous service design and development (service excellence) • Total innovation (both) • Ingrained consciousness (cost effective) • Strategic synergies (cost-effective) • Holistic staff development (service excellence) 1) What is the ‘service concept’ of Singapore Airlines? • Premium service to some of the most demanding airline customers • To sustain its differentiation (related diversification), it must maintain continuous improvement (difficult because every airline is doing this same thing, not only competition from within industry (ex call center). Every time SIA reaches a goal: they find a new mountain to climb) • TCS (transforming customer service) and Soar (service above all the rest) • Strategic choice: leader (pioneered innovations for customer services) and fast follower (in areas that are less visible to customer) at the same time. Any innovation is expected to have short shelf-life, important is the ability to quickly drop programs or services (ex. FAST) • 40 – 30 – 30 ruele: 40% of recources: training people, 30%: revies of processes and 30%: creating new product and service ideas. • Special staff training programs (“Singapore Girl”) and refresher courses (average 3-4 days a year per employee) • Play in all segments: high end (SIA), middle ground (Silk Air) and low end (Tiger). SIA is part of Star Alliance. 2) How is Singapore Airlines able to get a higher net profit margin as compared with the top 20 airlines in all previous years? • Never showed an annual loss since SIA became independent • ASK (cents per available seat kilometer) of 5.5 US cents (2006-2007) – 5.8 (2007-2008), compared to 9-14 (flag carriers) and 4.5-7.5 (budget carriers) • Staff is trained to deal with conflicting objectives of excellence and profit, even in everyday

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