Tiger airways reviews 2017

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BACHELOR OF BUSINESS (MARKETING)

MKTG1275_1720 Strategic Marketing

Lecturer: Param Alahakone

NAME

STUDENT ID

May Thazin

S3565683

Htoo Htoo Aung

S3590990

Lo Yu Xuan

S3565661

Eugene Tan Jian Cai

S3504412

Contents 1.0 Introduction 1 1.1 Tiger Airways’ History. 1 2.0 External Environment Analysis 2 2.1 Context 2 2.1.1 PESTLE 2 2.1.2 Industry Life Cycle 3 2.1.3 Industry Driving Forces Analysis 3 2.1.4 Industry Key Success Factors Analysis 4 2.1.5 Industry Outlook 4 2.2 Competitors 5 2.2.1 Porter’s Five Forces Model 5 2.2.2 Competitors Analysis 7 2.2.3 Positioning Map 8 2.3 Customer Analysis 8 2.3.1 Size of Market 8 2.3.2 Market Segments 9 2.3.3 Trend and profitability of Market 10 2.3.4 Influences of Buyer Behavior 10 2.4 Collaborator Analysis 11 2.5 Company 12 2.5.1 Porter’s Value Chain 12 2.5.2 VRIN Framework 15 2.5.3 Product Life Cycle 16 3.0 SWOT Analysis 17 4.0 TOWS 18 5.0 Corporate Strategy 19 6.0 Current Business-Level Strategy 20 7.0 Recommended Business-Level Strategy (Analyzer) 21 8.0 Marketing Strategies 22 9.0 Implementation Plan 25 10.0 Conclusion 26 11.0 References 27 12.0 Appendices 34

rmit-logo.png MKTG1275 - Strategic Marketing

rmit-logo.pngMKTG 1275 Strategic Marketing

1.0 Introduction
TigerAir was established in 2004 by Singapore Airlines (SIA) to compete against Low-Cost-Carrier (LCC) competition that had entered the region. It owned 5 sub-brands: TigerAir Singapore, TigerAir Australia, TigerAir Mandala, TigerAir Philippines, and TigerAir Taiwan. Some have ceased operations due to continuous unfavorable financial results, while others are performing barely. TigerAir is enduring fluctuating financial results and is struggling to stay relevant in the market.

1.1 Tiger Airways’ History.
Initially adopting an expansionist strategy, mass ordering of airplanes and acquisition of multiple internationally based LCC-airlines were untaken to accomplish its ambitious expansion of overtaking SilkAir and SIA for short-haul routes.

In 2010, mass pilot resignation and technical faults caused flight cancellations, affecting up to 2700 passengers. TigerAir Australia was also grounded in 2011 due to safety violations. Canceling flights to an earthquake stricken location further aggravated already negative consumer impressions. In 2011, total expenses rose by 22%, resulting in operating losses of $83.4m for TigerAir Singapore, and $69 million for TigerAir Australia in 2012. Furthermore, TigerAir Mandala ceased operations due to low profit margins.

Overall, minimal profits and massive losses were registered throughout 2008-2016 resulting in plummeting consumer confidence.

2.0 External Environment Analysis
2.1 Context
2.1.1 PESTLE
Economic

· Forecasted growth in travel demand in emerging Asian markets fueled by rising disposable incomes across the Asia pacific region (Chan 2000; Ngoo, Tey & Tan 2015).

· Increase in travel between Asian countries due to heightened economic development has increased demand for short-haul flights (Goyal & Negi 2014; IATA 2013).

Social-Cultural

· Global population is set to increase from 7.3 billion to 8.5 billion in 2030 - Asia to contribute 500 million (United Nations 2017).

· Mass Globalisation has influenced more consumers from emerging markets to travel out of their communities.

Technological

· As reported by TrendWatching (2017), consumer trend of increasing desire for online connectivity has led to many airlines establishing online communities to improve brand image (Michael 2016).

· New aircraft technologies such as the Airbus A320neo reduce fuel consumptions by 20%, which reduces cost (CNN 2016).

Legal

· Airlines must attain ICAO’s standard of air travel rules and regulations before operating in participating nation’s airspace (International Civil Aviation Organization 2017).

Implications

Overall, the external environment of low cost carriers is opportunistic for TigerAir. Specifically, technological advancements and the rising power of the Asia market are advantageous for TigerAir.

2.1.2 Industry Life Cycle
Industry_Lifecycle.jpg

As reported by Brons et. al (2002), due to increasing air travel demand and consumer price sensitivity, the LCC industry was in growth stage. However, the LCC industry is currently in its late growth stage as competitors have become highly competitive and product offerings are homogenous.

2.1.3 Industry Driving Forces Analysis
Based on the analysis done in Appendix 7, the key determinants of the drivers of industry changes are:

· Accelerated Connectivity Growth – Future growth includes an all-in-one mobile app tracking system in response to growing consumers needs for connectivity (CNN 2016; NZ Herald 2016).

· Evolving technological landscape – As reported by CNN (2016), 3D printing is growing in aviation manufacturing. Also, airlines manufacturers are focusing their efforts into sustainable aviation technology (Airbus 2017).

· The changing traveler– OAG (2016) reported that consumers are increasingly keen to explore new destinations within Asia pacific.