This is the analytical evaluation of the strategies of Cathay Pacific.

The main
purpose of this study is to highlight the company’s arrears of strengths and
weaknesses as well opportunities and serious threats for the company. This
paper has mainly focused on the related years of the case study. At first, the past
strategies of the company have been indicated with special reference to the
company’s motives and objectives. Then, the new strategies in response to the
change in the environment of the airline industry, including socio-economic
factors, have been selected for the company to aid in achieving goals and
objectives (Schaik, 2002);. In addition to indication and selection, all of these
strategies have been given specific value to attract the attention of the company
to the core and sensitive issues to convince the company for modifying strategies
in their areas of weakness. Similarly, the functional, corporate, and competitive
strategies have also been indicated in this part of the paper in which SWOT
analysis has been drawn for the company to enhance the company for further
growth. The basic purpose of this part of the paper is the strategic evaluation of
the company in terms of the competitive advantages of the company in the
context of SWOT analysis (Schiffmann & Kanuk, 2000. Then, a conclusion has
been drawn at the end of the paper in which the comparison of all the strategies
of the company has been made based on internal and external analysis.

Resource Analysis

The resource analysis technique helps to analyze the availability of healthy

resources. The main resources are Human, Capital, Money, and Infrastructure.
Human resources constitute an important dimension in the management of
services in their role both as performers of their services as costumers. People
as performers of service are important and therefore the firm must recognize that
each employee is a salesman for the company service (Booms and Bitner,
1981).
The importance of customers in service stems from the fact that most services
imply active and involved customer organization and interface. Service personnel
are important in all organizations but more so in an organization involved in
providing services. The behavior and attitude of the person providing service is
an important influence on the customer’s overall perception of the service and he
can rarely distinguish between the actual service rendered and the human
element involved in it. Costumers are very important for the firm because they
are going to influence other customers. The kind of customers that you attract
exerts an important influence on prospective customers (Doole and Lowe, 2004).

External analysis

Michael Porter put forward 5 forces of competition that affect an industry. A

Cathay Pacific airway is also affected by these forces in the industry of Aviation.
The forces of completion as decided by porter were the supplier power, threat off
substitutes, buyers power, degree of rivalry, and barriers to entry (Winer, 2007).
These forces influence the aviation industry because the aviation industry has
many competitors who compete with Cathay pacific airways.

About the forces of the supplier, the aviation industry requires resources such as
fuel, manufacture of aircraft, labor, and other supplies. These obligations lead to
a supply buyer relationship between the aviation industry and the firms that
provide resources to these companies. The suppliers of fuel are very influential
and have put the industry players in a situation that we are forced to change their
prices from time to time. Cathay Pacific airline has agreed with suppliers of fuel
to provide the fuel continuously but when it comes to pricing oil-producing
countries decide the price(Kotler, 2005).

In the barrier to entry to trade to entry to the industry it is not only the existing
company that produces a threat to Cathay Pacific airline but coming up firms are
a major threat to the industry. This is because it will affect competition among the
competitors and other players. The industry is not an industry where there is a
free entry and exit as in theory. Because the industry posses some uniqueness
which makes it impossible for easier entry of new competitors, this ensures that
there is the maintenance of high profits by a good competitor in the
market(Mohammed, Fisher, Jaworski & Paddison 2003).

To begin with, the industry requires huge investments in aircrafts this nobody can
wake up in the morning and think of starting an airline business. The airline
industry also requires competitors to apply some safety regulations in various
countries. These regulations are very expensive to implement and in some
countries like West Africa, the safety of the airports is always in question
therefore you find it is very difficult for some airlines to operate in those countries.
At times in those counties with poor sky visibility due to factors such as the
mangrove forests and heavy rains, have caused many airline accidents. Barriers
to entry to the industry are more than the usual equilibrium the market makes.
The increasing of profits or falling of products does not automatically attract a
new entry or cause exit in this specific industry because of the losses that will be
incurred in the long run or the cause of entering into the market (Kotler, 2005).

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The threat of substitutes is not well pronounced in this industry therefore Cathay
Pacific airways services only face threats from existing competitors. However,
from the economist’s point of view, a threat of a substitute occurs when service
consumption is influenced by the price adjustment of substitute services. Service
price elasticity is affected by alternative services but in this case, the alternative
service may be road transport, sea transport, and rail transport. This being the
only substitutes available to the airline industry can the airline should concentrate
more on rivalry among the competitors (Mohammed, Fisher, Jaworski &
Paddison 2003).
Another force that is affecting the industry is the power of buyers. This is the
impact felt by Cathay Pacific airline that the consumers have on the industry or
the company. When the buyers are very powerful, they will have the negotiating
power on the prices charged on service but in the airline industry rate consumer
are not organized to the point that they can influence the pricing which is left to
the market forces to decide. And the marker forces for this industry are
influenced by these mattes (Johnson, Scholes, and Whittington, 2006).

The degree of rivalry among the industry players affects competition even price.
In a very competitive industry, you find that profit at times can be reduced to zero
due to heavy competition. Hover it should be noted that the airline industry in
which Cathay Pacific airline Operates has very few competitors and in most
cases, the competitors are from different countries therefore the ability to reduce
the profit to zero is limited. To strengthen rivalry among the industry players
Cathay Pacific airline. Should analyze and pay attention to the quality of services
offered by competitors such as British services (Armstrong & Kotler, 2007).

PESTLE Analysis

Cathay Pacific airline does not operate in one country but operates in many
countries. Each country has its own rules and regulations, these rules and
regulations influence the operations of the airline. For Cathay Pacific airline to
succeed in any country they must adhere to all trade regulations imposed by
countries.. In some countries have unstable political airlines which make Cathay
Pacific airline avoid trading in those countries. Take for example the current case
in Madagascar. There is no stable government and therefore a company trying to
operate in that country will find it very difficult to invest there. In brief Cathay,
Pacific Airlines is affected by political factors which range from bad governance
to corruption institutes such as those in Colombia and Kenya (Elder, 2005).

Economical:- The consumption of airline facilities is influenced by the

purchasing power of the people or the target market. The current economic crisis
has contributed to the downfall in profits of the company because most people
reduced unnecessary traveling in the country while others change substitutes
such as road transport. Although the company reported an increase in sales they
were not stable because the number of routes was reduced. When examining the
revenue collected in the month of 2008, it will be interesting to note that Cathay
Pacific airline has an interest in sales although 42% increased by 49.2%. Most
revenues were generated from the middle-class target group which demonstrates
that the financial crisis did not affect the middle-class consumption of the airline
services(Cathay Pacific, 2007 Annual Report).

Social:-The social culture of the people in different counties has had an impact
on the marketing strategies of Cathay Pacific Airlines. The company has
considered these social cultures of various countries and they can structure their
marketing strategies to feed the diverse cultures. When Cathay Pacific airline is
traveling to China or the Middle East they have understood the types of meat to
be served to the customers. This has also affected their human resource policy
because when you are traveling to various cultures you must have one or two
people who understand the cultures of that country. Therefore ethnocentricity has
a great impact on the type of media they use in advertising the product in various
places (Crane, Kerin, Hartley, & Rudelius 2008).

Technological:-The introduction of business and Premier Class features seats

that unfold into a flatbed. Each seat also has direct aisle access. The Premium
Class is in a devoted compartment, which shares lavatories with the Business
Class cabin. The class has some mood lighting, wine selection, and in-seat
power as the Business Class cabin. All the seats have more legroom than in the
standard Economy. Owing to positive reviews and high demand after its
introduction, Cathay Pacific then re-launched its Premium cabin with added
business-class services, including amenity kits and improved dining services.
Premium Class has an innovative cohort seat design with added space(Cathay
Pacific, 2007 Annual Report).
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Legal:-There are various legal issues that are affecting Cathay Pacific airline
especially the trading rules that are always a thorny issue in the industry. The
industry is being affected by issues such as drug trafficking they should
implement strict rules which are deterring criminals from using their services
across borders (Keegan and Green, 2002).

Environment:-As a social responsibility issue Cathay Pacific Airlines has

implemented environmental protection such as helping in some countries to plant
trees as well as when they are serving the trees they serve in disposable utensils
this ensures that the environment is protected (Kotler, 2005).

Segmentation/ Key Success Factor/ Customers

The key success factors for this industry are the consolidation various factors
and overcoming weakness within the industry. The company has insurance that
they have a strong market position by implementing technology and entering into
collaboration in various countries. They have used innovation and service
development in ensuring that they remain focused on the market. The company
has remained focused through establishing various goals such as maintaining a
specific growth rate. They have segmented their market into economic class,
business class (Ries & Trout, 2006). It is upon the customer to decide which
segment fits him.

Strategic group analysis

The recent strategy implemented by industry players is enhancing research and

development in ensuring air safety for customers. Cathay Airlines has reached to
overseas market and this has enabled them to become an international
company. They have developed an aggressive marketing strategy that ensures
that their product reaches the market in an acceptable form. International
collaboration has been another strategic position for the company (Williamson,
Cooke, Jenkins, & Moreton, 2003).

References

Armstrong G. & Kotler P. (2007). Consumer Markets: Influences on consumer

behavior: Principles of Marketing, pp. 272-292

Booms, B. and Bitner, M. (1981) Marketing strategies and organizations

structures for service firms. In J. Donnelly and W. George (eds), Marketing of
Services. An American Marketing Association, New York.

Crane, F. G., Kerin, Hartley, & Rudelius (2008). Marketing: 7th Canadian Edition.
USA: McGraw-Hill Ryerson.

Doole, I. and Lowe, R. (2004) International Marketing Strategy, Analysis,

Development, and Implementation. Forth edition, Thompson Leaning

Not sure if you can write a paper on Cathay Pacific: Evaluation the Performance
and Strategy by yourself? We can help you
for only $16.05 $11/page
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Elder, A. 2005. Straying from the Flock: Travels in New Zealand. New York: John
Wiley & Sons.

Grant, R. M. (1991). Contemporary Strategy Analysis: Concepts, Techniques,

Application. Cambridge, MA: Basil Blackwell.
Johnson G, Scholes K and Whittington R, (2006); Exploring Corporate Strategy,
Prentiance Hall, 7 th Enhanced Media Edition,

Keegan and Green (2002); Global Marketing Management; Prentice Hall.

pp.326-339

Kotler, P. (2005). Principles of Marketing. New York, Melbourne Press, pp. 170-
194

Mohammed, R., Fisher, R. J., Jaworski, B.J., Paddison G.J. (2003). Internet
Marketing: Building Advantage in a Networked Economy, 2nd Edn, International
Edition, McGraw-Hill.

Ries, A., Trout, J. (2006), Positioning: The Battle for Your Mind, McGraw-Hill Inc.,
New York, NY, pp. 421-426

Schaik J.L., (2002); The Task of Marketing Management; (Pity) ltd, pp. 124-138

Schifmann L. G, and Kanuk L. L, 2000, Consumer Behavior, Chapter 16, Page

437-443, Prentice Hall

Williamson, D., Cooke, P., Jenkins, W. & Moreton, K. 2003. Strategic

Management and Business Analysis. New York: Butterworth-Heinemann.

Winer, R.S. (2007). Marketing Management, Prentice Hall, Upper Saddle River,
NJ pp.125-126

This essay on Cathay Pacific: Evaluation the Performance and Strategy was
written and submitted by your fellow student. You are free to use it for research
and reference purposes in order to write your own paper; however, you must cite
it accordingly.
Three strategic alternatives and evaluation for Cathay
Pacific Airways essay
The company should consider possible alternatives to the current marketing strategy. The
elaboration and implementation of an alternative marketing strategy is essential because the
company is likely to face considerable problems, while implementing the current strategy of the
diversification focusing on new industries, products and services, which are bound to the airline
industry. In such a situation, the company should either enhance its position in their airline industry
or diversify its operations by means of entering new industries, which are not related to the airline
industry. However, the latter strategy is too risky and costly. Hence, it is possible to suggest several
strategies that can enhance the position of Cathay Pacific Airways in the global airline industry
today.

First, the company may focus on mergers with other companies that will allow Cathay Pacific
Airways to EXPAND ITS MARKET SHARE FAST. Mergers can open new markets for the company fast
but this strategy is costly in terms of the independence of the company and its marketing policies. In
addition, the company will need to complete restructuring of the new organization because the
merger with another airline will need adaptation of the organizational structure of the new company
to traditions and needs of both companies that have merged.

Second, the company can focus on the ACQUISITION OF MINOR AIRLINES TO ENHANCE ITS
POSITIONS IN TARGET MARKETS. For instance, the company can acquire regional airlines to
enhance its long haul flights. In such a way, customers can choose Cathay Pacific Airways to travel by
air using its regional subsidiaries with the further use of long haul flights of the company. As a result,
customers will be able to travel to virtually any part of the world with minimal time waste since they
will use Cathay Pacific Airways at all levels from regional to international. The strategy of acquisitions
is extremely costly and probably not affordable for the company, if it fails to improve its financial
performance immediately. Moreover, this strategy raises the problem of the widening
communication gaps because of cultural differences between professionals working in the company
and in companies acquired by Cathay Pacific Airways.

Third, Cathay Pacific Airways may INTRODUCE A LOW COST BRANCH OR SUBSIDIARY, which can
offer basic airline services to customers but at the lower price compared to the mainstream
company. In such a way, the company will diversify its services and offer customers services, which
are affordable for them. This alternative will open larger opportunities for the company to expand
its market share since low cost airlines play an important part in the airline market, especially at the
regional level. In fact, this strategy may be also imperfect but still it allows the company to start
saving costs and gaining a new segment of the market, which is very prospective, in light of the
growing popularity of low cost airlines in the world.

Criteria for evaluating strategic alternatives for Cathay

Pacific Airways essay
The major criteria for evaluating strategic alternatives include COSTS, EFFECTS ON THE MARKET
SHARE OF THE COMPANY, IMPACT ON THE BRAND IMAGE OR COMPANY-CUSTOMER
RELATIONS, AND HUMAN RESOURCE MANAGEMENT (Brown, 2003). In fact, costs of the proposed
marketing strategy should be affordable for the company. They should be grounded on the financial
resources the company has at hand and can invest to implement proposed strategies. The
development of the company should occur within the framework of the proposed marketing
strategy but this strategy should be realistic in terms of its costs since benefits from the
implementation of the proposed strategy should outweigh its costs. Hence, effects of the marketing
strategy should be positive in regard to the company’s performance. At the same time, they should
also have a positive impact on the brand image of the company because the company should attract
customers and its marketing strategy should be attractive to customers. Finally, proposed
alternatives should meet needs of human resources of the company and be affordable for them.
What is meant here is the fact that the company cannot implement the marketing strategy, which is
unaffordable for its employees just because they do not have the qualification or professional skills
required for the implementation of this strategy.

Recommended alternative and execution for Cathay

Pacific Airways essay
The development of the low cost subsidiary is the most efficient alternative to the current strategy
implemented by Cathay Pacific Airways. The low cost marketing strategy will diversify operations of
the company and attract more customers. In the time of the uncertain economic development and
unstable situation in international markets, many customers are looking for affordable prices
offered by airlines and low cost companies are in an advantageous position today. At the moment,
Cathay Pacific Airways has a well-developed network of regional airline subsidiaries. Therefore, the
company can turn them into the low cost subsidiary uniting their efforts and assets to offer
customers low cost flights.

Low cost regional airlines may complement long haul flights offered by the company. Low cost
regional flights may deliver customers to the major hubs, from which they may be delivered to
virtually any part of the world. At the moment, the company offers similar services but the costs of
regional flights are relatively high that discourages some customers from purchasing services from
Cathay Pacific Airways. Instead, the introduction of the low cost branch of the company will attract
more customers and make regional flights more affordable for them.

The implementation of the low cost airlines’ strategy should start with planning. The company
should identify accurately, which airlines can become low cost ones. In this regard, the company can
use either available region airlines and a part of their fleet or acquire a new regional airline, which
already operates in the low cost market. In this regard, the former is more preferable and the
company should use a part of the available regional airlines’ fleet to offer customers low cost
services. The next step of the implementation of this strategy is the implementation of the plan
proper. Finally, the company should maintain the control and monitor the implementation of the
strategy. If the performance of the company starts deteriorating, the company should introduce
changes in the plan or change the strategy.

Internal Analysis for Cathay Pacific Airways essay

The analysis of the internal potential, operations, and strengths of the company uncovers
opportunities, which Cathay Pacific Airways will have in the future, as well as threats, which the
company may confront in the course of its business development (Schmitt, 2001). In this regard, it is
possible to use the SWOT analysis, which helps to conduct the internal analysis and gives insights
into the competitive position and potential of the company. In fact, internal strengths and
weaknesses of the company, which may be revealed in the course of the SWOT analysis, will help to
identify opportunities the company has as well as threats, which the company may confront in the
future.

Another strength of the company is the fleet, which allows the company to MAINTAIN ITS
MARKETING PERFORMANCE AND TO PROVIDE CUSTOMERS WITH CARGO AND PASSENGER
FLIGHTS ON THE REGULAR BASIS. The company has a large fleet of modern aircrafts, including
aircrafts from Airbus and Boeing, which are leading manufacturers of aircrafts in the world. The
modern fleet contributes to the high reliability and safety of flights provided by the company since
cases of repair required by aircrafts are quite rare, while costs of maintenance of relatively new
aircrafts are lower compared to older aircrafts.

In addition, the company has EXPERIENCED AND WELL-QUALIFIED HUMAN RESOURCES, which
also comprise an important marketing value of the company. At this point, it is worth mentioning
the fact that human resources play an extremely important part in the competitive struggle today
because human resources have the potential to boost the development of their organization. For
instance, human resources can introduce innovations that can improve the performance of the
company and boost its business development. In fact, human resources may accelerate the
business development of the company because they can improve their performance, even without
financial investments being made by the company. Unlike technological innovations or other
changes, which require substantial investments, the improvement of the employees’ performance
can occur through the use of non-material motivation. For instance, a positive feedback from the
part of managers of the company can encourage employees to work better. As employees improve
their performance, the organizational performance improves too.

In actuality, Cathay Pacific Airways has a number of strengths, which allow the company to
ENHANCE ITS COMPETITIVE POSITION AND TO IMPROVE ITS MARKETING PERFORMANCE. In this
regard, it is worth mentioning the brand of the company as one of the major marketing assets of the
company. The reputable and renowned brand facilitates the penetration of new markets and
enhances the position of the company in existing markets. In such a way, the company can improve
its marketing position exploiting the full potential of its brand. For instance, often customers choose
the company, which services they like to use, on the ground of its brand and reputation. In this
regard, Cathay Pacific Airways is one of the strongest companies in the market.

On the other hand, Cathay Pacific Airways has certain weaknesses, which affect its marketing
performance. First, the company is based in Hong Kong and, in spite of historically strong western
impact on their organizational culture, the company still remains oriental company with respective
cultural norms and traditions, which apparently affect its organizational structure and relations
within the organization. In fact, the cultural background of the company could not be viewed as a
weakness, unless the process of globalization and the international market expansion, which raises
the problem of the cultural diversity, which the company has to deal with. In fact, Cathay Pacific
Airways has to operate in the multicultural environment, as the company enters new markets.
Therefore, the company has to ADAPT ITS MANAGING STYLE TO NEW CULTURAL NORMS AND
TRADITIONS OF LOCAL EMPLOYEES. In such a situation, the risk of misunderstanding and conflicts
between representatives of different cultures increases. Hence, the company has to elaborate an
effective approach to the successful and effective management in the multicultural environment.

Furthermore, the large fleet of the company needs renewal and expansion. As the company
expands its operations, it has to purchase new aircrafts, while the purchase of new aircrafts requires
substantial funds and is costly for the company. In such a situation, the company can face the
problem of the shortage of financial resources to fund its renewal policies and strategies. At the
same time, if the company fails to purchase new aircrafts and to replace old aircrafts by new ones,
Cathay Pacific Airways can face the problem of the steady deterioration of the quality of its services
and the shortage of aircrafts that can provide services for customers. The lack of aircrafts will lead to
delays of flights and late delivery of cargo and passengers. Hence, the risk of the growing customer
dissatisfaction increases.

In spite of current weaknesses Cathay Pacific Airways is currently facing, the company has large
opportunities to develop its business successfully. The company attempts to ENHANCE ITS
MARKETING POSITION THROUGH THE ELIMINATION OF ITS WEAKNESSES. At the same time, the
IMPLEMENTATION OF THE EFFICIENT MARKETING STRATEGY can help the company to realize its
full potential and to use available opportunities.

At this point, it is worth mentioning the fact that the company has an opportunity to take the leading
position in the global market. At any rate, Cathay Pacific Airways holds one of the leading positions
in the Asia Pacific region and, at the moment, expands its business and operations successfully. In
fact, the company is one of the largest carriers of cargo and passengers in Asia, while the further
business expansion enhances its position in other markets as well. The Asia Pacific region is the
major market for Cathay Pacific Airways but the company operates internationally and offers flights
worldwide. In such a situation, the company need to increase its presence in European and
American markets to challenge the position of other leaders in the airline industry (Calder, 2002).
Nevertheless, even the current share of the global market owned by Cathay Pacific Airways is large
and allows the company to maintain one of the leading positions in the global market. In addition, it
is necessary to take into consideration the potential of Chinese and Asian market, where Cathay
holds the leading position so far. China is one of the most dynamic global markets, which keeps
growing in spite of the global financial crisis. Other countries of South East Asia, such as India also
have the huge potential (Howard, 2004). Therefore, if Cathay Pacific Airways maintains the leading
positions in those markets, the company can enhance its leading position in the global market, due
to the growth of its traditional markets.

Therefore, the enhancement of the position of Cathay Pacific Airways in China, as one of the most
dynamic markets, is another important opportunity for the company to realize. In fact, this is the
strategic opportunity for the company because loosing the lead in Chinese market can undermine
the position of Cathay Pacific Airways in the global market since Chinese market is the major target
for the company, which owns a share of China Airways, the major airlines of China. Chinese market
keeps growing, in spite of the global financial crisis of 2008 and deep economic recession in other
countries. Hence, Cathay Pacific Airways can compensate possible losses in other markets due to
the growth of Chinese market. In such a situation, the company should keep INCREASING ITS
MARKET SHARE in China raising barriers to entry for potential rivals. In this regard, the support of
the government is very important for the government and Cathay Pacific Airways has such a support
so far.

Moreover, the INCREASE OF THE CUSTOMER LOYALTY AND SATISFACTION THROUGH THE
IMPROVEMENT AND DIVERSIFICATION OF ITS SERVICES is another opportunity Cathay Pacific
Airways can implement successfully (Pine & Gilmore, 1999). In fact, the company can develop the
customer loyalty and satisfaction using the full potential of its human resources and implementing
new technologies. In addition, the company may offer new pricing policies as well as new flights,
which may meet needs of customers and be more attractive compared to offers of rivals of Cathay
Pacific Airways. On the other hand, the company should come prepared to INVEST SUBSTANTIAL
FUNDS in the introduction of innovations and other changes to attract customers and develop their
loyalty and satisfaction. However, the company can use its human resources to increase the
customer loyalty and satisfaction at low costs since human resources may just need additional
training to start working better and offering services of the higher quality.

At the same time, along with great opportunities, Cathay Pacific Airways still face a number of
threats, which may affect the performance of the company and its competitive position. One of the
major challenges to the future marketing success of Cathay Pacific Airways is the tight competition,
which forces the company to keep progressing on and on but, at the same time, it requires
substantial investments and financial resources to maintain the growth of the company. In fact,
today, Cathay Pacific Airways confronts the competition from renowned leaders of the global airline
industry, such as British Airways, Lufthansa, American Airlines and others. Confronting such
behemoths is extremely challenging for Cathay Pacific Airways because its major rivals have a very
strong position in European and American markets, which are traditionally among the largest global
markets with the high level of capitalization. In such a situation, Cathay Pacific Airways should not
only use its full potential in China and the Asia Pacific region but also enhance its position in Europe
and America consistently. Otherwise, the further competition will be quite difficult. In this regard,
the growth of Chinese and Asian markets may be quite helpful because they provide the company
with essential financial resources, which Cathay Pacific Airways can invest into the development of
its business in Europe and America.

Furthermore, environmental concerns of customers are another threat that can affect the business
development of Cathay Pacific Airways in the future. Today, customers, especially in Europe and
America grow more and more concerned with the environment pollution caused by airlines. This is
why European and American policy makers introduce stricter requirements to aircrafts in terms of
greenhouse gas emissions. As a result, airlines have to modernize their aircrafts or to purchase new
aircrafts to match these environmental requirements. Today, Cathay Pacific Airways has a fleet of
relatively new vehicles and does not confront problems concerning the environmental legislation.
However, in the future, stricter environmental requirements can raise problems in face of the
company and force the company to modernize its fleet to enter European and American markets
(Volti, 2005). In fact, the successful business development of the company may be under a threat, if
environmental requirements will grow stricter because the costs of the company will increase, while
there are no guarantees that customers will stay loyal to the company, especially, if the company is
forced to raise the price of its services because of the increased costs.

Another threat to Cathay Pacific Airways is the uncertainty in the global market and the threat of the
ongoing deterioration of the economic situation in major markets. At the moment, the global
economy has started to recover but the further development of the world economy is still uncertain
because early signs of the recovery may be replaced by a new downturn and further steep decline.
New global financial crises can affect negatively the business development of Cathay Pacific Airways
because of the decline of business activities and, therefore, the drop of cargo transportation by the
company’s aircrafts. The global financial crisis of 2008 has had a negative impact on the marketing
development of Cathay Pacific Airways because the company has faced the problem of the decline
of the cargo transportation and the decline of the flow of passengers (Peters, 2007). As a result,
revenues of the company have dropped and the company had to look for options to compensate its
losses through diversification of its operations.

External Analysis for Cathay Pacific Airways essay

At the moment, the political environment is favorable for the business development of Cathay
Pacific Airways. As the company operates internationally, it can enter new markets and develop its
business abroad, while many governments are tolerant in relation to foreign direct investors
because they need investments badly to overcome negative effects of the economic crisis of 2008.

On the other hand, the company is based in Hong Kong and owns a share of China Airlines as well
as China Airlines reciprocally owns a share of Cathay Pacific Airways. At this point, it is worth
mentioning the fact that China is undemocratic country with the Communist rule. Even though the
government attempts to introduce some principles of the open market economy, there is still the
problem of the corruption and the overwhelming impact of the state on the domestic economy and
business. In such a situation, Cathay Pacific Airways can never be certain in its future in China,
although China is one of the fastest growing markets in the world and Cathay Pacific Airways have
great prospects in this market. Therefore, the undemocratic regime in China may have a
controversial impact on Cathay Pacific Airways because, on the one hand, the company can benefit,
if the government and local authorities support it, while, on the other hand, the company may not
be absolutely certain in the ongoing tolerance and loyalty of the government because of the
persisting corruption and tightening competition.

The current economic environment, where Cathay Pacific Airways has to operate is far from perfect,
because the company has to operate in the highly competitive business environment, while the
global economy is still recovering from the global financial crisis of 2008. The negative impact of the
global financial crisis of 2008 can hardly be underestimated, taking into consideration that the airline
industry has suffered from a steep decline since the financial crisis has struck. In fact, the global
financial crisis caused the crisis in the airline industry because customers had grown concerned with
their saving and flights had become unaffordable for them. At the same time, the cargo flow
worldwide had dropped too. As a result, today, the company has to struggle for regaining its
position in the market and attracting customers to increase the cargo and passenger turnover. The
company was traditionally concerned with both segments of the transportation market and, at the
moment, the company attempts to regain its position and to increase its market share.

The social environment, where Cathay Pacific Airways operate, is also quite controversial (Boonstra
& Gravenhorst, 1998). On the one hand, the company has a positive brand image and solid
reputation. On the other hand, environment concerns of the public and security concerns affect
consistently the passenger flow and, therefore, the overall performance of the company. In fact, the
company has a positive brand image and reputation among customers. As a result, the company
can rely on the customer loyalty. However, the growing environment concerns of the public put
under the question, whether the company can count on the customer loyalty in the future or
probably the environmental criticism may deter some of its loyal customers form the company. On
the other hand, at the moment airlines offer the fastest way of transportation passengers and
cargos that means that customers, who need to travel fast or for a long distance, will hardly refuse
from services of such companies as Cathay Pacific Airways. As for the safety and security concerns,
the problem of international terrorism is not as burning in China and East Asia as it is in the US or
the Middle East, for instance. This is why the company is relatively secure compared to its overseas
rivals and less vulnerable to the risk of terror attacks and other security-related issues.

The technological environment is basically favorable for the successful business development of
Cathay Pacific Airways. In actuality, the progress of technologies allows the company to introduce
new technologies that help the company to save costs and to increase the customer satisfaction
through offering them new services or services of the higher quality. In such a way, the company can
benefit from new technologies. On the other hand, the development of new technologies raises the
problem of the security of flights. For instance the use of mobile phones and other mobile devices
may be potentially dangerous and affect the security of flights increasing the risk of aircraft crashes.
In this regard, Cathay Pacific Airways, attempt to introduce new technologies that can protect
aircrafts’ equipment from the potentially dangerous impact of mobile devices used by passengers of
aircrafts. Anyway, the development of the contemporary technological environment can enhance
the competitive position of Cathay Pacific Airways, if the company manages to introduce
technological innovations faster than its rivals do. Therefore, new technologies have a considerable
potential, which, being realized properly, can bring Cathay Pacific Airways a stronger competitive
position in the market.

Report Analysis Project for Cathay Pacific Airways essay

Cathay Pacific Airways is one of the largest carriers in the world. At the moment, the company
operates internationally and diversifies its business entering new industries related to the airline
industry. However, the tight competition and the persisting dependence of the company on the
situation in the airline industry forces Cathay Airline to enhance its business development. In this
regard, the company should consider alternative marketing strategies, such as the expansion of its
operations and entering the low cost segment of the market that can attract new customers and
enhance the competitive position of the company consistently as well as to increase its market
share.

Based in Hong Kong, the company operates internationally and has reached a tremendous success
due to the aggressive market expansion policy. At the same time, it is worth mentioning the fact that
the company started as the English airline, which later underwent the complex procedure of
identification as an independent Asian company that has its authentic brand and public image.
Today, the company is a reputable airline providing its cargo and passenger transportation service
worldwide.

However, Cathay Pacific Airways still faces the problem of the tight competition which forces the
company to keep progressing and enhancing its position in the market. In this regard, the marketing
strategy of the company plays an important part because it affects the competitive position of the
company in the market and determines its further business development because all decisions
taken by the company aim at the fulfillment of its strategic goals. In actuality, the company tends to
the diversification and entering diverse industries related to their airline industry. In such a way, the
company becomes more flexible and less vulnerable to the negative impact of fluctuations and
crises in the aviation industry. However, such a strategy still needs improvements because Cathay
Pacific Airways operates in the airline or related industries and therefore is still highly dependent on
the situation in the airline market. Therefore, the marketing strategy of the company should focus
on the enhancement of the position of Cathay in the airline industry.