Individual Assignment Business Strategy and Enterprise Modelling

Rizqi Ghani Faturrahman

29120382
YP64-B
1. How can the experience at SIA can be implemented in Garuda Indonesia business strategy? (Such
as strategies, policies, commitments, innovations associated with the existing conditions of Garuda)

Answer:

Based on my opinion, the success of Singapore Airlines in implementing its dual strategy can be a
benchmark for Garuda Indonesia, by analyzing the strategies that have been successfully carried out by
Singapore Airlines and implemented into Garuda Indonesia's business strategy based on Garuda core
competencies. However, this implementation requires Garuda consistency in implementing the strategy
from SIA into their business strategy. Emulating SIA is not just about following its best practices; it’s about
implementing two seemingly contradictory strategies. This involves four broad principles; SIA implements
two seemingly contradictory strategies that involve four broad principles. Four broad principles are:

1) Harness The Power of Your People and Culture

• SIA strategy:

SIA’s human resource processes induce employees to keep costs low and boost productivity.
Employees also feel that they are all members of one family, so if they don’t deliver great service,
they’re letting down the company and their peers. Culture is deeply rooted in an organization’s history.
SIA has been concerned about losing money since it broke off from Malaysian Airlines, in 1972. At
the time, the Singapore government could not support a loss-making airline; besides, the city-state
didn’t need an airline because it had no domestic routes. Employees are constantly reminded that things
haven’t changed much today.

• The strategy that can be implemented by Garuda Indonesia:

Based on SIA strategy Garuda Indonesia should select, develop, and reward employees in ways that
incorporate aspects of both strategies in their everyday work. That will create an environment in which
can improve company efficiency. By looking at the culture of Indonesians, which are certainly different
from Singaporeans, Indonesians tend to prioritize themselves and sometimes do not have the same
goals as fellow employees, therefore Garuda Indonesia can embrace employees so that they feel one
family and so have a common goal, namely to advancing the company with this, of course, can affect
 Garuda Indonesia's business processes which, if consistently applied, will increase business
effectiveness and make it easier to develop.

2) Make Good Use of Technology

• SIA strategy:

SIA chose the widest possible seats for its Airbus A380s, but it also ensured that the seats have the
fewest possible parts, such as motors, cables, and switches, to keep the risk of malfunction and the cost
of repairs low. This results in service excellence at a low cost.

• Strategy that can be implemented by Garuda Indonesia:

Based on the strategy that has been implemented by SIA, Garuda can use technology as best as possible
with the aim of being cost efficient, for example the use of technology that has been used by Garuda
Indonesia for costs efficiency is to adopt Alibaba cloud technology. By migrating to cloud computing
Garuda was able to have more teams work remotely, the technology reduced network latency, Garuda’s
corporate website, mobile application gateway and booking and ticketing services had become faster.
By consistently using technological innovations in this digital transformation period, this is certainly a
great opportunity for Garuda Indonesia to develop and become a cost-efficient airline.

3) Utilize The Power of Business Ecosystems

• SIA strategy:

SIA has tied up with leading hotels, restaurants, and retailers to offer discounts to frequent flyers. It
selects high-end partners, such as the Ritz-Carlton and the Banyan Tree Private Collection and uses its
negotiating power to earn a commission every time a frequent flyer uses its partners’ services. The
discounts accentuate SIA’s differentiation while the additional revenues mitigate costs.

• Strategy that can be implemented by Garuda Indonesia:

Garuda Indonesia already has several hotel partners but only in certain locations such as Jakarta and
Bali. Seeing the strategy implemented by SIA Garuda must be able to expand its partner connections
outside the Jakarta and Bali areas in order to expand its business processes and also be able to
commission every time a frequent flyer uses its partners' services. By increasing the number of hotel
partners, Garuda can offer discounts to its customers, which makes Garuda different from its
competitors.
4) Make Investment Decisions Strategically
• SIA strategy:

SIA invested $700,000 to build a facility that enables chefs to taste food under pressurized flight
conditions because a person’s ability to taste food declines by about 40% at an altitude of 30,000 feet
because of the dry air. This ensures that SIA’s cuisine tastes good in the sky and allows its chefs to get
their dishes right the first time. It’s often impossible to calculate the return on initiatives like this, but
they are worth making because they contribute to differentiation and lower costs.

• Strategy that can be implemented by Garuda Indonesia:

Garuda Indonesia must focus its investment on technological innovation and services as implemented
by SIA, namely 433, 40% on training, 30% on revising processes and procedures and 30% on creating
new products and services every year. By focusing 30% on investment, Garuda Indonesia continues to
grow every year by evaluating consumer feedback, it can be a reference for what technology and
services consumers need and can become an innovation that can help the company's effectiveness.

So, it can be concluded that implementing the strategy that has been carried out by Singapore Airlines is
not easy and fast, Garuda Indonesia must be consistent in implementing the new strategy and must be able
to adapt to digital transformation and also be prepared for unpredictable external conditions such as the
current covid pandemic.