The major issue of the service market is the allocation of contradictory investments and organizational processes. The unique problem mentioned in the article is related to the difficulties of implementing the dual marketing strategy. The authors of the article state that “executives believe that cost leadership and differentiation, globalization and localization, and size and agility are fundamentally contradictory and can’t be reconciled” (Heracleous & Writz, 2010, p. 146). It is evident that the two varied processes are complicated to manage. However, for example, the combination of globalization and localization sometimes is the only optional variant to advance the company. As a result, despite being one of the significant challenges, the duality strategy allows companies to combine high-quality services and cost-effective management.
One of the most significant ideas SIA implemented into its management system is the 4-3-3 rule, which establishes efficient investment distribution. The resources are disturbed in the following proportion: “40% on training, 30% on revising processes and procedures, and 30% on creating new products and services” (Heracleous & Writz, 2010, p. 147). Such an approach helps the company to overcome the mentioned problem due to the focus on people. SIA executives believe that the service advancement’s significant components are employees. As a result, the investments into people take a substantial part of the company’s budget spending. Moreover, another strategy to overcome the problem discussed above is the allocation of centralized and decentralized innovations. Combined with the distributed innovation approach for efficiency, the applied principles eliminate the possible investment and operational contradictions. Improving the quality of service through a cost-effective approach is a complicated process requiring a highly structured organization ideology and processes. SIA is an ideal example of how the mentioned contradictions can be dealt with.
Heracleous & Writz. (2010). Singapore airlines’ balancing act. The Globe: Harvard Business Review, 145–149.