Some documentations are too noteworthy to keep private and start to go viral on Youth, Backbone, and other social media vehicles for the public eye's enjoyment. For more, television segments and documentaries at the present circle around exploring various cultures across the globe enticing viewers to get off the couch or the office and genuinely experience what the world has to offer. This Is the present state of the global tourism Industry. Traveling has become trendy. Nations are rallying to reap economic benefits from this rising demand acting upon it through promotional efforts for their respective countries to the international market.
Tourism attracts tourists, who are essentially consumers, fortifying consumption in the country. Followed up with stronger funding funneled into tourism efforts, creative angles and promotional tools are witnessed left and right. This is all happening at a rapid pace. Fundamental to the success of tourism is how one place is connected to the other - this is where transportation becomes vital. Tourism attempts are deemed futile if travel is hindered by the ease of transportation. The airline industry, to be specific, makes tourism possible beyond land travel. It is key to the displacement of people of different needs and abilities.
Company Background Scoot
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Scoot is Singapore-based company founded in 2011 as a subsidiary of Singapore Airlines in response to the rising popularity of low-cost (budget) airlines. It claims to be the airline for the young, young at heart, and value seeking consumers (Flatfoot, 2015). Scoot focuses on destinations between Singapore and Australia and China. This medium to long haul focused strategy allows them to concentrate marketing efforts between few destinations, slowly adding to its list as it gains momentum in the market. It has announced its additional flight destinations for 2015 - Japan and
South Korea will now be added to the list of its destinations. Its direct competitors include Starters and Eurasia, both having started much earlier than Scoot. Unlike other low cost airlines like Tiger or Starters, Scoot has a business segment. Despite its business model (LLC), it still attempts to reach more segments by offering business class service. Overall, the company is fresh and catchy for those seeking to save and travel comfortably. Products and Offerings Planned and Current Deconstructionist and Planned Destinations Australia Gold Coast Melbourne Available by 1 Novo 2015 Perth Sydney
Marketing Planning is initiated by an external and internal analysis of the company. In this manner, all factors affecting strategies may be considered. In an attempt to deepen knowledge and apply theories as regards marketing, this paper focuses on Scoot Airlines to determine what kind of marketing strategies are appropriate for the company as it taps its five-year mark. External analysis, as well as an internal screening of its own capabilities, is presented to guide succeeding marketing plans of current trends and stature of Scoot that is vital to any marketing strategies to be implemented. It sets directions and crosschecks objectives to know whether or not marketing goals are aligned with the reality (environment) of Scoot. Scoot was chosen for its youthful appeal. However, it seems as if only a fraction of travelers have heard about it. Personally, it has come to my attention only because an acquaintance has recently flown by Scoot.
As further research was done, it can be aid that Scoot has strong potential to rise above its competitors given it formulates an ideal, appropriate marketing planning. Again, prior to any strategic decisions, critical analysis of its market environment must be performed. Critical Analysis Airlines are traditionally seen as a luxurious way to travel. However, the popularity of low cost carriers (Lacks) has changed that notion. It is no longer as expensive to travel as it used to be. It is important to determine what factors then are contributing to the conditions of the low cost airline industry.
Using the simplified framework known s PESTLE, an overview of what is shaping the industry, considering most vital factors from its external environment, can be projected. This helps narrow the strategic marketing direction for future planning. Political The influence of government policies is extremely felt in the airline industry. Given the high volume of travelers' lives being in the hands of these airline operators, this industry is highly monitored and regulated. Passenger safety is a serious matter to businesses and governments alike, not to mention various stakeholders.
Therefore, operations are powdered by strict regulations and imposition of protocols observed lovably and locally by various nations. Further, there are issues regarding monopolies and collusion occurring in the industry. Governments usually prevent best interest as top priority. Monopolistic behaviors award airline companies with too much market power - these are not conditions that would sit well with governments as it is in violation of anti-trust laws (Celebrity and Williams, 2014). Governments stress the importance of keeping the public in a position where real demand reflects in prices and product offerings of businesses.
The airline industry is greatly affected by economic conditions across borders. Travel expenses are dependent on disposable income, business expense allocation for travel, and other economic conditions pertaining to ability or inclination to travel. During the global financial crisis of 2008, airlines suffered major losses from the recession experienced by nations Oho and Fowler, 20014). Travel dropped dramatically - people could not afford to travel. Further, input costs affect low-cost carriers greatly. Their offering is price sensitive.
Rise in oil prices EOT fuel), salaries, and other inputs directly affect the price of their fares. Economic conditions are vital o the success of Lacks, becoming an important vector in terms of business and marketing strategies. Social Various social changes have taken place in society today. Consumers are now more demanding since they have access to information, fast information, allowing them to know what is it that they deserve. This is it enhanced by the retirement of the baby boomers, heralding the entrance of the millennial.
Millennial appreciate instant gratification, living a fast lifestyle. Moreover, there is now a higher demand for travel. People are seeing how much cheaper it can be and how enticing to see there spread out around the globe and seek excitement or escape. Multinational companies are sprouting everywhere. This expansion increases demand for movement. These are the current trends relevant to low cost carriers like Scoot. Technological advancements is utterly fast. Efficiency and reliability of aircrafts have increased due to enhancements happening rapidly.
Although recent mishaps in the airline industry have taken place, statistics show that it is still much safer than driving Jacobs, 2013). Not Just aircraft technology, this applies with communications, gadgets, Internet speed and all other forms of technology. This factor is very much useful for Lacks for they depend on costs being lowered. Technological advancement might cost money at first but decreases operating costs in the long run as it is utilized. It lessens the need for labor, for example. Environmental The trend is green - the whole world is now paying attention to companies' efforts to decrease its carbon footprint.
With typhoons and climate change being a reality, governments and interest groups have put a price on carbon emissions and corporate practices that are detrimental to mother nature. This means that low cost arises need to deal with this demand, perhaps new operating standard. Legal A plethora of regulations are imposed on airline industries. Lawsuits are imminent if a company does not abide by these rules. More than government imposition, regulatory boards are steadily present to see whether standard operating procedures are followed by these airlines.
These are international standards that are imposed. Different countries have other specifications when it comes to the of terrorism or a viral outbreak. Borders are strongly protected from smuggling and other illegal activities with each its own contraband definition. For example, Singapore has strong laws against tobacco while other countries do not. Although it is the customs duty to ensure that these are followed, airlines are also responsible for working in close ties with these officers. Making it easier for them means a smooth sailing relationship with the nation it does its business in.
The airline business, as can be deduced, is highly sensitive to its external environment. Given the nature of the business, the world pays attention to what it is doing more closely than it would a fast-food chain. Traveling is become a need and it is not as easy to substitute as one would do with a burger. An external analysis of its environment is merely a link in the chain. To formulate a proper marketing strategy for Scoot, its proximal environment must also be assessed - its industry. Industry Analysis - Porter's Five Forces Michael Porter (1980) is famous for breaking down industry attractiveness assessment to five main factors.
Some scholars posit that it is an oversimplification of industry analysis. However, its use has been undeniably effective given its persistence in the scholastic community. What it looks at is the intensity of competition, how easy it is to participate in the industry, switching costs for nonusers, and how powerful an influence do consumers and suppliers have in the industry. To better understand the current state of the low cost carrier market of the airline industry, Porter's five forces is used as a guideline.
Bargaining Power of Customers
In this particular industry, bargaining power of customers is high. Low cost carrier industry, as the name suggests, battles for price. This means that customers are very price sensitive and can easily disregard the airline name and go straight to the price in making their decision. Travelers for leisure fit this description perfectly. It is so easy for them to Just choose not to fly or delay flight plans until prices are seen as affordable/reasonable. Business travelers are the same - with current advancements in internet efficiency, meetings can be held at the comfort of their homes, offices, or a venue of their choosing. This places customers with the upper hand.
There are also other options for travel such as trains and buses, comparably lower in cost; although not as direct a substitute, it gets the Job done. For business-to-business segments, bargaining power is still high for there are plenty of airlines to choose from. In estimating discounts and contractual matters, a company that wants a good rate to bring its 3,000 strong employee base, for example, can negotiate for better rates from various Lacks. Deals between businesses with, say 3,000 employees, would mean a steady income stream for the airline industry making it profitable for them despite the discount awarded.
Bargaining Power of Suppliers
In this industry, the bargaining power of suppliers is high mainly due to their limited number. The two top companies, Airbus and Boeing, supply majority of the world's commercial aircrafts. Other links in the supply chain include: banks providing ending, air navigation service providers (ANSI), not to mention airport or ground tech support. According to Market Realist (201 5), suppliers make more money or have higher profits than airlines with returns varying for each type of service. Generally, they make more money. Airports (and their services) are owned or ran by national (local) firms.
Most of them are monopolies. It only makes sense because there are limited airports in the world. This means that suppliers have the upper hand making the industry difficult for airline operators if it is less experienced. Intensity of Competition The intensity of competition among Lacks is strong. All are competing for customers who are price sensitive and there is very little room for distinction. Prices of offering are not far from each other. Business tactics apply - some opt to include tax in total cost displayed, some trap their customers by adding taxes later.
In the end, it's all about pricing. Each compete by removing or adding amenities fully present in typical airlines (luxury airlines) to attract different customers with different needs. Overall, the competition is truly intense. The consolation is that all competing firms incur the name costs overall. The limited number of suppliers causes this. At the end of the day, they all need to make money and cannot price at a loss. The competition is fair in that arena; the only differentiating factor truly lies in their marketing strategies.
Threat of New Entrants
New entrants are of medium concern. Generally, it is airlines already existing in the market that enter the Lacks industry by creating a subsidiary targeting the price sensitive consumers. It is difficult for fresh companies to start an airline and compete unless their financial backing is sound enough to maintain an airline business. However, existing airlines venturing in the LLC niche market might decide to, like SIS and Scoot, create subsidiaries to compete in this segment. With the same financial backing and experience transferred to subsidiaries, it might be increasingly challenging in the future.
Threat of Substitutes
Threat of substitutes come in from above the pricing strategies of Lacks and is moderate. Carriers that are not low cost (passenger airlines) have the same external environment factors affecting the industry. As costs go down for Lacks, cost also falls for these airlines. The disparity between the prices of Lacks and passenger airlines' (e. G. Congenial airlines: SIS, Qatar Airways) price offering for an economy class ticket might steadily become slimmer. If consumers start to feel that the differential in value is not enough to cover for the decreased amenities in budget aircrafts, the threat of substitute strengthens.
Promo fares from passenger airlines are decreasing for the price conscious travelers, threatening Lacks niche market. Synthesizing from Porter's Five Forces analysis, it can be said that the industry is hostile for any firm participating in the business. Almost all factors are at high, with the exception of the moderate threat from substitutes and new entrants. Existing players have business strategies to bank on to further lower price offerings. Marketing strategies must be competitive to attract consumer to choose Scoot over slim differences from rivals.
It is now important to assess if Scoot is internal capabilities to limit or extend the reach of marketing strategies in the future. Resource-Based View Tangible Scoot has started with an edge. It is a subsidiary of the flagship carrier of Singapore: Singapore Airlines. Starting with merely 8 employees, now with 600, it has grown its business focused on delivering low cost fares for its consumers. It does not use the happily 3 x 3 seating, small Boeing planes that one expects from a budget airline. It uses larger ass's to transport its passengers.
This alone is a strength that is yet to be matched by their competitors due to its backing from Singapore Airlines. Although these aircrafts are not brand new, it still sends the message that traveling with Scoot has better perks. Financially, it is strongly backed by its mother company. This gives them room to do business without having to worry about added costs comparative to those stand-alone airlines. It has other alliances as many airlines fall under Sis's name. Tiger Airways and Silkier are notable brand names considered as sister companies of Scoot. Intangible Committed Human Resource is its strongest asset by far.
It has employed people that are on the same page with the companies' goals and culture delivering the same message to its consumers. It is fun and youthful and that reflects upon its people as well. Strong corporate values is another intangible asset that is hard to miss. Their dedication to deliver what is promised to consumers is unmatched by other airlines in communicating the intended message. Comparing company websites (as this is here these Lacks showcase their personality), Scoot stood out by far for its fun-loving image in all corners of its business.
Juxtaposed to its competitors, Scoot has more or less the same resources as Starters and Eurasia. All of these companies are strongly backed in terms of financial support. However, Eurasia and Starters have more flights in Southeast Asia in addition to flights to Australia. They have a wider range of offering which can be a competitive weakness on the surface. On the other hand, this means that its competitors need to spend more money promoting for all destinations under its wing. Scoot can take advantage of this through concentrated promotional efforts at less cost (since the reach is Singapore, Australia and China more exclusively. ) This allows Scoot to get ahead of the market share in the particular region at a lower expense.
Internal and external analysis have been performed separately. SWOT analysis brings together all internal assets and pitfalls to match with looming opportunities and threats, turning it into a sustainable competitive advantage. Strengths Weaknesses Strong financial status; ample financial resources to grow the business due to its
Alliance with Tiger and Silk Air, supported by its mother company Singapore airlines provide access to valuable financial resource and knowledge Weak brand name image/company reputation Possess technology, aircraft assets, competencies, and attractive geographic markets Fairly new at the low cost carrier market Good customer service capabilities Opportunities Threats Technological advancements in different fronts Stringent regulations making it costlier to do business Increased consumer demand for travel Media attention on airline industry given recent mishaps Millennial making up significant number of consumers
Decreasing cost of inputs, particularly oil There are more strengths and weaknesses aforementioned and much more opportunities and threats. However, these factors highlighted and combined together point towards possible strategies that create a stronger competitive advantage for Scoot. Summary Although competition is intense, Scoot possesses much promise in succeeding in its niche market of low cost carriers. It has a mission vision statement and goals that communicate well with its target consumers. Overall, its branding is uniform and service is exquisite for a low budget aircraft.
It matches well with its target market. All it needs is a comprehensive marketing plan that takes into consideration all factors relevant to its firm and industry. As stated above, there are various strategic opportunities that it can take advantage of as it passes its five-year stage. Notable marketing objective for future planning include increase in promotional strategies that target millennial. Another issue is that of promotional strategies - compared to its competitors that have been around longer, it has yet to make its presence known enough to be widely considered by price sensitive consumers.
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