1.1 Concepts of Strategic Management
According to the book ‘Business Strategy and policy’ (Smith, Arnold & Bizzell, 1991) “strategic management is the process of examining both present and future environments, formulating the organization's objectives, and making, implementing, and controlling decisions focused on achieving these objectives in the present and future environments”. An enterprise achieving its goals means that the firm is being competitive and that is the key point the new managers cannot forget when building strategies. They must have enough knowledge to critically analyze the internal and external organizational environment identifying threats, opportunities, weaknesses and strengths, in other words, they have to be able to plan the short and long future of the organization.
Ideally, the process of creating a new range of strategies to an enterprise bases on three steps, as Dr. Azhdar Karami (2007) states in his book ‘Strategy Formulation in Entrepreneurial Firms’:
1. Strategy Formulation
2. Strategy Implementation
3. Strategy Evaluation
The first one is, basically, the study of the current situation of the company and its competitors plus the alignment with the objectives that should be simultaneously formulated. The second one is the practical part of the strategy making that can involve training, allocating resources, delegating tasks, changing the structure and adjusting when necessary. The third and last step is the measurement of the efficiency and effectiveness of the implementation process, according to the book ‘Exploring the Corporate Strategy’ (Johnson & Scholes, p 237), it is evaluated against the subsequent success principles: suitability (would it work?), feasibility (can it be made to work?) and acceptability (will they work it?).
So, following these steps enterprises are expected to build easier a clear and satisfactory strategy to reach their goals.
1.2 British and Singapore Airlines scenario (goals, mission and strategies)
The international economic crises in 2008 affected most of the airlines around the world causing relevant losses in terms of revenue and also brought deep changes in the managerial strategies of the companies. In order to adapt to new air trade policies and to reestablish its position in the global market, the organizations that survived during the crises, understanding what would be the new tendencies of the airline field, are well-established and tending to increase and expand its influence intercontinentally. Two of the main international airlines in the world, British Airways and Singapore Airlines, will be respectively analyzed in terms of its recent strategic policies and mission. The first one, considered the biggest international airline in the United Kingdom, has developed its five important strategic aims that are exemplified in the Annual Report and Accounts of the company (2010):
“Be the airline of choice for long haul premium costumers”
“Deliver an outstanding service for costumers at every touch point”
“Grow our presence in key global cities”
“Build on our leading position in London”
“Meet our costumer’s needs and improve margins through new revenue streams”
British Airways clearly shows that the organization strategies focus on the passenger market instead of the cargo market, obviously, because it is the most contributor to the revenue of the firm. Thus, the company aims to, mainly, expand its business to the global cities of tomorrow but does not forgetting the global cities of today, in case London and New York. Furthermore, the airline wishes to improve its relationship with the costumers, providing new products and premium services to enhance their loyalty. In terms of business plan, British built its strategy following the core mission of the company, which is, according to Annual Report and Accounts (2010), “become the world’s leading global premium airline”. Therefore,