Organizational And Corporate Strategy Audit Of Cathay Pacific

Introduction to Cathay Pacific

The following report is going to audit the organizational and corporate strategy of Cathay Pacific. There are different segments of the audit. These are the analysis of vision and mission statement of the company, situation analysis of Cathay Pacific and external and internal analysis of the organization. With the help of TOWS and different situational analytical tools, the audit has been authenticated. The situation analysis comprises of both the organizational and product quality and the provision of service that is considered within the market. Being a flagship wing of the organization in Hong Kong, the company delves into the process of continuous service development plan. This is how in most of the cases, the corporate governance, organizational structure and external and internal characteristic traits of the company has been audited with profound study.

Cathay Pacific has been the flag carrier of Hong Kong for nearly seventy long years. The operations of the airlines along with its subsidiaries have been transporting cargo and passengers to around 180 destinations in 44 countries across the globe inclusive of the joint ventures and codeshares. The airline was incorporated on 24^th September, 1946 by American Roy C. Farrell along with Australian Sydney H. de Kantzow, with each of them investing HK$1 for registration of the airline. The airline was able to make the world’s first non-stop transpolar flight flying over the region of North Pole in the month of July, 1998 that was stated to be the maiden flight arriving at the then International airport of Hong Kong.

In the year 2010, Cathay Pacific became the world’s largest airline of international cargo, added with the main hub Hong Kong International Airport as the busiest cargo traffic airport of the world. Cathay Pacific has been an award winning and globally apparent airline, being rewarded with the “World’s Best Airline” award for four times along with constantly being ranked as one of the best airlines existing in the world. On the month of September 28, 2006, the airline endured shareholding repositioning under which Dragonair became a wholly owned subordinate though it continued to operate under its own brand name. Cathay Pacific’s acquisition of Dragonair meant gaining more admittance to the constrained, yet fast growing market of Mainland China along with having more opportunities of the sharing of resources.

Cathay Pacific has always been recognized as a company that has set the standard of the industry through the service it provides, playing a major role in strengthening the links of Hong Kong to other global hubs through the regular services to Los Angeles, New York, London and Sydney along with augmented frequencies to other destinations.

History of Cathay Pacific

Cathay pacific has been playing a commanding role in strengthening the position of Hong Kong as the global hub of aviation and the main gateway to the Chinese Mainland, leveraging its vast network in enhancing the flow of traffic in business, cargo and tourists. Cathay pacific is more dedicated towards the technological brilliance for its services and products. Under the present circumstances, Cathay pacific has been trimming down costs in certain ways; like last year they announced that they would clean-up their aircraft on less frequent basis. The airline is also looking towards shifting some of its regional itineraries to Cathay Dragon, like it has been doing with its flights of Kuala Lumpur.

The main motive of Cathay Pacific is to frame a faster as well as leaner structure of the organization with cutting down of some of the jobs that are not required anymore within the organization. Certain new jobs would be created with some others need to be redefined. Moreover it is planning on shortening its program of fuel-hedging along with revamping its workforce as an integral part of the new strategy of business to arrest the earnings slide.

Cathay Pacific does possess number of strengths that has been facilitating the company in enhancing its competitive situation and developing the performance of its market. The company does boast of larger fleet of contemporary aircrafts across the globe. The modern fleet has been contributing to the high dependability along with the protection of the flights that is being offered by the company as the cases of repair needed by the aircrafts are a rare affair. Moreover, the company requires renewal along with expansion. As the company look towards the purchasing of new fleets it should be requiring extensive amount of funds which would be costly for the company. However, if the company fails in purchasing new aircrafts it would reduce their quality of service along with late delivery of the cargo and the passengers. Despite all these, under the current circumstances, Cathay Pacific has bigger opportunities in developing of its business in successful manner.

A vision or mission statement is stated to be the tools of motivation that has the ability to encourage the employers along with the employees in attaining their goals. It has the ability in facilitating their customers to understand the seriousness and reliability of their organization in terms of attaining their mission. These statements are generally been used as the depiction of their company illustrated in words, it displays the ways the company operates and things they prioritize as a business organization. The role of their well portrayed vision and mission statements are cautiously written word for word as they strive hard in being the best, leaving their customers with good impression and being an airlines that one feels contented with. They excel in being the best. This is evident from the fact that they have been awarded the best airlines four times. They believe in team effort and that is how things in an organization should be. “we” brings in everyone to the same table signifying the fact that everybody plays an important role in the operations of Cathay Pacific. Their support for Hong Kong has been immense and they have always mentioned their commitment towards Hong Kong and its people. Cathay Pacific’s mission and vision statements states directly the things they do and the things they believe in.

Situation at Cathay Pacific

In their mission statement, it clearly depicts the fact that whatever they do, they perform it as a group through proper emphasis on the word “we” and constantly repeating the same. Their main motive is to work as a family, prioritize in working mutually in attaining a universal goal. Adding to that is the fact that they did not cite “We wish, We will, or We strive to”, instead they only went for “we”, meaning that is what they are and have been. The main role of this mission statement is simply leaving its customers with a stronger impression, suggesting to them a straight message of the ways Cathay Pacific have been and would operations

	Factors	Weight	Rating	WGTD Score	Comments
	Strengths
SI	Fleet Size	0.12	2.5	0.3	Cathay airways owns 147 aircrafts in its fleet. The fleet which offers reliable schedules ensures that customer demands are meet. This indicates that Cathay provides a wide range of customer services including passenger travelling and cargo movement. Customers are also provided with many schedules across the day hence elevating convenience level of the company to its customers. The fleet is used as an economic tool in that while other airlines employ many aircrafts for a single schedule, Cathay employs only one jet to accomplish the task.
S2	Number Of Destinations	0.08	3.5	0.28	Cathay carries over a million passengers every month. The company has over 570 destinations worldwide. This facts give Cathay a competitive advantage across the world. High number of destinations creates a wider market reach which is a major issue in increasing the sales income value of the company.
S3	Highly Qualified Human Resource	0.2	4.0	0.8	Success of any company largely depends on its human power ability (Noe et al, 2013). Cathay airways has attracted employees from across the globe therefore drawing diverse talent and cultures. The blend of culture and talent ensures that customers get best services, considering the fact that Cathay has wide destinations worldwide With reliable staff, Cathay airways customers get the best services. The team is highly dynamic hence can accommodate the diverse cultures across the world.
S4	Brand	0.28	5.0	1.4	Being the flag carrier of Hong Kong, the company brand is Cathay airways has been in operation since 24 September 1946 when it was founded by American Roy C Farrell and Australian Sydney H. de Kantzow. The company is one of the founders of one world alliance which is a reputable affiliation of major airlines across the world. The alliance gives the member airlines competitive advantage through the effective, efficient and reliable travel schedules across the world.
S5	Affiliation	0.12	3.5	0.42	The company is affiliated to the “one world alliance” which gives it competitive advantage. The global alliance body gives Cathayairways a chance to choose more flights on a given day (Doz and Hamel, 2015). The company has entered into a contract with Lufthansa which is a major airline company. The Lufthansa partnership will provide its customers with direct route to Europe and Australia. Cathay airways has invested in other related businesses such as ground moving and restaurants which boost its annual income by significant percentage.
	Weakness
W1	High Outsourcing Level	0.02	3.5	0.07	A significant percentage of operations are being outsourced by the company. Approximately 65% of strategic and non-strategic operations are outsourced. This increases the risk of failure by the company if the external companies were to withdraw their services with immediate effect. Outsourcing also limits the company’s control towards its activities. Companies which rely too much on outsourcing do not nature their own talent hence hindering innovation and professional growth of its employees.
W2	Under Value Ticket Selling	0.09	3.0	0.27	Cathay airlines experiences high ticket booking level. The company is ranked third worldwide after Air France-KLM and Delta air in terms of loading on percentage of seats. This however does not translate directly to its financial statements of revenue and expenses since the company despite having high booking realizes losses as compared to its competitors with lower booking rate. This problem is attributed to the fact that Cathay airways have been selling their tickets at a lower value to feel up the empty seats.
W3	Financial Liquidity Ratio	0.03	2.5	0.075	Liquidity ratio of a company determines its ability to meet its short term financial obligation when they fall due. Compared to other airline competitors in the market, Cathay airlines recorded a lower current ratio. This may be a problem to the airlines when it’s conducting its future prospects. However the company may use its future major prospects to offset its current obligation without deviating from its planned budget.
W4	High Cost of Fleet Maintenace	0.01	4.0	0.04	With a fleet of over 147 aircrafts, the company cost on fuel and engineering services has risen over the years. High maintenance cost as evidenced by the financial statements is a major setback to the company’s profit realization. The company has tried to manage this by acquiring fuel efficient aircraft such as Airbus A350-900 and retired several old and inefficient Boeing 747-400 and three airbus A340-300.
W5	Fuel Volatility	0.05	4.0	0.2	Fuel prices are not always predictable hence to avoid uncertainty (Berghofer and Lucey, 2014), Cathay airways has been embarking on entering into future contracts through edging of fuel prices. The contracts however have worked to the disadvantage of the company since a huge amount of funds have been lost through edging of fuel prices. The management engages in wrong decisions.in 2016, Cathay lost HK$8.46bn on fuel edging. Again in 2015, the company reported a staggering HK%8.47bn courtesy of poor edging decision. The company is still implementing its edging program in 2017 despite the losses.
	Total Scores	1		3.855

Company’s Vision and Mission

Cathay Pacific is in operation in Hong Kong for over 71 years. Transforming to one of the globes biggest international cargo airline and world wides busiest airport in terms of freight traffic. Cathay Pacific was and still is one of the seven airlines to be graded as a 5-star airline by Skytrax. With currently a fleet of 144 aircraft and a growing fleet they see the bright future coming.

Cathay Pacific has two mission features. One importance is given to customer satisfaction for passenger and cargo service by delighting passengers and clients with their needs and serving from the heart. They want to provide safe flights and outstanding products. Environmental issues are taken seriously by the airline.

Our vision is to be the world’s best airline. Being the best means that we always strive to excel in everything we do. Our dynamic team provides the highest quality service so that our customers are happy they chose Cathay Pacific. (Cathay Pacific, 2015)

sites.cdnis.edu.hk

In terms of vision and mission statement, they are motivating instruments that persuade and encourage the workers and leaders to reach out for the set goals. Vision and mission also allows clients to understand how significant and important it is, that the company is reliable and stands in for strong and delightful service in all the fields. Those statements are utilized to represent the firms written words and it reveals how a company works and how they rank their significance and valueas a well-driven organization.

Main role of the chosen airlineare well described vision and mission statements. They are thoroughly and meticulously written word by word as the firm aims high to the tops, to leave passengers and clients a good experience, by making each flight memorable, interesting and safe in all aspect. Making it the best experience for any customer. In the mission statement, it reveals that whatever they do, they do it as a team and my making it a vital motto to think as a team, as a big family which holds together and pushes to strive ahead. Additionally, the reality that Cathay Pacific did not mention we will or we strive to, alternatively they only noted we, defining that they are, and they have. Main role of this mission statement is to give clients and customers a powerful and compelling impression, sending them a message of how Cathay Pacific work and what they believe in. Cathay Pacific lives as what they noted down, they really take things serious, try always to be ahead of the rest and they will stay at the top ten. Most importantly they work together as a family, cohesive and putting safety first.

Mission and Vision Statement Analysis

According to the company’s web profile, certain code has been set in order ensure the involvement of the employees in the organization. There is a board that holds the responsibility of the entire operational tasks of the organization. According to the code, the board is responsible and accountable for the stakeholders to lead a group. As a matter of fact, this has been taken into certain consideration pertaining to the effective understanding of the case with the effective management policies. The directors are both individually and collectively accountable to set the manner of the shareholders. The organizational strategies are determined by the board in various levels. The strategies are figured in both collective and individual manner. The nature and extent of organisational risk is evaluated and determined by the board. As a matter of fact, this has to be taken into certain consideration pertaining to the effective nature of it that has to be taken into certain consideration pertaining to the effective consideration of the process. The corporate governance of the company is controlled by the directors. However, the directors and the members of the board are equally directed to follow and adhere to the guidelines attributed and scripted in the manual called- “Brief Guide for Directors”.

It can thus be stated that in most of the cases there is a clear chance to cope up with the basic understanding of the process that was highly effective in the understanding of the issues that was based on the given segments. There is no scope for the Directors in the company to be autocratic. Since the Directors are to follow and adhere to the rules and the code of conduct set by the organizations core committee the determinants of the entire case in terms of creating an effect in the entire organizational structure. The directors are guided to the conduct, business activity and development of the organization. According to rule 3.08, the Listing of Rules, the directors must abide by certain regulations and they ought to fulfil fiduciary duties and responsibilities of skill, care and diligence. This is ascribed in order to find out the basic changes in the form of service provision. It has been observed through the study of the rule book of the directors that in most of the cases they are highly respectful towards the rules that are ascribed within the organization. As a matter of fact, this has been taken into certain consideration pertaining to the effective consideration of the case that this has been taken into certain consideration pertaining to the effective understanding of the actual case for the basic structure of the issues. The main motive of Cathay Pacific is to frame a faster as well as leaner structure of the organization with cutting down of some of the jobs that are not required anymore within the organization. Certain new jobs would be created with some others need to be redefined. Moreover it is planning on shortening its program of fuel-hedging along with revamping its workforce as an integral part of the new strategy of business to arrest the earnings slide. Cathay Pacific does possess number of strengths that has been facilitating the company in enhancing its competitive situation and developing the performance of its market. The company does boast of larger fleet of contemporary aircrafts across the globe. The modern fleet has been contributing to the high dependability along with the protection of the flights that is being offered by the company as the cases of repair needed by the aircrafts are a rare affair. Moreover, the company requires renewal along with expansion. As the company look towards the purchasing of new fleets it should be requiring extensive amount of funds which would be costly for the company. However, if the company fails in purchasing new aircrafts it would reduce their quality of service along with late delivery of the cargo and the passengers. Despite all these, under the current circumstances, Cathay Pacific has bigger opportunities in developing of its business in successful manner

SWOT Analysis

The corporate governance of the organization leads to the employees’ engagement and the settlement of organizational behaviour. In this regard, this can be stated within the factor analysis through the basic understanding of the process for the case that has been taken into certain understanding. Following duties have been assigned to the directors:

1. Honest and responsible act to maintain good faith within the organization

2. Act for the proper purpose of the organization

3. Answerability to the company for the implementation and cancellation of policy

4. The chairman ought to ensure that the engagement of the directors would become positive in the decision making process.

5. The chairman and the directors need to ensure that the steps taken for the provision of the communication among the stakeholders and between the stakeholders and the organizational core management body would result in effective productivity.

6. Showing encouragement to the directors so as to find out how effective this would be for the basic understanding of the process.

7. Ensuring the job of the directors that their contribution would be regarded to excel the best practice of the company

8. Promotion of culture and transparency within the company and among the employees so as to validate and ensure constructive relation between the executive and non executive directors.

	Factors	Weight	Rating	WGTD Score	Comments
	Opportunities
01	Expansion into new markets	0.15	4	0.60	In the past two years, the company has been expanding its operations to new destinations. For instance, In 2016, the company introduced flights to Barcelona, which is a great tourist destination thus complementing the company’s operations in Madrid. Spain has become Cathay’s second largest operator (Malsen, 2017). The other destination that the company has recently expanded into includes Christchurch. Furthermore, there are many other emerging markets that the company can take its operations to. Therefore, Cathay Pacific has the opportunity to expand its business into new markets.
02	Technological advancement	0.08	3	0.24	Cathay Pacific has increasingly invested in advanced technology. For instance, the company introduced self-service bag drop as well as kiosk bag tagging. In addition, it introduced a new cargo booking system. By investing in technology, Cathay Pacific has the capacity to improve its communication with partners, customers as well as staff. Moreover, the use of technology enables online check-in, flight-schedule as well as ticketing. In other words, the company’s use of advanced technology enhances its efficiency. There are other areas that Cathay Pacific has not utilized technology optimally to enable it to provide its customers with reliable as well as flexible services. In doing so, Cathay Pacific is more likely to retain and attract more customers.
03	Expansion in air freight	0.12	3	0.36	Cargo traffic has been growing and Cathay Pacific has been expanding its freighter services. The company has recently expanded its freighter services to Spain and India. As a result, the company has seen an increase in cargo volumes. As international trade increases, the company has more opportunities to expand its freight services to destinations such as Dubai. However, Cathay Pacific ought to continuously study the market for cargo demand. In doing so, the company should be in a position to identity potential markets it can tap into.
04	Leverage of loyal customers	0.05	3	0.15	Cathay Pacific is regarded as one of the leading airlines in Hog Kong. This presents the company with an opportunity to get more customers, thereby generating more revenues. This argument is based on the presumption that people tend to place more confidence on recognized airlines. Cathay Pacific has established itself as a premium carrier. In addition, the company has tried to differentiate itself from the rest of the airlines. That is, in as much as the company is a global brand, it has managed to adapt to local market conditions. Therefore, even as new players enter into the market, Cathay Pacific can still leverage on customer loyalty.
05	Growth of global tourism	0.1	3	0.30	More and more countries in different parts of the world are growing their tourism industry. As a result, tourist destinations are ever-increasing and, thereby, travel destinations. This presents an opportunity that the Cathay Pacific Airways can capitalize on and expand its operations and, consequently, increase revenues as well. That is, it is anticipated that as the world economy improves, international tourism will also grow. Hence, there will be more air travelers and the company can take advantage of the opportunity.
	Threats
T1	Competition	0.15	3	0.45	Cathay Pacific is facing stiff competition from other airlines including Singapore Airlines, HK Express, Hong Kong airlines as well as airlines owned by the Chinese government. These competitors have been expanding their fleets aggressively.Moreover, state-owned air lines are well funded and have higher capacities. Another issue is that there is increased number of low –cost airlines or budget airlines within the region. Therefore, with a weakening global economy, more and more people are opting to travel using the budget airlines. To counter the competition, Cathay Pacific airline could benefit from introducing low cost options.
T2	Oil prices volatility	0.15	2	0.30	Fuel is one of Cathay’s largest operating costs. However, there are various factors that influence the prices of jet fuel that are beyond the company’s control. They include supply and demand as well as geopolitical factors. Unlike the majority of its competitors, Cathay Pacific practices fuel hedging and, therefore, this restricts them from lowering prices of their tickets amidst oil price volatility. Cathay Pacific invested in a four-year fuel hedge in 2015 which, resulted into a loss of about $ 1.09 billion in the following year (Sile, 2017 March 17). According to Sun (2017 April 13), the fuel hedge was a terrible gamble as the company was caught unawares by the collapse in fuel prices. There is nothing the company could do because the contract tied the company to higher fuel prices for a period of four years. Based on this experience, the company intends to invest in short-term rather than long-term fuel hedging.
T3	Regulatory challenges	0.05	3	0.15	The airline industry-both domestic and international-is largely affected by the changes in the regulatory environment. Airlines are subject to a wide variety of regulations. What makes it more complicated is that several agencies, organizations as well as associations –domestic and international- oversee or regulate issues affecting the industry such as security, economics, and safety and so on. These regulations impact on the airline’s management strategies, structure, and consequently, efficiency and productivity. For instance, recently, the Civil Aviation Department did away with “passenger fuel surcharges” (Sun, 2017 April 13). This denied the company huge amounts of revenue that would have shielded the company a little bit from losses it experienced as a result of fuel hedging.
T4	Increased cost of labor	0.05	2	0.10	Labor accounts for more than 30% of the Cathay’s operating expenses (Fareed & Goh, 2016 March 16). The company has more than three thousand members of staff at the head office. According to Fareed and Goh (2016 March 16), the Cathay Pacific suffers from overcapacity. This has negatively impacted on the company’s performance. For that reason, the company is planning to reorganize its structure so as to have a simple, agile as well as smaller structure. The company, as mentioned by Fareed and Goh, is experiencing structural issues. This is because for the past two decades, the company has not undergone any meaningful restructuring.
T5	Environmental threats	0.10	3	0.30	One of the challenges facing Cathay Pacific airways ischange in climate. Changes in climatic conditions have affected air travel negatively. For instance, very high temperatures have forced companies to reschedule flights. As changes continue to occur, more disruptions are expected to take place thus making air travel unpredictable as well as costlier. For that reason, Cathay Pacific airways has implemented measures such as using bio-fuels, modernizing fleet as well as improving fuel efficiency (Cathay Pacific, 2017).
	Total	1.0		2.95

Strategic Factor Analysis Summary (SFAS)

Cathy Pacific Airways

SWOT	Factors	Weight	Rating	Weighted Score	Comments
S1	Strong Company Product Brand	.12	5.0	.60	A strong brand ensures the company uses less resources in advertisements that woo customers easily. This also contributes to a high stock price.
S2	Large Efficient Fleet Size	.17	3.5	.595	Ensures large number of customers can be handled at an instance increasing profitability. Necessary for expansion to new markets while maintaining current markets.
S3	Highly Qualified Human Resource Personnel	.15	2.5	.375	Build on customer loyalty and increase competitive advantage of the company. Ensures the labor force is equally qualified and delivering.
W1	High Cost of Fleet Maintenance	.01	4.0	.04	This can be attributed to the high frequency of repairs and fleet checks. Reduces revenues substantially therefore reducing profit margins.
W2	Market Fuel Price Volatility	.05	2.5	.125	Makes expense forecasts unreliable and hence hard to forecast profits. Make the company a loser in the options market.
O1	Technological Advancements	.14	2	.28	Investing in a fuel efficient fleet reduces negative impacts on the environment. The use of a customer app to reduce the effects of jet lag increases customer satisfaction and experience.
O2	Expansion into new markets	.08	2	.16	As much as this will increase revenues it will also increase expenses. Given the economies of scale enjoyed by the Airlines, this will be profitable eventually. E.g. the Asia-Latin America market is a prospect that increase
O3	Leverage of loyal customers	.05	4.5	.225	Customers when treated well have the tendency of becoming loyal and even act as marketers for the company.
T1	Competition	.14	2.5	.35	Stiff competition from Singapore Airlines Limited and China Eastern Airlines Corporation Limited reduces prices and hence revenues.
T2	Increased Cost of Labor	.09	3.5	.315	Mainly attributable to rising inflation, high costs of labor reduce revenues by increasing the wages budget. This hinders investments in fleet purchases.
	Total Scores	1.00		3.065

Threats, Opportunities, Weaknesses, Strenghs Matrix (TOWS)

Cathy Pacific Airways

TOWS

Strengths (Internal)

1 Strong Company Product Brand. We have built a strong brand and image in the stock market.

2 Large Efficient Fleet Size. We provide a wide variety of airplanes and customer choices to choose from.

Weaknesses (Internal)

1 High cost of Fleet Maintenance. Frequent repairs and fleet services make it costly to maintain our fleet.

2 Market fuel price volatility. Fuel prices keep fluctuating making it hard to budget for future purchases

Opportunities (External)

1 Technological advancements. Advancements in fleet fuel efficiency and customer application make customer experience memorable.

2 Expansion into new markets. New market prospects like the Asia-Latin America route remain a possibility in the near future.

An effective and equally efficient Strengths Opportunities (SO) strategy would comprise of Strength two (S2) and Opportunities two (O2). Cathy Pacific Airways already boasts of a vast array of planes. This coupled with the emerging and lucrative prospect of plying the Asia-Latin America market could be a bankable strategy. The company will spend only a few pennies on marketing and setting up the needed infrastructure to accommodate this venture. The vast majority of the expenses that would have gone to purchasing a new set of fleet for this route would be saved for other ventures in the foreseeable future. This would lead to an increase in the customer base of Cathy Airways and hence revenues. Stock prices would also respond affirmatively to the outcome of this strategy.

The most effective Weakness Opportunities (WO) strategy would be using Opportunity ONE (O1) to alleviate the effects caused by Weakness one (W1). The runaway expenses of fleet maintenance are highly attributable to frequent repairs. Investing in technological advancements is likely to result in better performing planes requiring less checks and repairs. Cathay pacific has been playing a commanding role in strengthening the position of Hong Kong as the global hub of aviation and the main gateway to the Chinese Mainland, leveraging its vast network in enhancing the flow of traffic in business, cargo and tourists. Cathay pacific is more dedicated towards the technological brilliance for its services and products. Under the present circumstances, Cathay pacific has been trimming down costs in certain ways; like last year they announced that they would clean-up their aircraft on less frequent basis. The airline is also looking towards shifting some of its regional itineraries to Cathay Dragon, like it has been doing with its flights of Kuala Lumpur.

Mission and Vision Statement Analysis:

Threats (External)

1 Competition. Stiff competition from Singapore Airlines and China Eastern Airlines affect prices negatively.

2 Increased cost of labor. Limits the labor force and affects the ability to hire a large pool of professional staff.

An effective Strength Threat strategy would be the mix between Strength one (S1) and Threat one (T1). Competition has the effect of reducing prices. An effective countermeasure to this would be a strong product brand. Customers would be assured of value for their money and associate a good flight experience with Cathy Pacific Airways. This will effectively assert the importance of value over cost. As competitors will be reducing cost to cope with the competition, this strategy will shield Cathy Pacific Airways from such negative actions.

A better strategy would be that between Weakness one (W1) and Threat one (T1). This strategy would have the least negative effects on the company. This is because in the course of solving the high cost of fleet maintenance, the company will end up addressing some aspects of competition. Applying technology to address the high costs will translate to a more efficient and effective fleet and hence a strong brand against competition. The effects of competition are better treated by strengthening a company’s weaknesses while maintaining its strengths.

Conclusion:

From the aforementioned discussion it can be concluded that in most of the case, the company looks into the establishment of high generation and quality of customer service. Since the company has set some certain standards in the international market, this has to be maintained with ease and assurance. In this regard, this has to be taken in to certain consideration that the corporate governance of the company has been set to provide a clear understanding to the transparent business practice where there would be equal balance in the consideration of the mode of business.

References

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https://www.aviationstrategy.aero/newsletter/Dec2005/2/Cathay_Pacific%3A_Reduce_costs,_retain_revenues,_build_Hong_Kong_hub

Berghöfer, B., & Lucey, B. (2014). Fuel hedging, operational hedging and risk exposure Cathay Pacific (2017). Environmental.Retrieved 09August, 2017 from, Doz, Y. L., & Hamel, G. (2015). Alliance advantage: The art of creating value through Evidence from the global airline industry. International Review of Financial Analysis, 34, Freed, J. & Goh, B. (2016, March 16). Cathay Pacific targets deep management cost cuts in Hong Kong after loss. Retrieved 09August, 2017 from,

https://www.reuters.com/article/us-cathaypacific-cuts-idUSKBN16N1JQ

https://www.cathaypacific.com/cx/en_HK/about-us/community-relations/environmental.html

Malsen, R. (2017, January 12). Cathay Pacific to introduce first ever Hong Kong – Barcelona

management reshuffle.South China Morning Post.Retrieved 09 August, 2017 from

https://www.scmp.com/news/hongkong/economy/article/2087371/major-problems-facing-new-cathay-pacific-boss-rupert-hogg

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2013). Gaining a competitive

Oum, T. H., & Yu, C. (2012). Winning airlines: Productivity and cost competitiveness of the world’s major airlines. Springer Science & Business Media.

Park, K. (2017, January 15). Cathay Pacific to Revamp Fuel Hedges, Workforce; Shares Rise. Retrieved August 25, 2017, from https://www.bloomberg.com/news/articles/2017-01-16/cathay-pacific-rises-on-report-of-fuel-hedging-workforce-revamp

partnering. Harvard Business Press.

Retrieved 09August, 2017 from,https://www.cnbc.com/2017/03/17/turbulence-ahead-for-hong-kongs-flag-carrier-analysts.html?view=story&%24DEVICE%24=native-android-mobile

service.Retrieved 09August, 2017 from,https://www.routesonline.com/news/29/breaking-news/270850/cathay-pacific-to-introduce-first-ever-hong-kong-barcelona-service/

Sile, A.W. (2017, March 17). Turbulence ahead for Hong Kong’s flag carrier: Analysts.

Sun, N. (2017, April 13). The major problems facing new Cathay Pacific boss Rupert Hogg after

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