Physical Resources and Capabilities

Physical resources and capabilities

1. Changi Airport

Government and SIA had invested in the Changi Airport together. It includes facilities such as hangar, maintenance center, and catering center, those facilities can be used by SIA, but also the customers of other airline company. So those services in Changi airport are not unique for SIA. Airport service is valuable and important for SIA or other airlines company. Low unique and high valuable, then it is not SCAs.

2. Planes: SIA have 22% 747-400 aircrafts of total production in the world. These planes are greater flying range, better fuel efficiency and quieter cabin than other airline. High unique and valuable that SIA has strong competitive power for attract consumers, and lower cost than other airline. Also if other airlines want to purchase more 747-400 that will use huge money, which is difficult.

Finance:

There are two sources for SAI finance: revenue and shareholders funds. Both are valuable because they are key factors to support the operation of SIA. Two factors that allocate to the SAI revenue are overall load and passenger seat, and they are not unique because every airline companies must contain these sales. While, SAI’s group shareholders funds even were enough to pay for most of its purchases of aircraft in future and recent past the shareholders funds had grown at a rate exceeding S$500 million every year, as well as no debt for group, so this strong financial position is unique to comparing with others. However, shareholders funds is not sustainable competitive advantage, because the process of collecting funds are not complexity, any airline companies have this kind funds, and it is easy to tacit.

Human Resource

SIA has a comprehensive human resource management system which involves training and motivates its employee. We can find the SCA of human resource from two aspects: labor cost, training.

SIA’s labor cost is the lowest among all major airlines, that not only valuable but also unique at that time. The gap between SIA and other airlines companies are not easy to cover in short time. But if other airlines make great efforts on cut down their human resource cost, they will catch up with SIA eventually since it is not too complexity, specificity and can be learn from the cumulate experience.

SIA is only one company who consecutive win the National Training Award for three years. SIA spent a lot of money in employee training program, since it believes that human is the essential factor for company successful. It also launched some program (eg. Outstanding Service on the Ground) to motivate the frontline staff. Maybe the competitors can copy the model but they can’t imitate the SIA’s culture easily. Whole training system is inseparable with SIA’s culture which is valuable and unique, also hard to imitate.

Technology:

In the customer service aspect, they are the first airline to offer Dolby Headphone and in-flight entertainment system for customers, SIA also was the first airline company to provide global satellite in flight telephone service and fax service.

For the pre flying service, such as introducing internet check in service and Centralized Baggage Tracing unit system, which enabled more effective management of mishandled baggage

All of the above are distinctive competencies of SIA at that time. But most of them are not strong sustainable, the only advantage for the SIA is just they are the first one to introduce these kind of service, but all other airline companies can provide the same kind of service in the future after they realize that customers want these kind of service.

We think that only the Centralized information system, as Centralized Baggage Tracing unit is sustainable distinctive competency of SIA, because it is more complex and mostly suitable for airline industry.

Reputation:

During the 1999-2000 year, SIA received over