Strategic Planning & Analysis of Cathay Pacific Airlines - BTEC 7

This report presents a strategic plan for Cathay Pacific Airlines, beginning with an overview of the airline and its general environment. It includes a comprehensive environmental analysis using PESTLE and SWOT frameworks, identifies key stakeholders, and analyzes the competitive landscape. The report assesses Cathay Pacific's market position and conducts a competitive analysis against Singapore Airlines. Furthermore, it utilizes Porter's Five Forces to evaluate industry dynamics and suggests change activities with stakeholder feedback mechanisms. The report also details strategy selection criteria, future strategic directions, and an examination of organizational culture. It proposes a new vision and mission statement, defines financial objectives, and introduces performance measurement tools. The report concludes with an execution and communication plan, emphasizing effective scheduling and monitoring processes, providing a thorough strategic roadmap for Cathay Pacific Airlines. Desklib is your go-to platform for similar solved assignments and past papers.

5/31/2018
Business Plan |
Cathay Pacific
Airlines Strategic Planning

STRATEGIC PLANNING 1
Executive Summary
This report is being prepared in order to provide the overview of Cathay Pacific Airlines
which will involve the explanation of its basic general environment and current strategies that
it is implementing in order to survive in the market. It will highlight the role of stakeholders,
analysis of the competitive environment. Besides this, it will suggest some changes for the
company that are very important for future survival. Moreover, it will suggest some future
recommendations along with its execution and communication plan that need to be adopted
by the company.

STRATEGIC PLANNING 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................4
Overview of Cathay Pacific...................................................................................................4
Task 1 Environmental Analysis.................................................................................................5
Importance of Internal Analysis.............................................................................................5
Importance of External Analysis............................................................................................5
Key Stakeholders of Cathay Pacific Airlines.........................................................................6
Analysis of the Current Business Environment.....................................................................8
PESTLE Analysis...............................................................................................................8
SWOT Analysis.................................................................................................................9
Market selection of Cathay Airlines....................................................................................11
Product position...................................................................................................................11
Cathay Pacific Airlines position in the market....................................................................12
Competitive Analysis...........................................................................................................13
Strength and Weaknesses of Singapore Airlines.................................................................14
Task 2.......................................................................................................................................14
Porter Five Force Framework..............................................................................................14
Rivalry among Competitors.............................................................................................15
The threat of New Entrants..............................................................................................15
The threat of substitute products......................................................................................15
Supplier’s bargaining power............................................................................................15
Customer’s bargaining power..........................................................................................15
Change activities for Cathay Pacific Airlines......................................................................16
The process of Gathering Feedback from the Stakeholders.................................................16
Selecting a channel to communicate with the stakeholders.............................................16
Proper planning of the selected channel collecting the feedback....................................16
Scheduling team meetings................................................................................................17
Active listening to every stakeholder’s concern..............................................................17
Creating Action Plan........................................................................................................17
Implementing or applying agreed strategies....................................................................17
Strategy Selection Criteria...................................................................................................18

STRATEGIC PLANNING 3
Tests of a Winning Strategy.............................................................................................18
Future Strategy for Cathay Pacific Airlines.........................................................................19
Task 3 (a)..................................................................................................................................19
Organizational Culture.........................................................................................................19
Organizational Culture for new Strategy.............................................................................20
New Vision and Mission Statement for Cathay Pacific Airlines.........................................21
Financial Objectives.............................................................................................................21
Performance Measurement Tool..........................................................................................21
Task 3 (b).................................................................................................................................22
Effective Scheduling............................................................................................................22
Recognize obtainable time...............................................................................................22
Plan Vital Actions............................................................................................................22
Plan high-priority activities..............................................................................................22
Plan Contingency Time....................................................................................................22
Communication Plan............................................................................................................23
Monitoring and Evaluation process.....................................................................................24
Conclusion................................................................................................................................24
References................................................................................................................................26

STRATEGIC PLANNING 4
Introduction
Strategic planning is said to be very important for every organization as it offers an outline,
measurable goals and direction. It is a tool that is used for directing daily decisions of the
company and also for assessing development and altering methods while moving forward
(Albrechts, Balducci and Hillier, 2016). To use a maximum of the strategic planning, the
company need to provide careful thought to the strategic goals or objectives it summaries,
and provide backup for these goals with accurate, carefully investigated, computable
standards for assessing results (Abraham, 2012). This report is being presented in order to
prepare a strategic plan for the Cathay Pacific Airlines by evaluating its current business
performance. The report will perform the environmental analysis of the existing business plan
of Cathay Pacific Airlines, strategic options will be determined, and executing and evaluation
of strategy. The report will be divided into three tasks to analyze the current and potential
business strategies of the airlines.
Overview of Cathay Pacific
The Cathay Pacific Airlines is Hong Kong’s flag carrier, with headquarter in Hong Kong.
The airline’s subsidiaries and operations possess cargo services and scheduled passengers to
201 locations in around 60 countries around the world involving joint ventures and
codeshares (Cathay Pacific, 2018). Cathay Pacific Airlines drives a fleet of broad-body
aircraft involving Boeing 777, Airbus A350 and Airbus A330 equipment. The Cathay Dragon
which is wholly owned subsidiary operates its functions in 44 locations in the region Asia-
Pacific from its Hong Kong base. The company was established in 1946 and always remained
committed towards its home base, and putting considerable investments in order to develop
Hong Kong and convert it as the leading international hub of aviation (Cathay Pacific, 2018).

STRATEGIC PLANNING 5
Task 1 Environmental Analysis
Importance of Internal Analysis
An internal analysis is performed in order to identify the competence, competitive viability,
and cost position of the company in the marketplace. Performing an internal analysis also
evaluate the important information of the company i.e. strengths, weaknesses, opportunities
and threats which is called a SWOT analysis (Williams, 2018). The information extracted
from an internal analysis is very important as it can be used to create objectives of strategic
planning in order to survive and develop the business. A strong company make use of
updated equipment and updated technology to complete its work. The attainment of the
financial goals and objectives of strategic planning are analysed (Mukher, 2018). The internal
analysis is very important for an organization to identify its areas of weaknesses so that it can
overcome that. It helps in analysing the competencies of the firm and highlights the possible
opportunities for the business in future (MBA Skool, 2018). While performing in the market
it is very important to be aware of the changes taking place in the market such as
technological, economic and competitor’s strategies which can arise threats for the company
(Houghton Mifflin Harcourt, 2016).
Importance of External Analysis
The external analysis plays an important part in influencing the future of whole businesses
and of individual businesses. In order to uphold the company forward from its competitor, the
administration should regularly adjust their policies and strategies in order to show the
environment in which business functions (Teik, 2013). It is said to be a useful application to
perform an external analysis at the beginning of the review process of the strategy. The
external environment analysis involves various factors that affect the business such as
political, environmental, social, economic, legal, and technological (Boasson and Wettestad,
2016).

STRATEGIC PLANNING 6
Key Stakeholders of Cathay Pacific Airlines
A stakeholder is said to a party that has some interest in the business and that can influence
the business by its activities or can get influenced by the activities of the business. The key
stakeholders in a usual company are its customers, suppliers, investors, government and
employees (Rouse, 2018). Cathay Pacific Airlines has accomplished various achievements till
now and it is possible due to their stakeholders that are employees, customers, investors, and
shareholders, etc. The stakeholders of the company support them in communication strategy,
sustainable development strategy. It is very important that business understand the issues of
their stakeholders such that business can resolve it (Cathay Pacific, 2012). Various people are
attracted towards the airlines because of their way of doing business and how they do
planning to resolve the issues. Some of the concern of the stakeholders of Cathay Pacific
Airlines are:

STRATEGIC PLANNING 7

STRATEGIC PLANNING 8
Analysis of the Current Business Environment
PESTLE Analysis
Political
Political turbulence in main markets may lead to reduction in the traffic. Current example
comprises political turbulence in Thailand which leads in a severe decrease in number of
passenger traffic for a year. Other markets of the airline have also faced some mixed political
constancy over last year. Any main escalation in the political climate might lead in
influencing the business in the region.
Economic
Prices of fuel have perceived a severe decrease which has certainly influenced the aviation
player’s operating costs. Besides this, the Hong Kong Dollar continued to be strong as
compared to yuan and other currencies in the region of South-east Asia which was said to be
a turn-off for travelers. Travelers from South-East Asian and China destinations cover a

STRATEGIC PLANNING 9
maximum of the Hong Kong arrivals. Therefore, a tough Hong Kong dollar had a negative
consequence for Cathay Pacific Airlines on yield factor.
Social
Cathay Pacific Airlines promotes and endorse workshops and training programs for young
graduates. The airlines have taken the responsibility to take the initiative towards decreasing
illegal trafficking and trail supplier amenableness.
Technological
Cathay Pacific Airlines is focused towards investing in the technology in order to provide
possible comfort and positive experience to the customers. Airlines have invested in the
mobility and data analytics to enhance the experience of the customers.
Legal
Cathay Pacific Airlines is very much concerned about its brand and functions in the market,
therefore it tries to obey and follow all the rules and regulations implemented by the
government of different locations where they do their business. Moreover, the airline has
introduced antitrust proceedings in different jurisdictions.
Environmental
Cathay Pacific Airlines also consider and think about the betterment of the environment and
that is the reason why it is tool initiatives in carbon reduction and emissions trading
programmes (S&P, 2018).
SWOT Analysis
Strength
Cathay Pacific Airlines is one of the top airlines which provide comfort and lifelong
experience to their clients and passengers. They have a good experience and specialized in

STRATEGIC PLANNING 10
providing a friendly operating environment to the passengers. They have strong frequency
and connectivity of their flights. The airlines provide free of cost port status to the receivers.
Moreover, it also offers 24-hour cargo welcoming customs atmosphere and transparent and
simple tax system (Bhasin, 2018).
Weaknesses
Besides having such a strong position in the market and good brand image, Cathay Pacific
Airlines also possess some weaknesses that are the high cost of trucking, insufficient
connectivity with the mainland cities, high terminal cost of cargo, and customs inadequacies
at the border i.e. Chinese border.
Opportunities
Cathay Pacific Airlines operate its functions in a market where there are various options and
opportunities for the growth and development. Some of the possible opportunities for the
airlines are: development of the new and attractive infrastructure, aggressive release up of
airspace administration and it can pass new transshipment order (SWOT Analysis, 2011).
Threat
While performing in a competitive market besides possessing strong image and various
strengths business has to face some threats. The threats need to be focused by the company
should be taken some strong steps in order to overcome the effect of these threats. Whole
airlines industry is very competitive. The factors are dependent on the charges and facilities
obtainable along with it. Airlines profits are very sensitive that small changes in the charges
affect the demand by the customers. Fuel involves major part of the operating cost for that
company comprised of around 34% of the overall operating costs. The changes in such
essential factor in the operating cost are due to the external factor which cannot be controlled
by the management of the company.

STRATEGIC PLANNING 11
Market selection of Cathay Airlines
The objective of the marketers is to recognize the segments and choose which part of the
market segment needs to be a target in order to earn a maximum profit and offer services to a
large number of customers. A company can focus on an individual segment or various
segments in which consumers have the same type of requirements or needs provided by some
products. There are four various market segments in which Cathay Pacific Airlines focuses
on, the leading target of the airlines has been seen as the segment of commercial tourists who
are majorly sensitive about the quality in place of being sensitive about the prices. Cathay
Pacific Airlines mostly targets those travelers who visit for business to various locations;
arrive from Hong Kong, Asia, etc. These types of travelers can invest their money for their
comfort and entertainment. In terms of selecting the target market airlines is performing well
and earning good amount of profit by serving these segments (Chen’s Marketing Review,
2013).
Product position
Cathay Pacific Airlines is one of the leading airline brands which provide several services to
the flyers. Cathay Pacific Airlines does not only provide commercial flights it also offers
logistics services. The offerings of the airlines include:
First class: They are consisting of broad seats that could be transformed into the beds. It also
offers massage service, personal screens of television for the entertainment of the customers,
power sockets, etc.
Business class: Cathay Pacific Airlines business class has been designed by considering the
demand and their satisfaction level. The services of the airlines are designed in order to
reduce the tension and burden of the travelers and make them feel refreshing when they reach
their destination to attend business meetings or conference.