How To Provide High Value In Competitive Industries

By M. Dana Baldwin, Senior Consultant

Strategic Planning Expert

Providing superior value through a formal strategic planning process to determine what your targeted customers want is a key to success.  Good strategic planning not only identifies the targeted customer wants, but also permits a company to select their targeted customers (their niche) from the spectrum of customers in the total market.  Some companies get this concept and become ongoing winners.  Examples of this include Apple and Singapore Airlines.  Apple has been analyzed in depth, so let’s look at Singapore Air.

In a recent survey, Singapore Airlines was named World’s Best Airline by Conde’ Nast.  The remarkable thing about this is that Singapore has won this award 21 of the 22 times it has been awarded.  How has Singapore been able to consistently provide such excellent service and maintain a good level of profitability for so many years?  How have they developed the capability to provide excellent value for so long? 

Singapore Airlines operates one of the youngest fleets in the world.  Newer airplanes have a number of benefits for both operators and for customers.  Because the planes are newer, they are usually more reliable, having fewer breakdowns than older planes.  Because the planes are newer, they will likely  be more efficient to operate than older ones.  And because the planes are newer, customers will have up-to-date amenities and comforts, thus having a more enhanced travel experience. 

Singapore also invests heavily in training their staff in all aspects of operating the airline.  The people of Singapore Air are trained to deliver excellent service in the cabin, on the ground and in the terminal.   Singapore actually has one of the lowest costs of operations of any airline, with a cost below 7.5 cents per seat mile, which is actually below many of the so-called budget airlines.  What is interesting is that Singapore actually staffs each flight with more than competing airlines.  They provide superior service on every flight.  Among frequent fliers, the reputation of Singapore Air is outstanding! 

One more factor: Singapore runs the entire operation with a very small corporate staff.  Their administration costs are among the very lowest in the industry.  This helps the profitability of the airline as well.

What is the point we are making here?  Simply put, in order to compete and compete well in an extremely competitive marketplace, a company must provide service and value at an appropriate price.  People will pay for results which reach their expectations.  This is true at every level of service and value.  For poor or minimal service, people expect to pay only a modest amount, so the perceived value is commensurate with the price paid.  For more exceptional service, with the perceived higher value, a company may realize a higher price and/or become the supplier of choice.  On occasion, one will encounter a company like Singapore Airlines that provides exceptional service and exceptional value, all at a competitive price.   

How is this to be accomplished?  By focusing its efforts on those parts of the business which add value, and minimizing or eliminating those parts of the operation which do not add value or for which customers won’t pay, a company can be seen as exceptional.  This may be done across the spectrum of price and features, in commodity markets and specialty markets.  Excellence and attention to what really matters to the people who purchase your service or products are some of the keystones of a successful strategy.  As you develop your strategic plan be sure that you identify what differentiates you in the market in your customers’ eyes.  If you need assistance in developing your strategic plan to deliver high value to your targeted customers, please contact CSSP, Inc.

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2011 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution

Dana Baldwin
 

  • One reader emailed Dana with the following comment:

    Dear Dana

    I was recently forwarded an article that you have written about Singapore Airlines and Strategic Planning and I enjoyed reading the article.

    I am a regular flier on Singapore Airlines (SQ) and pleased to say that I am one of their 400 “Lifetime” Priority Passenger Scheme passengers. (This level of PPS is no longer awarded).

    My background is also from the airline industry having worked at QANTAS and then as a consultant for Singapore Air, Malaysian Airlines, Thai Airways, Cathay Pacific Airways, Air New Zealand, Ansett Airways, China Airlines and Philippine Airlines.

    All of the things that you say regarding modern aircraft, cabin crew, staff training and service are 100% accurate when it comes to SQ. If I could add one comment to yours, if I may….

    In my experience with Singapore Airlines, one thing that, I find, adds to the passenger experience is “consistency”. By this I mean they do the same thing on every flight. In my flying experience with other airlines each flights passenger experience could be significantly influenced by the cabin crew and how they we feeling that day. The same aircraft flying the same route with the same food etc but the experience different because of the attitude and service delivered by the cabin staff. SQ has taken this out of the equation through consistent service attitude and style as well consistent announcements and crew communications almost making each flight a “copy” of the previous flight and independent of how the crew felt that day.

    They have also been consistent with their brand since 1972 when Malaysia Singapore Airlines split into Singapore Airlines and Malaysian Airline System. Their aircraft have obviously changed but their logo and paint schemes have only marginally altered in that time. They have also been consistent with their use of the “sarong kebaya girls”. This uniform has been a trademark of Singapore Airlines and has not been changed I believe since it was introduced. If you think how many times British Airways have changed their cabin crew uniforms and aircraft colours…it has not helped them get 21 out of 22 awards. Virgin appears to be a fad airline… no consistency of product.

    In summary, consistently doing the same thing has made SQ service product excellent.

    Regards

    Kim

  • M. Dana Baldwin is a Senior Consultant with The Center for Simplified Strategic Planning, Inc. You can find more information at http://www.cssp.com.

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