Competitive Strategy and Marketing Mix of Cathay Pacific Airlines

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Extended Business Project – Individual Report Framework
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Contents
Introduction...................................................................................................................... 2
Company Overview..........................................................................................................2
Competitive advantage.....................................................................................................4
SWOT Analysis........................................................................................................4
Porter’s Five force model.........................................................................................6
Marketing mix of Cathay Pacific...............................................................................7
Recommendations...................................................................................................8
Conclusion....................................................................................................................... 9
References..................................................................................................................... 10
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Introduction
This particular report is all about analysing the overall performance as well as marketing
strategies used by “Cathay Pacific Airline” during their regular course of business.
The primary motive behind approached this project report is to examine their current
market position and growth chances in near future time. Apart from this, the present
overview of the organisation performance has been discussed effectively. Along with
that various decisions internal management has been making to attain competitive
advantage and planning to attain those in near future time has also been covered in this
project. However, an effective marketing mix has is being followed by the company to
sustain long term in the market (Young, 2012). On the basis of every possible analysis it
has been recommended certain changes to be made so that maximum chances of
growth could be attained in coming time.
Company overview
Cathay Pacific is one of the leading international cargo airlines with the primary hub is
situated in Hong Kong international airport. The company is having an operation in more
than 190 locations in around 60 nations through its subsidiaries for the scheduled
passenger as well as cargo services. It consists of the large-body airplane which covers
Airbus A350, A330 and Boeing 777. This airline was established in 1946 by Roy C.
Farrell. There are around 22700 employees working with their valuable skills and
knowledge because of which they are able to earn total revenue of HK$97.284 billion.
The best part of this particular airline is that it is the ninth largest company in relation to
sales as well as fourteenth as measured in accordance with market capitalisation. The
valuable partner of this airline company offers one of the most non-stop operations to
Hong Kong with Chicago and other parts of the nation (Malhotra, Birks and Wills, 2013).
It is worth attaining airlines business or purchasing a commercial or leading class
vouchers to make usage of the Cathay Pacific lounges at the global airfield. It is very
much kid's friendly airline that provides the best services as per the choice of the
children. The tourist can call prior to request a special kind of kid’s meal that comes in
accordance with a juice as well as a cute curly straw. All the items could be friendlier
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other than an adult person, but note that in case people are traveling to business class,
in that case, dessert menu consists of a wafer and berry choice which is entirely
different from kid's meal. Before as well as after take-off every child could receive a
well-packed activity pack that is being saved people during the time. In accordance with
the Cathay Pacific in-flight entertainment option that is pretty tough to operate out of
things to watch on Television. There are millions of movies that can be made available
to the tourist as their own choice. Every corporate and economy traveller are used to
give insulated earphones and have somewhat wider as per the selection of their show.
The best part of this airline is that it never gets a delay because of which it is considered
as one of the efficient flight of all time (Bean and Hussey, 2012). Cathay Pacific airways
overall performance can be analysed by its transportation services which are around
92.8 percent, passengers transport in 2016 is about 34.8 million as well as use for the
purpose of freight and main transportation is 1.8 MT. At the close of 2017, this company
operates in 208 aircraft. The total net sales are being distributed as 51.3 percent from
Hong Kong and China, 10% sales outcome would be received from Japan, 11.7% from
Asia and rest from other parts of the nations.
The Cathay Pacific group is being reported as attaining a valuable amount of profit
HK$2345 million in the year 2018. They basically aimed at searching for the latest
sources of earning, building their network and boosting the Hong Kong hub that would
deliver maximum value to their customers through improving overall productivity and
growth chances in near future time. The entire global marketing team is held
responsible to formulate, execute reliable incorporated communication campaign to
portray Cathay branded products as well as services such as fare promotion and other
crucial aspects that are profitable for the company (Baker, 2016). Marketing strategy of
this airline is consists of segmentation, market targeting and position are more valuable
processes of planning. The mass market is categories into small segment under which
client can exchange their similar set of needs and desire. The market tends to identify
the segment and choose the more reliable and profitable segment to the estimate
areas. A Cathay Pacific target market is travelers by chosen interpretation package and
MICE upgrade. The maximum emphasize the assurance to Hong Kong is been variation
locating tactic of the company. Besides Cathay Pacific Airways offers the best quality
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facilities and services from their sole. In order to strengthen their overall position, they
usually depend on the current brand building ability. In context to build strong customer
relationship management, Cathay Pacific has made specific efforts on developing long
term relations with their partners (Noe and et.al., 2017).
Competitive advantage
One of the crucial factors that have to contribute toward Cathay pacific growth as well
as sustainability is their entry into China. The reason behind is that it is one of the world
largest lucrative markets by a population of more than 1.3 billion. The country is
providing significant and attractive market segment for Cathay Pacific. There are
various internal as well as external factors that are responsible for creating an effective
competitive advantage to the company in different parts of the nation.
SWOT Analysis
Strength:
 Technology Savvy: The positive strength of Cathay Pacific is continuously observed
through customer preferences as well as regular research into their behaviour on the
basis of data analytics or digital potential. This would provide an idea to formulate high
customized services option for the client (Namada, 2018).
 Safety: In relation to safety and comfort, Cathay Pacific has been aimed at providing
maximum security and they are unwilling to compromise in their safety. It has been
developed in such a manner so that operational efficiency can be maximized
accordingly.
 Performance-oriented workforce: The Company has been examining that only happy
employees would be able to deliver the best quality services to their passengers. In
relation to ensuring that they could get considered the necessary level of services, the
airlines would train their staffs on a regular basis and assist them to get motivated so
that they can give best from their own side.
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Weaknesses:
It is basically related to making improvement in the brand and services facilities that are
delivered to their customer. Some of the key weakness is mentioned below:
 Poor fuel contract: It has been seen that Cathay Pacific has been tried to sign fuel
agreement that can give them a large number of losses on fuel cost. This contract
would have committed the carrier to great fuel charges for the period of 4 ages and it
would drastically impact the bottom line.
 Over-dependence on value: It has been seen that the company is struggling to deal
with low-cost players in order to attain maximum gain in the near future. These
minimum cost players would be able to fill up more seats on a plane in context to the
Cathay Pacific. It would turn entirely on dependant on a value other than increasing
sales volume.
Opportunities:
 Growing demand for international travel: Cathay Pacific is having a steep increase in
the total number of people in Asia that have a constant need to travel to international
location both for the business purpose of any functions. Looking forward to this, there is
immense scope for the airlines to increase the maximum to foreign destinations
(Wagner III and Hollenbeck, 2014).
 Productivity enhancement: By the utilisation of advanced technology backed services
that could lead to improve operations and overcome costs in coming time. With the
expansion in air freight in cargo hubs such as Dubai can be an innovative opportunity
for the company in coming time.
Threats:
 Competition: It has been seen that there is a lot of competition in the airline sectors
nowadays because of companies such as Lufthansa, Air France, Air India, and
Singapore airline. They are providing best quality services to their customers.
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 Costing: There is a certain key element of cost in relation to the airline which is fuel
rates those are fluctuating and can be managed the cost in relation to the dynamic of
cost is a huge threat in near future.
Porter’s Five force model
This model is basically used to make industry analysis to check whether the company is
able to meet the needs of society. The forces are more frequently taken into account to
measure the competition intensity, profitability position of Cathay Pacific or market
stability at the same point of time. Manager of Cathay Pacific can use this particular
model to analyse the level of competition and how to cope-up with the present market
scenario. These forces are mentioned below:
Threat of substitute products and services in airline sector: It has been seen that in
case the threat of substitute is maximum then the company, then it has to either
continuously make an investment into their research and development activities or their
risk behind out to disruptors in the sector.
Bargaining power of supplier: In case the supplier would have strong bargaining
ability then they would easily extract maximum cost from the Cathay Pacific airline. It
would also impact the potential strength of an organisation to maintain maximum
average profitability in the airline industries so that chances of growth can be enhanced.
Rivalry among existing player in the industry: In case of competition there is huge
intense then it tends to be more difficult for existing players like Cathay Pacific airline in
order to earn the reliable amount of profit from their overall service delivery (Gordon,
2012).
Bargaining power of buyer: In accordance to the buyer which is having strong
bargaining power other than they usually tend to drive minimum cost. Hence, there are
certain limiting the overall potential of Cathay Pacific airline to increase its sales through
sustainable earning.
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Threat of new entrant in sector: It has been seen that in case there is the strong
threat of new entrants in the overall airline sector other then present players would be
willing to earn minimum profit in accordance to reduce the threat from their new players.
Marketing mix of Cathay Pacific
The company tends to offer best and reliable service to their customer so that they are
remaining in the market for a longer period. If offers both passenger and cargo facilities
at the same time. Cathay Pacific has been acknowledged as a world's biggest aviation
in the global dome for supervision cargos.
Product:
It has been seen that Cathay Pacific used to operate both in local as well as
international flights by the assistance of their subsidiaries Dragon and Air Hong Kong. It
offers commercial as well as logistic flights services to their customer. Leading class
merchandise consists of extensive and relaxed seat preparation. It also offers power
sockets, TV and a small cabinet. In fact, this aviation is offering various facilities to first-
rate low-cost class such as; additional resting seat with all kind of facilities like the
personal TV of 10.6-inch, wide pillows, and meal table.
Place:
In relation to the Cathay Pacific which is a well-managed airline sector which tends to
operate through headquarter which is situated in Hong Kong. An organization would
extended its functioning amenities in various countries such as; 60 nations through 200
hundred and one destinations that consist of Shanghai, London and so on. Cathay
Pacific is having an extensive distribution network that would assist in offering their
product and service in an easier manner. The airline offers easy booking through their
official website as well as accessible doorways with that it has arrived into the
corporation contracts (Xu and Tang, 2014). Tickets are also provided through the travel
agents, Cathay Pacific official, and airport counters.
Price:
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It has been seen that Cathay Pacific would have been graded as a tenth in terms of a
wide carrier in relation to the overall sales amount and at 14th position in relation to the
market capitalization. By the close of 2016, it has been posted their earning and overall
net revenue at HK$92.751 million and HK$274 million. An enterprise has been
embattled to the middle, upper and business class as their overall selected customer
that can choose dependable flight as well as more relaxed amenities. The total charges
rely on various elements such as route, destination, days and season. The airline
company has been kept a variable pricing policy that relies on the given aspects. It has
been using economical cost policies because it encountered numerous competitors in
this industry.
Promotion:
The airline company is considered as an international reported company that has been
using various schemes to develop optimistic product visibility. The selected organization
has began a cell phone application that assists in subscription flying associated data to
the traveller in the period. It does have a certain social media platform to their benefits.
They are using Facebook, Twitter, and YouTube. It efforts to link nonstop with their
close customer via this platform as well their own official website. It would also consist
of promotional events such as tax-free spending and trips to determine their fresh
cottages and facilities. The company has been subsidized by various generous activities
in order to create brand awareness (Huang and Sarigöllü, 2014).
Recommendations
According to the above analysis of the Cathay Pacific overall performance, it has been
seen that they are providing reliable services as per the requirement of the customers.
But at the same time, there are certain things which are also required to be changed so
that the maximum growth chances can be created in near future time. Looking for the
next 2 to 5 year, the Cathay Pacific airlines need to cut down the fare charges so that
maximum passenger can take advantage of availing the services of this airline. The
destination must not be concise to the only certain nation it could be required to reach
various nation so that maximum opportunities can be created in the near future. The
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Safety and security measure for the passengers should be given maximum focuses in
the coming years so that chances of any mistake can be avoided prior to the journey.
There is various cost leadership method which is not reliable for Cathay Pacific. A
Product differentiation plan would be required to be adopted as per the requirement of
the competitors. The aim of this is to catch up with the premium customer and create
customer value at the same time.
Conclusion
From the above project report, it has been concluded that the performance of the
company is can be analysed by the help of using various strategy and approaches. It
could provide the right knowledge or ideas about the current market position of the
Cathay Pacific airline in the market. Further, in order to gain a competitive advantage in
the near future, the company is using SWOT and five force model to measure the
current position. There are various aspects that can be associated with the
organisational competitive position it can be analysed through using marketing mix
method of the company. The analysis has been done to attain maximum sustainability
in the near future time.
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References
Books and Journals:
 Baker, M.J., 2016. What is marketing?. In The Marketing Book(pp. 25-42). Routledge.
 Bean, J. and Hussey, L., 2012. Marketing Public Sector Services: essential skills for the
public sector. HB publications.
 Gordon, R., 2012. Re-thinking and re-tooling the social marketing mix. Australasian
Marketing Journal (AMJ). 20(2). Pp.122-126.
 Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome,
brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp.
113-132). Springer, New York, NY.
 Malhotra, N.K., Birks, D.F. and Wills, P., 2013. Essentials of marketing research.
Harlow: Pearson.
 Namada, J.M., 2018. Organizational learning and competitive advantage. In Handbook
of Research on Knowledge Management for Contemporary Business Environments (pp.
86-104). IGI Global.
 Noe, R.A., 2017. Human resource management: Gaining a competitive advantage. New
York, NY: McGraw-Hill Education.
 Wagner III, J.A. and Hollenbeck, J.R., 2014. Organizational behavior: Securing
competitive advantage. Routledge.
 Xu, K. and Tang, K., 2014. Five-axis tool path and feed rate optimization based on the
cutting force–area quotient potential field. The International Journal of Advanced
Manufacturing Technology. 75(9-12). Pp.1661-1679.
 Young, G., 2012. Beyond Lion Rock: The Story of Cathay Pacific Airways. Faber &
Faber.
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