Value Chain Analysis: Cathay Pacific Airways
The value chain analysis describes the activities the organization performs and links them
to the organization’s competitive position. Value chain analysis describes the activities within
and around an organization, and relates them on analysis of the competitive strength of the
organization. Therefore, it evaluates which value each particular activity adds to the
organization’s products or services (Recklies 2001). Value chain analysis can be used to describe
the activities within and around the organization, and relate them to the competitive strength of
the firm (its ability to provide value for money products and services). Thus, the approach rests
upon the need to identify separate organizational activities and assess their value added. The
importance of organized activities and systems becomes clear. The various resources (people,
machinery, information, etc.) must be deployed into activities, routines and systems that produce
the necessary value. The ability to perform particular activities and manage the linkages between
activities is the key source of competitive advantage (Lowson 2002). Activities that add value are
divided into two categories. These are primary and support.
Primary Activities
Primary activities are primarily concerned with the creation or delivery of a product or
service. They can be grouped into five main areas:
Inbound logistics (receiving, storing and distributing the inputs to an organization)
Operations (transforming inputs into outputs)
Outbound logistics (storing and distribution and delivery of product and service combinations)
Marketing and sales (means by which consumers are made aware of an can purchase products
and services)
Service (activities that enhance the value of a product or service)
Support Activities
Each primary activity is linked to support activities, which help to improve their
effectiveness or efficiency.
Procurement (the process of acquiring the resource inputs to all the primary activities across the
whole organization)
Technology development (all activities have a technology – including know-how and knowledge,
whether concerned directly with products and services or processes)
Human resource management (those activities involved in recruitment, managing, training,
developing and rewarding people)
Infrastructure (systems of planning, finance, quality control, information management and
others)
Cathay Pacific’s Value Chain
Cathay Pacific Airways is a Hong-Kong based airline that has a comprehensive network
of flights to over 90 destinations around the world. It is considered as one of Asia’s biggest and
most regarded airlines. The company was founded in 1946 in Hong Kong. The company since
then has continued to develop Hong Kong’s airline industry and supported Hong Kong’s position
as a major transportation center in the region. The airline company was founded by (American)
and (Australian). Cathay Pacific was founded in Hong Kong on the 24th of September, 1946.
