PESTLE Analysis: Singapore Airlines

Strategic planning involves deciding on the actions and resource allocations in order to build a strong foundation for an organisation. Not only do they set a clear goal, but they provide structure and direction which increases an organisation’s chance of succeeding (Kumpf, 2004). Many authors appreciate the benefit of incorporating these plans into businesses. Kaplan describes how many executives fail to see the value of strategic planning yet argues that strategic planning need not be a waste of time if approached with the right goals in mind, arguing that the key is to create an environment of preparedness (Kaplan, 2003). Lauenstein echoes this idea emphasising the importance of strategic planning whilst stressing that many executives do not fully understand the functions of this strategy, hence not being able to reap the full benefits of this approach (Lauenstein, 1986). Nevertheless, strategic planning is not a standardised process across every organisation, and must be adjusted to fit each organisation taking into consideration a number of factors.

The PESTLE Analysis identifies five main categories influencing any organisation and those are as follows:-

Strategic Management is the theory and practice of making decisions that shape the future of the firm. This course looks at the content and process of strategic decision making from the perspective of managers who are responsible for an entire business unit. These may be individuals who are acting in the capacity of a Chief Executive of a company, divisional General Managers, or departmental heads. It is also the perspective most

• Strategic choice which is organisation’s chosen strategy and it indicates how the mission and the goals can be achieved. (Noe et al., 2008: 74).

Singapore Airlines was established in 1972. Singapore Airlines’ major strength is the brand image, its size and also the positioning strategy. According to Heracleous and Wirtz, in 2010, SIA was acknowledged as the second largest in terms of market value. SIA has reported profit every year, which is an achievement that has been unmatched by other competitors. According to a report, SIA generated an annual profit of 378.9 million Singapore dollars in 2013. Most importantly, SIA was best-known for its brand in the airline industry. SIA managed to positioned itself as the leading brand through the utilization of a business model known as “First Mover”. SIA uses this model to stay one step ahead of its competitors. For instance, SIA was the first airline to take delivery of the new A380 passenger plane in the 2000s.

However, as Masaoka (2011) clearly declares, different approaches are needed in place of the traditional approach to strategic planning. There are two approaches that can serve as alternatives and still provide the fundamental purpose of strategic planning, which is to determine a desired state for the organization, by way of the current state of the organization, and implementing the necessary reform to achieve the desired state (Lachman,

Strategic Planning is one of the most fundamental factors in the success of an organization. This research project will discuss the importance of strategic planning as well as the different components of strategic planning. Many organizations fail to accomplish their goals and tasks due to the lacking of strategic planning. In order for their businesses to be successful, organizations need to be well informed about how the strategic planning process works.

This analysis helps to identify issues for the result of strategy. PESTEL stands for Political, Ecological, Social, Technological, Economic and Legal environment of external analysis.

An organization can only grow once they are prepared for future hit and accordingly they plan well before. PESTLE analysis helps an organization to understand a brighter side of the picture where organization is operating.

PESTLE analysis is very useful for studying the environment in which a company operates and accessing external factors influencing the company in the markets it operates. PESTLE is the acronym for the following categories of investigation: political, economic, sociological, technological, legal and environmental (Cheverton, 2004; Partridge and Sinclair-Hunt, 2006).

An organisation’s strategy plays an important role of providing direction of where company wants to be and how best to allocate the company’s resources to meet its objectives. The formulation of business strategies has evolved over the years and has been made more difficult in recent by the uncertain operating environments and global financial crises.

It is known that the ultimate purpose for a company is to set and achieve their business goals. A firm’s strategy is a plan that offers a number of guidelines for an organisation to achieve success by fulfilling their business goals (Cambridge Dictionary, 2016; Merriam-Webster, 2016). For example, it can identify a company’s capabilities, examine the changes in the market, and forecast the possible future of a company. As a result, having a strategy is one of the crucial elements for developing a business. Planning plays an important role in strategy (MacIntosh & Maclean, 2014). Strategic planning includes several analysis activities, for instance, industry analysis, value chain analysis, and stakeholder analysis. This essay will discuss my experience in doing strategic work. In this essay, it will first describe how and what my team members and I did on strategic planning, including our acquirements and the difficulties we faced during the group work. Next, it will be followed by my reflection of doing strategic work as a group compared to doing strategic work individually.

According to literature, strategic planning is vital for strategic management. Burgelman (1994) points that strategic planning is a process which decides how, when and who is going to plan and how the results will be implemented. Drucker (1974) identified that the planning for an organization’s future that includes setting major overall objectives, the determination of basic approaches to be used in

According to Faiza, Suleman, & Safdar (2015) strategic planning is a well-known organizational management activity that is used by firms to “Set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results and assess and adjust the organization 's direction in response to a changing environment” (p. 795). Strategic planning is a set of essential decisions and actions that form and direct what a firm is, what it does, why it does it, who it does it for and what its future plans are. Thus, effective strategic planning can tell an organization how to measure its profits and achievements so that it will know if it is truly successful.

As public biggest airline company in Singapore, Singapore Airline has several key business activities ranging from engineering, flight services until cargo services, but their main activity is more on flight services. Singapore Airline is relying heavily on Singapore financial system to operate their business. One of the evidence is that SIA benefiting from the financial market as the company’s share has been listed in SGX. As stated on Singapore Airline Annual Report, SIA has a cash surplus for the past 10 years on average………. Singapore financial system has help this company to grow and develop rapidly by their financial market, institutions and instrument, which will be discussed further later.