Transcript Increasing Competitiveness of Cathay Pacific Airways Ltd

Increasing the Competitiveness of
Cathay Pacific Airways Ltd. in the
FCC Air Travel Industry
Objective, Scope and Limitations
Project Objective
To Increase the Competitiveness of Cathay Pacific Airways
Ltd. in the FCC Air Travel Industry
Project scope
Cathay Pacific’s passenger transportation service
Limitations
a) Covers only passengers sector of CX’s various businesses
b) Initiated out of personal interest and is not authorised by
CX
c) Based only on publicly available information
Methodology
Gathering of primary and secondary data
Performing macro-environment and microenvironment analyses
Identifying the key findings and suggesting
strategic options
Evaluation of the selected strategic options
Recommendation on the strategies
Recommended strategies’ benefits that are
leading to increased Competitiveness
Introduction:
The Airline Industry
FCC and LCC
Capital Intensive
Extremely Vulnerable
to External Environment
Introduction:
Cathay Pacific’s History
24 September 1946
Roy C. Farrell &
Sydney H. de Kantzow
Douglas DC-3 – ‘Betsy’
In 1948 partnership was
restructured
In 1959 Merger with
HK Airways
Introduction:
Cathay Pacific Today
5-Star Airline
In 2009 ranked as ‘Best
Airline of the Year’
Headquarters in HKIA
Introduction:
Cathay Pacific Today
110 Destinations worldwide
Introduction:
FCC Sector Competitors
Singapore Airlines
A flag carrier of Singapore
Established in 1947
HQ in Changi International Airport
Asiana Airlines
South Korean No.2 Airline
Established in 1988
HQ in Incheon International Airport
Qatar Airways
A flag carrier of Qatar
Established in 1993
HQ in Doha International Airport.
Findings: Primary Data
To test whether Core Competencies are actually underpinning Competitive
Advantages and lead to Competitiveness, Questionnaire has been developed and
survey results show:
Hypothesis No. 1
Tests the importance of Superior Quality
(Supported – 62%)
Hypothesis No. 2
Tests the Importance of Superior Innovation
(Supported 57%)
Hypothesis No. 3
Tests the importance of Superior Customer
Responsiveness
(Supported 56%)
Hypothesis No. 4
Tests the importance of Superior Efficiency
(Supported 70%)
Would you choose an airline company that
provides superior (exceptional) quality service?
No, I'm not
concern with
Yes
quality
62%
16%
Not sure
22%
Is superior efficiency important criteria for you
when choosing an airline company?
Not sure
27%
No
3%
Yes
70%
Findings: Macro-environment
Key Findings
Suggested Strategic Option
Market growth due to
economic recovery and
fast growth of developing
Asian countries
Growth Strategies
Capitalize on Asian market growth
Hyper-competition in the
industry with strong,
government-supported
rivals. 5 star airlines
competing on service
quality and their offers
have little differentiation
Market Penetration
Widen customers’ database to
increase market share
Product Development
Create unique offers and services to
differentiate itself
Findings: Macro-environment
Key Findings
Low Cost
Carriers is a
growing
substitute on
short and
medium haul air
traffic
Suggested Strategic
Option
Branding
Create relational value to
strengthen ties with
existing
and attracting new
customers
Findings: Micro-environment
Key Findings
Strong financial
position
Sophisticated and
innovative
products and
processes
Suggested
Option
Strategic
Growth Strategies
Invest in growing market
visibility to enjoy more
profits and gain bigger
market
share
Market Penetration
Findings: Micro-environment
Key Findings
CX is a
recognized
airline which
receives
numerous awards
yearly
Suggested Strategic
Option
Branding
‘Best Airline of the Year’ in
the
industry should
work for the firm and grow
customers’ database
Evaluation: Strategic Options
Growth Strategies
Branding
Market Penetration
Product Development
Forward Integration
Horizontal Integration
Evaluation: Strategic Options
Strategic
Options
Suitability
Feasibility
Consistency
Acceptability
Branding
Yes
Yes
Yes
Yes
Market
Penetration
Yes
Yes
Yes
Yes
Product
Yes
Development
Yes
Yes
Yes
Forward
Integration
No
No
No
No
Horizontal
Integration
No
No
No
No
Recommendations:
Corporate +Business Level
Strategies
1.
Branding + Differentiation
2.
Market Development + Differentiation
3.
Product Development
+
Differentiation
Recommendations:
Resources required
Financial
Technological
Innovation
Marketing
Human Resource
Recommendations:
Resources Need to be Developed
Marketing
Target Marketing
Iconic Brand Image
Market research
Leveraging on Social responsibility
Human Resource
Select and develop ‘Best People”
Develop training Programs
Regular training for all employees
Promote unique service in adds
Conclusion:
Benefits of Branding + Differentiation
Building brand equity benefits customers and CX
Enhances customers’ confidence in their purchase decision
Increases travelers’ satisfaction
Reduces cognitive dissonance
Provides a basis for differentiation
Attracts new customers and helps retain existing
Protects market share
Distances CX from competitors
Allows for charging a higher premium
Increases or at least secures margins
Secures bigger market share
All of the above benefits are leading
to Increased Competitiveness
Conclusion: Benefits of
Market Penetration + Differentiation
‘Selling more’ of the same products/services to the present market
Increases market share and pushes out competitors
Widens customer base and increase the market share
Lowers costs per passenger
Improves capacity utilization
Increases margins
All of the above benefits are leading
to Increased Competitiveness
Conclusion: Benefits of
Product Development + Differentiation
Targets existing market with new or re-designed products (services)
Attracts more travelers by unique and creative products/services
Creates customer loyalty
Increases revenue
Sustains profits
Widens the gap with rivals
These benefits are increasing
overall CX’s Competitiveness
Any Questions?
Thank You For Your Attention!!!