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These include being the first airline
to implement baggage charges;
working to eliminate the need for
check-in desks (by offering online
check-in facilities); and charging for
options such as seat reservation
and priority boarding. This
consistent search for new ways to
transform costs is the essence of
the cost-leadership strategy. In the
12 months ending March 31, 2013,
Ryanair transported nearly 80
million passengers and announced
record profits of $753 million,
despite a rise in fuel costs.
Singapore Airlines (SIA) by
contrast, pursues a differentiation
strategy. The brand’s major drivers
are groundbreaking technology,
innovation, quality, and excellent
customer service. It maintains the
youngest fleet of aircraft among
major air carriers, and keeps to a
stringent policy of replacing older
aircraft with newer, better models.
SIA has always been first to take
delivery of new aircraft types.
Singapore Airlines recognizes that
innovation is short-lived in the
airline industry. New features and
ideas can easily be copied by other
airlines, so it continues to invest
heavily in innovation and technology
as an integral part of achieving its
differentiation strategy. The airline
runs a comprehensive and rigorous
training program for cabin- and
flight-crew to ensure the customer’s
in-flight experience is consistently
excellent. The success of its brand
strategy and its entire positioningWORKING WITH A VISION
around service excellence mean
that customers are more than
happy to pay a premium price.
Porter’s generic business
strategies can be used by any
company to achieve a competitive
advantage. However, the
competitive environment consists
of more than just present rivals;
changes in the industry and
environment add to a constantly
changing business context. For this
reason, strategy choice must be
regularly reviewed and checked. ■Singapore Airlines’ customer service
ethic is personified by “The Singapore
Girl,” who portrays the idea of Asian
hospitality. Her image has become
a successful brand icon.
Ice cream with a difference
Quirky flavor names—such as
Imagine Whirled Peace, Chubby
Hubby, and Brownie Chew
Gooder—set Ben & Jerry’s ice
creams apart. Ben Cohen and
Jerry Greenfield started the
company in 1978 and wanted it to
be alternative. According to Jerry,
“if it’s not fun, why do it?” Ben
claims to have no sense of taste,
so he relied on texture (what he
called “mouth feel”)—big chunks
of added ingredients such as fruit,
chocolate, or cookies therefore
became the brand’s signature.Consumers are prepared to
pay a premium price because
of the ice cream’s all-natural,
high-quality ingredients and
innovative flavors—months of
research go into perfecting the
taste. The company’s strategy to
differentiate itself from the
competition extends beyond the
product. The organization is
active in social campaigns such
as gay marriage, buys only from
fair-trade suppliers, and
considers environmental aspects
in production and delivery.Ben & Jerry’s ice cream is now part
of the Unilever brand, but continues
to use the differentiation strategy it
adopted to become a market leader.