Group Component, Integration, and Synergy

2021-05-13 05:08:44
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Singapore Airline (SIA) is a global aviation brand. Its business model is based on low-cost strategy, established a global network and heavy investment to both full-service and budget market segment. SIA group is a major revenue source to the Republic of Singapore. The Airline has achieved excellence in the global aviation arena. It has received internationally and national awards on differently outstanding dimensions of excellence. It received in 2015 Changi Airline Award as the 3rd passage Carrier award. To diversify the aviation industry risk, the group has adapted to a group made up of four companies namely Singapore Airline, Silkair, Tigerair, Vistrara, and Scoot.

Lufthansa Group has five unique business segments; Passenger Airline group comprising of Lufthansa Passenger Airline, Swiss, and Australia Airline. Its airline business models are to operate a global airline network based on the provision of reliability, safety, high quality, punctuality, and professional services. It is the only aviation MNC with highest numbers of low-cost Germanwings Airlines, highest equity investment in JetBlue, SunExpress and Brussels Airlines. Secondly, the logistic segment is the leading in Europe as the most reliable low-cost cargo freight services comprising of 16 Boeing MD11Fs and 4 of B777Fs. Third is MRO, the Lufthansa Technik, which is severally awarded as the world most independent maintenance and repair service provider to civilian commercial aircraft, as well as global general freight fleet supplier. Forth, LSG Sky Chefs Group is a subsidiary of Lufthansa Group which is a global airline market catering service leader. Fifth, Lufthansa has a subsidiary called Lufthansa Systems a globally recognised IT consultant in the world aviation industry.

Business Models.

Lufthansa Group is global aviation leader. The group has established the brand in network airlines, aviation services, and low-cost carrier companies. It derives its competitiveness from the integration of airlines and five other business segments which provide financial synergy to operate at low cost among the competitors.

SIA group has appreciated expansion to gain a better global aviation industrys position as a strategy for steady revenue growth. The Scoot subsidiary is the recent expansion programme. The new airline company (Scoot) was established in 2013. The company is in its second year of operation, impressively the company in 2014/2015 financial year serviced 4.3 million passengers. It has 13 active destinations into seven countries. SIA group has continually succeeded in expanding the market reach annually. SIA group offers exclusive reliability. In 2014 SIA group invested USD 325 million to expand its Boing fleet size and technology to offer the recent and latest cabin products top in the aviation industry in its 19 Boing fleets out of 105 airplanes.

Social and Community Investment.

June 2014, SIA group launched new online shopping mall named Kris Flyer Spree boasting 2000 global brands. The company on 1st Aug 2014 deployed its commitment to offer daily A380 flights to Mumbai and New Delhi as a reaction to the trends in the global aviation services demand. SIA group is the first primary sponsor of the BNP Paribas WTA Finals, besides the 2014 Formula 1 title sponsor.

Partnerships and Alliances.

March 2014, Lufthansa Group and China Airline signed a memorandum of the joint commercial venture. Sep 2014 All Nippon Airways, the major Japan Airline

By Feb 2015, SIA group Kris flyer program had 200 partners.

May 2014 SIA group filed a codeshare bilateral agreement with JetBlue Airlines offering customers outstandingly seamless connections between SIA group and JetBlue Airlines.

Aug 2014 the SIA group Chairman Mr. Stephen Lee announced an alliance with Air New Zealand. The deal potential benefits include increased flight frequency to New Zealand. Also, there was a clause specifically customised to improve the customer benefits relative the flight cost.

Australia is an international tourist destination. SIA group interest in the Australia aviation industry was enhanced by the deal signed on 22rd Aug 2014, between the SIA group and Tourism Australia. The AUD 12 million entailed a three-year strategic marketing commercial deal.

Sep 2014 was a strategically significant adaptation date; SIA group entered into a partnership with Virgin Australia allowing base customer sharing, allowing the customers of Kris Flyer and Velocity Frequency to convert miles and point between both programmes. Feb 2015 SIA group, launched the newest class of travel. A consultancy services to clients about holidays.

Singapore vs. Germany culture.

Reference to the 6-D model of the Hofstede centre of strategy, culture and change. Singapore demographic composition is 77%, 6% Indian, Malay 15%, and Expatriates is about 2%. The dominant culture is Confucian Chinese.

The following is the comparison graph based on the 6- dimension Model of Hofstede.

Power Distance Index

SAI group named as the most attractive employer for three years in a row in the Asian Continent. The employees productivity scale rates are high. This may be accounted by the Confucian culture dominant in the region. Centralised organisational is effective; SAI group has a lean management structure as an adaption to the dominant Asian culture. While in Germany Leadership and Control is generally disliked. Therefore, decentralised mode of management is dominant. Open, direct and participative management style is preferred. Lufthansa has a wide based management structure, highly decentralised and practicing active delegation practices.

Individualism verses Collectives.

Germany has 67 scores of individualism, with low levels of societal interdependence. The nation is dominant middle-income earners, at a level of self- actualization. Freight services are in high demand in Germany with small family society set ups, due to this nature Lufthansa faces high legal risk exposure. In Singapore individualism score of 20. People look out for each other in exchange for loyalty. There are lower administration expenses in Singapore There is low legal risk exposure since people have a high sense of interdependence.

Masculinity vs. Feminine

Singapore score is 48. Slightly inclined to feminine, quality of life is a sign of success, sympathy, consensus and levelling with others are admired. The company has a high investment in sponsoring programs and community charity programs.

In Germany, there are high levels of competition. Success is on titles and material definitions. There are high levels of self-esteem with high expenses on legal and innovation. Lufthansa has a high investment in Germany Wing Airlines.

Uncertainty Avoidance.

Germanys have a low-risk propensity and they normally substitute risk with expertise. There is extensive analysing of deals with the heavy involvement of expert teams. Lufthansa has signed significant numbers of productive synergic partnerships deals. However, in a year SIA group has sealed over 200 partnership and alliance deals. This may be due to the risk propensity between the two cultural backgrounds.

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