International Business Management - Tiger Air

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International business management

Table of Content

  1. Executive Summary

2.Introductions

3.Business Environment

3.1 The entry mode

3.2 Entry Method

3.3 Competitive Environment

3.4 The corporate Strategy

4.Conclusions

5.Reference

1.Executive Summary

This report intends to describe about Tiger Air is a successful airline which is runs healthy in Asia, now it plans to entry Europe market to expand its business, also it wants to give European customer a unforgettable flight fly journey. Tiger Air Europe is a Russia based airline which is order to provide low ticket price, reduce its flying costs and unnecessary service. Tiger Europe will establish its selling online for customer.It is easily for customers to buy tickets. Tiger will also provide customer an reasonable price. In a brief, Tiger wants to giving customer most precious flying experience and reach to top of the Europe value chain. The following paragraphs will explain what Tiger does in detail.

  1. Introductions

The company based on Singapore, Tiger Air established in 2004. It has a slogan “get the real deal”, it offers reasonable ticket prices by dispelling services to passengers. Tiger Air has Limited constituted with 4 different area airlines, Tiger air Singapore, Tiger air Australia, Tiger air Philippines and Tiger air Mandala. The online of Tiger Air spends to 50 destinations across 13 countries in Asia.In order to extend the more users, Tiger air Singapore operates a fleet of 48 Airbuses A320-family aircraft. According to Bloomberg Business week.com, As an comparison to the year 2012, Tiger air Singapore reported that booked passenger of June, 2013 was approximately 432,000 against 365,000 for the same period a year ago. This result explains that the company’s reputation and brand image is unceasing increased and well-managed.

The one thing in common for all of budget airlines to promise to their passengers is the most fundamental services such as regular services for planes, security and on-time performance. Notable performance among these three essential elements is the on-time performance in 2012. According to Singapore Business Review (SBR), Tiger Airway had 86.38 percents on-time flights in 2012 compared to the 80.87 percents performance of Singapore Airlines. It mentioned that the Tiger Airway was ranked as 10th best performing airlines within Asia and Pacific and there was just nearly 6 percents of difference with the 1st ranked company, J-Air.<Staff Reporter 2013>

3.1 The entry mode

Tiger air will set up a selling online in Europe Market, from network sale to outlet distribution, looking for award to giving customers warm service for buying ticket. <Unknown 2013>

Tiger signs an agreement with travel agency, includes sales agent helps selling Tiger’s ticket to consumers, if sales agent sell ticket successfully,Tiger could give sales agent premium as award.

3.2 Entry Method

<Tiger Airway Annual report 2012 >Social factors:Every single factor involved with social and cultural influences varies from country to country. Unlike sensational impact of budget airline in Asia & Pacific, most of European low cost airlines suffered due to consumer’s mind from social and cultural factors. Most of European people put their emphasis on services than essence of transportation. Tiger Airway Europe seems to reinforce their pricing strategy or services to the customer with lowest price.

Technical Factors:Russia hassophisticated630 numbers of air-port facilities centralized in Moscow. 50 out of 630 airports work as internationalairport. The 630 numbers ofairportsin Russia are design to use as a major source for exporting petroleum and other natural goods to European Union.The rail road system inRussiaisquitepoor tohandleexporting business toEuropeancountriesandthere isa security risk factors on the way.That is the reason whyRussiangovernmentspends their budget to build a concrete distribution system.

Economic factors:Russia ranked as the 8thamong the world economy and the potentiality is quite high enough to be the economic giant. The country has an abundance of natural resources including timer and fossil fuels. As what the research shows, that Moscow is the city with a highest number of billionaires and security level. Additionally, Moscow gives an opportunity to take geological advantage to Tiger Airway Europe. As a result, Moscow is the most suitable city to operate Tiger Airline Europe.

According to the documentation from GFK, the purchasing power of average consumers in Europe is around €8.6 trillion Euros based on the year 2012. This corresponds to an average purchasing power of €12,802 Euros per inhabitant across the 42 countries in Europe. When it compares with the data from the previous year, amount of per capita is increased by 2.1 percents.

Environmental factors:Unstable Oil prices would influence all of airline industries to make their ticket price to be ridiculously high. This incident that all of full service airlines and no-frills carriers would meet is not only opportunity but also hindrance of Tiger Airway Europe. It is a great time for Tiger Airway Europe’s to have strong reputation with extremely affordable price. On the other hand, The business would suffer with fundamental operating cost.

Average precipitationlevel ofMoscowis quite low than other counties in Europe which is 586mm. Moscow has a humid continental climate. The record shows the highesttemperature during summer time isnearly 37°C. On the other hand, the low temperature of winter time is around -42°C. To maintain the air carrier business, Tiger air Europe should have technicians withadvancedtechnology in orderto handle the technological disorder due tofreezing problem during winter.

Political factors:Russia has become the eighth largest economy in the world after economic reforms in 1990s. From the 1990’s to current year, Russian government strived to privatize the industry. However, the conservative forces in Russia from the formal Soviet Union congest economic activities with nationalism. This political issue of Russian government would be an obstacle of Tiger Airway Europe to smoothly operate a business.

For those who are engaged in business in Russia require to pay taxes. As a company in Russia, it is mandatory to register at a tax office if it intends to do business in Russia for more than 30 consecutive days in a year. Exactly same with Singapore’s policy from the department of man power, Foreign citizen who planning to work in Russia must hold a working permit or ID document which states the place of his or her residence and name of the work place. For people who hold a permanent working permit in Russia require to pay 13 percents of their income for a personal income tax. However, for those who temporarily employed in Russia has a responsibility to pay 30 percents of income for a personal income tax. Moreover, Value Added Tax (VAT) in Russia is typically around 18 percents.

3.3 Competitive Environment

Target Market:The target market customer of Tiger Air Europe is the individual who is willing to cost more efficient and get more convenient from airline. For example, some consumers don’t want to eat their set meal during the flight time, because they think its not a necessary choice for every customer, or maybe sometimes they already had ate their meal before boarding. What’s more, a part of customer also don’t want to check-in their luggage, hang-luggage is totally enough for them, it is the reason that they perhaps just take a short-term vocation or business, they don’t need quite a lot stuffs for their flight, and also they don’t want spend a useless costs. And these kind of economical individuals are the customers who are targeted by Tiger Air Europe. In terms of these kinds of reasons, Tiger Air Europe comes up with several marketing strategies for their targeting customer, such as you don’t need to spend more payment for the service that they don’t want to use like set meal and check-in luggage. But, if customer wants to use this kind of additional services they definitely could experience it by paying more costs.

Marketing Position:Comparing with other kinds of airlines, Tiger Air Europe decides to be the most valuable costs airline in Europe. As far as our team researched, there are nonsexist a lot of budget airlines in Europe, most of the airlines in Europe are high-level service airline likeDeutsche Lufthansa Airline and British Airline, but at the same time, higher-level service means higher cost. At this time, it is definitely a huge potential opportunity for Tiger Air Europe, our strategy team will provide our customer an affordable ticket price compare with these high-level airlines. Tiger Air Europe’s marketing position is lower than luxury airlines but quite better experience than other budget airlines. Perhaps what Tiger Air Europe will stimulate the whole society of Europe going to take budget airline for their vocation or business inthefuture.<Internet center for management and business administration 2013>

3.4 The corporate Strategy

Core Product/Service:Tiger Europe core products obviously are flight experience. By Europe’s airport network, Tiger intends to establish a flying network around the Europe, in order to serve customer better than other budget airlines, also provide an affordable price which is lower than other normal airlines. Tiger also emphasizes on research and feedback that came from customer, then try their best to make them fulfilled with Tiger Air.<Phillip Securities Research 2013>

Expected Product/Service:To ensure safe and supply fast check-in boarding. Tiger will train its captain strictly before they start controlling plane, only if Tiger owns such a good pilot, that Tiger could build a good image within customers. To provide fast boarding is also another expected service that customer really likes, because they don’t want to waste time to waiting that long queue for check-in boarding.

Augmented Product/Service:Although Tiger doesn’t supply food and beverage for free, but if customer wants it they also could provide it during the flight, so Tiger will provide authentic Europe food for improving, because the food on budget airline isn’t delicious, that’s the improvement what Tiger could develop in the future.

Pricing:As what our strategy team mentioned before, what advantage Tiger Air Europe owned is more affordable and attractive price, comparing with other different category airlines. Just like what Tiger Air Asia does recently, Tiger Asia provide such a wonderful price for their customer, which is almost half price compare with other high-level airlines, such as Singapore Airline orKoreanAirline. The whole market situation is that consumer would like to pay more costs on traveling itself if the person who takes airplane is use for traveling, they are pleased to pay there bills on high-level hotel, more expensive local food and any other things rather than airplane. In a word, nowadays customer prefersto cost more on service, not only focus on airplane. If Tiger Air could supply an air ticket only with 200 dollar, but if you take other airlines have to pay approximately about 400 dollar, the most of customers definitely will keep chasing the lower price. It is all because the experience of Tiger Air Asia’s success, our strategy team does believe Tiger Air Europe could follow the way from Tiger Asia. Lower price, more customer, and finally more profit.

Distribution (Placement):Firstly, it is online Distribution. Tiger will establish an official website, in order to serve Tiger’s customer who prefer a more convenient way to purchase their ticket. As far as our team researched, on the one hand, most of major airlines absolutely have their own official website for online sale. On the other hand, these websites also could introduce about their company’s history, culture and commission. These ways maybe are also another fantastic strategy for firm’s image. Secondly, Tiger Air Europe also will sell ticket by some authorized agents, thus customer who doesn’t could handle online selling can purchase there for more convenient. Thirdly, there is no doubt that Tiger Europe will open some outlets in the major cities around the Europe.

Promotion:Tiger Europe will always provide some special promotion for its customer in order to keep them stay in Tiger Air. For example, during the time when Russia celebrates its National Day, Tiger will supply quite special worth ticket for their Russia customer, such as buy one ticket get one free, it means if you want travel another country in Europe during National Day Promotion with one of your friends, you only need to pay one ticket payment as well. In addition, although Tiger Air Europe’s general headquarters is in Russia, butregardless of which nationality you are, only if your country is in Europe, you can enjoy this kind of special promotion. It means every Europe country has its own National Day promotion during that time. What’s more, Tiger Europe will always provide one promotion called buy 4 get one 1 free. Absolutely it is an awesome information for family traveling.

Implementation and Control:Implementation: as what our team mentioned before, Tiger Air Europe’s issue is how to make Tiger’s ticket price lower than competitor’s? In another word, how does Tiger Europe achieve its target marketing and earn profit? Firstly, Tiger Europe will cut the unnecessary cost for their customer during the flight time, for example, ticketholder has to pay the bill for set meal if one really feel hungry. By using this way, Tiger absolutely could save quite a lot cost. Tiger also won’t provide free check-in luggage, it means if you want to consign more luggage, you also have to pay more for that. But in another consideration, this new strategy makes a lot of customers who doesn’t have much package saving a couple of payments. What’s more, our flight will always be arrive destination around mid-night, it is because airplane’s parking fee is more cheaper than any other time. In order to become the strongest giant in budget airline industry around the Europe, Tiger Europe will also sign a protect contract with Russia Government. It involves that Tiger Air will pay quite more tax to Russia Government rather than any other same-level airlines, but Russia Government has to protect Tiger Air and won’t allow other companies get entry this market. Thus, Tiger Air Europe could be the monopoly and create more profit from this quite huge market.

Control: firstly, Tiger will strongly advise their authorized agents to advertise their air ticket. Because as most people know, if customer want to book an air ticket from travel agent, customer perhaps has plenty of options about which airline he could choose, many factors will impact his decision, such as the image of the airline, price of the ticket and so on. So now we made this strategy, if authorized travel agent strongly advises their customer to purchase Tiger Europe’s ticket and finally that customer buys it, Tiger Europe will give extra bonus as rewarding. After that, because it is international marketing, so Tiger Europe will also establish many different transport hub around the world. In this way, Tiger could supply their customer more convenient service and also build a good relationship with major international airport around the world in terms of the successful experience from Tiger Air Asia. Tiger Europe does believe that if they provide such a good flight experience for customer, they will be Tiger’s brand-loyalty in the next years and come again.

Conclusion:

It is obviously that Tiger Air Europe’s business is like what Tiger’s objective announced: To be one of the largest budget airlines in Europe, provide the customer most valuable flight experience & service. In order to accomplish this goal, Tiger Europe does a lot of tough efforts, such as make an agreement with Russia Government and any other Europe Countries to protect Tiger air. All Tiger Europe does is for give benefits to their customer, at the same time they earn a couple of profits. They also doesn’t provide the unnecessary services which isn’t their customer want, they only want their customer pay the bills that really needed during the flight time. Tiger Air Europe definitely consider for their customer, save anything that no need to waste. Especially in 21st century, people are going to create environment-friendly society, that’s the reason why budget airline could keep going in 21st century.

In conclusion, Tiger Air Europe could supply an affordable price of ticket, warm service from stewardess, conveniently purchase ticket, safe and trustful image of airline. Tiger Air Europe does believe based on Russia transport center, they could achieve their target goal and objective in Europe.

4.Conclusions

It is obviously that Tiger Air Europe’s business is like what Tiger’s objective announced:To be one of the largest budget airlines in Europe, provide the customer most valuable flight experience & service. In order to accomplish this goal, Tiger Europe does a lot of tough efforts, such as make an agreement with Russia Government and any other Europe Countries to protect Tiger air. All Tiger Europe does is for give benefits to their customer, at the same time they earn a couple of profits. They also doesn’t provide the unnecessary services which isn’t their customer want, they only want their customer pay the bills that really needed during the flight time. Tiger Air Europe definitely consider for their customer, save anything that no need to waste. Especially in 21stcentury, people are going to create environment-friendly society, that’s the reason why budget airline could keep going in 21stcentury.

In conclusion, Tiger Air Europe could supply an affordable price of ticket, warm service from stewardess, conveniently purchase ticket, safe and trustful image of airline. Tiger Air Europe does believe based on Russia transport center, they could achieve their target goal and objective in Europe.

  1. Reference

[1].From Singapore Business Review (SBR),Airportperformance report, Published: 07, June, 2013

http://sbr.com.sg/aviation/news/tiger-airways-beat-singapore-airlines-in-2012-time-performance

[2].Definition of Market Analysis

http://www.netmba.com/marketing/market/analysis/

[3]Tiger Airway Annual report on 2012

https://www.tigerair.com/news/AR_20120331_FY11_12_Annual_Report.pdf

[4].Unknown (Unknown) Low-cost Carriers Market Study,Accessed: 28th September 2013

https://sites.google.com/site/budgetairlinemarketstudy1/case-study/tiger-airways

[5].Tiger Airways' low fares strategy working well: Phillip Securities Research | Singapore Business Review. 2013. Tiger Airways' low fares strategy working well: Phillip Securities Research | Singapore Business Review.Accessed 29 September 2013 http://sbr.com.sg/aviation/markets-investing/tiger-airways-low-fares-strategy-working-well-phillip-securities-research. [].

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