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Growth And Environmental Quality Singapore -Myassignmenthelp.Com
Question: Discuss About The Growth And Environmental Quality Singapore? Answer: Introduction The purpose of this report is to understand the macro environmental factors playing important role in altering business process for the Emirates Airlines in Singapore. Macro environment is considered as one of the key determinant of business success. Importance of macro environmental analysis is critical due to the uncontrollable nature of the factors. Managers of an organisation cannot control these factors, which makes in necessary for constant analysis of the factors and upgrade business process for gaining competitive advantage in the market. There are various tools in marketing, which helps organisations in analysing the market condition. Some of the widely used macro environmental analysis tools are PESTEL and Porters five forces analysis tool. The PESTEL analysis helps identifying the market situation, whereas, the Porters five forces analysis helps in identification of competitive situation in the market. Emirates Airlines started its venture in 1985 with just two flights. However, the company initially started as dnata with five ground staffs for handing the services in Dubai international airport. Their aviation organisation grew over years until 1985 when Seikh Mohammed bin Rashid Al Maktoum and Mr Flanagan entered the airlines industry with their two flights. They have grown since then and as an international airlines company (emirates.com, 2018). The company now is a full-grown international airlines company providing their services to the selected few around the globe. The vision of the company remains same form its initiation days to provide quality services to their customers. Emirates airline focuses on the quality instead of quantity, which positions them in the elite class airlines service provider in the global market (emirates.com, 2018). The company modifies their services depending on the operating region for increasing customer satisfaction. Description One of the commonly used frameworks or tools in macro environmental analysis is the PESTEL analysis tool. This gives marketers the birds eye view over the external environmental factors from different angles. The PESTEL stands for political, economic, social-cultural, technological, environmental and legal factors of the external market (Zalengera et al2014). These factors however, can be considered as the primary factors as the framework has considerably modified over time and the components are adjusted according to the need of individual business organisations. These factors associated in the framework helps developing idea of the particular viewpoints. For example, political perspective helps identifying the political situation of the market and helps determining the opportunities and threats they poses on the business. Similarly, economic factors helps understanding economic condition, social factor identifies the cultural stance, technological factors notes down the technological development in the market, environmental factors studies the demography and surrounding environment related to the business and legal stance lastly communicates the laws that is governing the target market (Ho, 2014). Analysis of Emirates This section of the report will identify the macro environmental factors that provides opportunities and threat to the organisation. Political The country represents a stable political condition since its independence. This further communicates the low rate of economic risk for the international organisations in expansion of their venture in Singaporean market as it provides sense of political security to the companies. The stable developing political condition along with the democratic government facilitates in the constant development of the economic condition of the nation (Rodan, 2016). This further provides a better standard of living for the population of the nation and peace. However, the opposition party has less freedom of speech and regulated by the legal suits. The stable political situation and absence of political dilemma will provide Emirates Airlines opportunity of uninterrupted business operations in the country. This will considerably reduce companys expenses in the country. Economical GDP of Singapore reflected a figure of 296.98 SGD as per 2016 annual report (tradingeconomics.com, 2018). Moreover, the average monthly income rate as per the 2017 calculation reflects 4795 SGD in 2017, which is considerably, which can be considered as moderate to high (Tradingeconomics.com, 2018). Moreover, the average purchasing power of Singaporean population is 36,324 SGD, which sometime overshoot the purchasing power of USA population. This enables the company to enjoy greater profit margin in the market. The country again reflects a stable economic growth with growing opportunities for the international and domestic business expansion. However, the labour cost in Singapore is on a rise due to the labour shortage. This is a considerable threat for Emirates in Singapore, as it will significantly increase the operational cost. Socio-cultural The tendency of holding traditional cultural value is present in the Singaporean population, despite of the increased modernisation and westernisation being reflected in the younger generation. This is an opportunity for Emirates to provide customised regional services to their customers. This strategy adopted by the company helps them in satisfying market needs. Moreover, literacy rate of the population reflects significantly high figures that create the urge of foreign education among the Singaporean population (Noor Leong, 2013). The increased disposable income of the Singaporean population enabled them to afford international flights, which was earlier restricted to the wealthy segment of the population. However, the low cost flight options available for the target population threatens Emirates in their luxurious services as the customers demand is shifting towards economic flights. Technological The country has gained a level of technological advancement that encourage the population for using the modern technology in daily life. This will help Emirates in their promotion, ticket booking and other activities using technology. Moreover, this provides Emirates the opportunity to provide the technologically advanced population a greater technological support in their long haul flights (Islam, Al Mamun Amanullah, 2017). This will help in trust building process as technological integration in the flight not only enables the customers to enjoy a luxurious flight, but also provides them a sense of safety in the flight. Environmental The current environmental crisis of the country led to formation of strict environmental control policies for the businesses operating within the country (Tan et al, 2014). This makes Emirates strictly follow the environmental well-being of the country by reducing the air pollution that is the primary concern of the airlines. This calls for the need of strong CSR policy while operating in Singapore. Moreover, increasing energy price can be another thret for Emirates in their operation within Singapore (Heracleous Wirtz, 2014). Legal Singapore is considered as one of the easiest country for international business expansion. The country has open investment regime, with restriction limited to the financial services, professional services, and media sectors. The range of investment incentives offered by the country along with tax holidays and concessions and other concession schemes makes it favourable market for Emirate. The Income tax Act and Economic Expansion Incentives creates smoother path for the international investors to enter the market (sso.agc.gov.sg, 2018). Moreover, the country has no as such restriction in foreign exchange transaction and capital movement, which enables Emirates Airlines to move their funds freely in and out of the country. Porters Five Forces Analysis Porters five forces market analysis tool is a simple but effective tool proposed by Michel Porter. Markets widely use this tool for identification of the competitiveness of the market for positioning them in advantageous compared to the rivals (E. Dobbs, 2014). The five forces altering the nature of the market as identified by this tool are bargaining power of the suppliers, bargaining power of the customers, competitive rivalry, threat of substitution and threat of new entry. Analysis of Emirates This part of the report focuses to identify the competitive challenges faced by Emirates Airlines in the Singapore market. Competitive Rivalry The competitive rivalry in the airlines industry is different compared to other industries, where the competition is accounted for the companies running in the same route. This means that the companies that are accounted as rivals are the ones that fly to the similar destinations. Emirates is currently operating around the globe from their Singapore base, where the major intensity of the flights are in European, Middle East and North American market (Cheng, 2013). The major competitors in of the company in these high frequency routes are Singapore Airlines, Etihad, Qatar and Lufthansa. However, the quality service provided by Emirates and the value proposed considerably reduce the threat by building customer loyalty. Bargaining power of Customers Bargaining power of the buyers again depends on the number of competitors operating in the same route as Emirates. The range of routes offered by Emirates is considerably high compared to the other competitors in the market such as Singapore Airlines, Lufthansa and Etihad (Cook, Tanner and Lawes, 2012). All the competitors mentioned above provides luxurious flights for comparatively similar price. This increases the bargaining power of the buyers as they get to compare the offers provided by the airlines (Babi?, Tatalovi? Baji?, 2017). However, the quality of services in Emirates is significantly high, and the company focuses on the regional specifications that gives them competitive advantage in the market. This helps them building brand loyalty, which again facilitates in reducing the bargaining power of the buyers. Bargaining power of the Suppliers The supplier switching cost for the company is significantly high, as there exist duopoly in the fleet supply. Boeing and Airbus has captured the global fleet supply market, which considerably increases the bargaining power of the suppliers. The vast number of airlines helps them in the process of increased bargaining power (Ciliberto Williams, 2014). However, the bargaining power of the supplier in case of engines is comparatively due to the oligopoly nature of the market. The competition lies between a few competitors namely Rolls Royce, Pratt and Whitney, and General Electric. This communicates strong supplier power in the industry that puts Emirates in relatively weak position. Threat of Substitute products The Emirates being an airline organisation enjoys relatively low threats from the substitute services. Moreover, Emirates in Singapore only has international flights that again reduces the threats if substitutes. Though there are other modes of transport available for the customers in Singapore to travel to their international destinations, the services provided by the airline industry is short time consumes that makes it more feasible for the customers (Abeyratne, 2016). Moreover, the elite services provided by Emirates in the market with their region specific products and services facilitate them to enjoy a significantly less threat from the substitute products. Threat of new entry The main activity of Emirates in Singapore market is based on the long haul air travels. The company only has long haul travels that considerably reduced the competition in the market. Again, there are only a few competitors in the international market that operates in long haul air travels that reduces the changes of new competitors enter the Singapore market (Stockport, 2012). Moreover, high brand value of Emirates in the market also reduces the threat from new entrants. Strategic Recommendation The first recommendation that can be made for Emirates while operating in Singapore is the formulation of CSR policies in order to safeguard the environmental interest of the country. This is due to the environmental policies that is the result of environmental degradation of the country. The second possible strategic recommendation for Emirates to adopt in their Singapore market is the consideration of low price travel for the target population. This is due to the customer preference for economic travel. Emirates can formulate strategies for providing luxurious travel experiences by formulating loyalty discounts schemes for their customers. The company can reduce their flights to the destinations for holding greater value in the market. This will align their operations with the vision of greater quality with comparatively less quantity service provided. This will help them avoiding the cost issue faced by limiting the customers to loyal customers with greater need of luxurious travel. The company can further focus on the region specific services aligned with the society and culture of the target market. This will help them proposing greater value to their customers, hence, increasing the demand in the market. Conclusion It can be concluded from the discussion that Emirates is enjoying favourable situation in the Singapore market due to the less competition in long haul flights. The political, legal, technological and other environments are also favourable for the company. However, some modifications as recommended in in the report will help them capturing greater value in the market. References Abeyratne, R. (2016). Competition Law in Air Transport. InCompetition and Investment in Air Transport(pp. 191-206). Springer, Cham. Babi?, R. ., Tatalovi?, M., Baji?, J. (2017). 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