Strategic Management of Silkair Essay

3247 Words Mar 16th, 2013 13 Pages
Executive Summary
SilkAir’s success in the regional air transportation services has proven to be achieved with the right implementation of business strategies over the years.

An analysis of the macro-environment of the airline industry with the use of the PESTEL framework was inevitably explored to better understand the current situation of the environment SilkAir is operating in. This is done so as to analyze the overall impact on the growth of Silkair. In order to provide a better understanding of the current competition and the driving force in this competitive industry, the Porter’s five forces model was used to further analyze SilkAir’s position in the industry.

The resources and competences of the company is what make it so
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Due to environmental concerns, airlines are working constantly to do their part in limiting their climate change impact and reducing carbon emissions as well as noise. The need to control noise pollution as well as energy consumption is continuously being addressed to airlines. In an effort to further improve the current conditions, the International Air Transport Association (IATA) has also done its part by adopting a strategy, which aims to reduce emissions (Singapore Airlines 2012).

3. Industry Analysis The Porter’s five forces model will help us to identify the attractiveness of the airline industry and from this analysis, we can derive the main driving forces in this competitive environment.

Barriers to entry Barriers to entry are fundamental industry conditions that block potential entrants because the cost of overcoming those conditions is more than the profits anticipated (Warner 2010).

The boom in the civil aviation industry has led to an increased in both air travelers and airline companies in the recent years (IATA 2011). Research reveals that, of the expected 3.3 billion air travelers, 30 percent will come from the Asia/Pacific (Clarke 2011). The airline business naturally creates a cost barrier as its entry costs are high, its competition lies among the existing players in the industry, each vying to differentiate itself in terms of service, technology, travel destinations etc. SilkAir gained

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