IT Strategy at CATHAY PACIFIC _and_ Jet Airways

IT Strategy at CATHAY PACIFIC _and_ Jet Airways - IT...

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IT STRATEGY A T C ATHAY P ACIFIC AND J ET A IRWAYS 1
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AIRLINE INDUSTRY STRUCTURE AND ANALYSIS The airline industry is divided into cargo and passenger services. The airline companies are regulated by government of a country. Typically an air operating certificate is required. The degree of private players depends on the individual government policies of each country. While national or regional approval for operations is dependent on the government, international operations depend on bilateral agreements between governments to share air space. To extend networks, another way for airlines to bypass airspace restrictions is to partner with connecting airlines to provide longer travel routes for customers. To analyse the airline industry, we use Porter’s Five Forces as mentioned below. a) Threat of new entrants - Medium Government Policies Huge investments Availability of pilots holding commercial license Existing heavyweights b) Supplier's bargaining power – Mildly Low Boeing and Airbus are the primary supplier of aircrafts Non-existent vertical integration High competition among suppliers c) Buyer's bargaining power - Low Switching costs are high Prices of airfare depends on many external factors like fuel prices Not much differentiation between airlines in the same category d) Threat of substitute products – High (Domestic), Low (International) For domestic destinations, substitutes could be road or rail transport. 2
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For international destinations, ait travel is the fastest and economic means of travel for long distances e) Rivalry among existing players – High Many competitors Price wars Not many factors to differentiate from competitors Industry growth rate is low CATHAY PACEFIC AIRWAYS – INTRODUCTION Registered and based out of Hong Kong, Cathay Pacific Airways provides cargo and passenger transport services to as many as 120 destinations across the world. It started out in 1946 and has business in catering, aircraft maintenance and ground handling, apart from aviation. It currently employs over 21000 personnel. It has over 100 operational aircraft in its fleet, which includes cargo plans as well. It is also a part of a global network with Oneworld partners which has connections to 150 countries and over 700 destinations. It has major shares in other airlines as well like Dragonair STRATEGIC POSITIONING The strategic positioning of RCCL is a combination of verity based, need based and access based positioning. This can be seen in the following analysis. Variety based positioning : Cathay pacific Airlines focuses on providing premium airline services. It has not moved into the premium economy class as well. It also provides cargo services. It has been upgrading its fleet with the latest aircrafts like the Boing’s Superjumbo, the Airbus A380. This has helped it in increasing the passenger carrying capacity for it long distance flights. Need based positioning:
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This note was uploaded on 01/16/2011 for the course MBA 51 taught by Professor Mba during the Spring '10 term at Symbiosis International University.

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IT Strategy at CATHAY PACIFIC _and_ Jet Airways - IT...

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