Strateg Essay

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Journal of Air Transport Management 15 (2009) 274–279 Contents lists available at ScienceDirect Journal of Air Transport Management journal homepage: Strategy and organization at Singapore Airlines: Achieving sustainable advantage through dual strategy Loizos Heracleous a, *, Jochen Wirtz b a b Warwick Business School, University of Warwick, Coventry CV4 7AL, United Kingdom NUS Business School, National University of Singapore, 1 Business Link, Singapore a b s t r a c t Keywords: Sustainable advantage Strategic alignment Dual strategy Singapore Airlines has consistently outperformed its competitors throughout its history, in the context of an unforgiving industry environment. We examine how Singapore Airlines has achieved its outstanding performance and sustained its competitive advantage, through effectively implementing a dual strategy: differentiation through service excellence and innovation, together with simultaneous cost leadership in its peer group. We examine the organizational elements that have allowed the company to do so, illustrate its strategic alignment using a vertical alignment framework, and conclude by highlighting the significant challenges ahead. Ó 2008 Elsevier Ltd. All rights reserved. 1. Introduction The airline industry has been plagued by several factors such as overcapacity, commoditization of offerings, cutthroat rivalry exacerbated by the entry of low cost carriers, and intermittent periods of disastrous under-performance (Costa et al., 2002). Several macro-level socio-economic factors such as rising oil prices, the SARS crisis, frequent concerns about the eruption of bird flu, the Asian tsunami, and rising terrorism concerns have further impacted profitability adversely. In 2006, the global airlines industry suffered a net loss of $500m, or 0.1% of revenues,

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