The strong presence around the globe enables Cathay Pacific to gain access to

The strong presence around the globe enables cathay

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The strong presence around the globe enables Cathay Pacific to gain access to key markets as well as expand its customer base.2.Geographically Diversified OperationsWhilst Cathay Pacific is an airline company based in Hong Kong, its revenue generated outside Hong Kong and Mainland China are balanced and diversified. By 2015, the revenue by origin of sale is as follow:-50.3% from Hong Kong and Mainland China-9.2% from Japan, Korea and Taiwan-4.3% from India, Middle East, Pakistan and Sri Lanka-6.3% from Southwest Pacific and South Africa-8.4% from Southeast Asia-8.3% from Europe-13.2% from North AmericaCathay Pacific also endeavors to expand its hub network in Europe and North America. It introduced passenger services to Zurich, Boston and Düsseldorf in 2015. Moreover, services to Madrid and London’s Gatwick airport will open during 2016.The diversified operations provide flexibility in the hub development and revenue portfolio by preventing over-concentration in one particular market. It is a way to mitigate threats such as intense competition in some areas and changes in regulations.3.Reputable Brand (rated as the safest airline company)Cathay Pacific has been rated as the safest airline company in the world by JACDEC for the year 2014 and 2015. Prior to 2014, it was the one of the safest 3 airlines for numerous years. There are a number offactors contributed to the safety ranking of Cathay Pacific, including but not limited to: training of pilotsand flight attendants, educating passengers, adhering to the highest standard of safety, etc.4.Strategic Alliance (Oneworld Alliance)Cathay Pacific is one of the founders of the OneWorld alliance. The alliance was formed in 1999 and today its members include 15 airline companies around the world. OneWorld alliance gives a unique edge to Cathay Pacific by the brand prestige it represents. OneWorld consists of more high-end airlines and profiles itself as a chain of premium carriers. This could give Cathay’s image an edge over its competitors and prevent the brand image from deteriorating.Moreover, the alliance is able to bring forth operational benefits. The member companies are able to coordinate their pricing and scheduling and allocate resources more efficiently. Economies of scope and learning also play a key role in the strategic alliance.VRIO AnalysisFrom the SWOT Analysis, there are three main strengths of Cathay Pacific. They are (1) extensive operations network, (2) geographically diversified operations, (3) reputable brand and (4) strategic alliance. This section will use VRIO framework to analyze how the resources and capabilities relate to competitive advantage of Cathay Pacific.(1) Extensive Operations Network: Competitive ParityThe extensive operations network is valuable because the strong presence around the globe enables Cathay Pacific to provide scheduled passenger services to 174 destinations to its customers. However, this is not rare because other large-scale airline companies also have similar scale operations network.
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