Research Topics: Cathay Pacific Case Studies

Strategic Knowledge Case Study Paper on Cathay Pacific

The Airline An airline provides air transport services for passengers or freight, generally with a recognized operating certificate or license. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit. Airlines vary from those with a single airplane carrying mail or cargo, through full-service international airlines operating hundreds of airplanes. Airline services can be categorized as being intercontinental, intra continental, domestic, or international and may be operated as scheduled services or charters.1 The Cathay Pacific Airlines The Cathay Pacific enjoyed dominating the Hong Kong aviation market from 1959 as the sole Hong Kong based carrier after rival Hong Kong Airways merged with Cathay Pacific. Thus, the airline continues to be one of the world’s leading airlines and awarded with a Five-Star Airline ranking.2 The Analysis The Political aspect is involved in the study of the airline’s nature and business. Since every airline considers individual liberty and equality, there are suggested key lessons for the Airline Industry.3 1. Liberalizing markets over different timescales or removing restrictions on operations without removing those on ownership can create distortions and reduce the potential benefits that are available. 2. The structure of the airline industry means that removing operational restrictions can lower barriers to entry to the industry. But it will not maximize the potential benefits to customers, airlines and the wider economy unless ownership restrictions are also removed. 3. Further operational and ownership liberalization can protect and enhance the consumer benefits, in terms of greater choice and lower fares, already obtained from liberalization so far in the airline industry. 4. Liberalization can create the freedom for airlines to operate on a fully commercial basis. This will allow them to allocate capital more efficiently, to respond better to changes in demand in markets and to improve productivity. 5. In a fully liberalized market, the key for an airline is to recognize where its competitive advantage lies and to focus on it. Liberalization provides opportunities for expanding into new markets as well as threats to existing markets. 6. A multilateral approach to liberalization is preferable.             Most of the countries allowed the government to put its power above the industry. The effects are both good and bad. Good in terms, that the governments give advisory to the industry where there is an outbreak like the deadly influenza, and the banning of some person that sometimes forced to self-exile. On the other, it is bad in the business that sometimes the government over power its shares in the industry and controlling the tax burden.             The Environmental aspect also affects upon the operation and even during the construction of these airline. The Aircraft engines emit noise pollution, gases and particulate emissions, and contribute to global warming and global dimming, even though it is one of the least-polluting forms of travel in the world. The airline industry is responsible for about 11 percent of greenhouse gases emitted by the U.S. transportation sector.4             When the Social aspect enters, the question for unemployment can be answered by this kind of industry for the airlines needs more than a hundred of employee. But definitely, there are some positions in this industry that needs license, especially in pilot and mechanical engineering.             The target market, although limited, the industry can create their travel experience in different ambience. They can choose from different classes of passenger’s seat that will be affordable to their tight budget. The travel industry is fully equipped, together with its different travel partners such as the travel agency, which they can offer to their clients. The Technology line of the Industry is perfectly assured for their clients’ security and safety. Many accidents already happened from the past years, and the declining of the clients’ interest in boarding to an airline is alarming in the business’s part. Some sort of these accidents is blame to the malfunctions of the engine and other parts of the plane. The reliable technology is really needed and the efforts for the continuance progress can lead an airline to recollect the trust from the clients. The industry fully relied in the specialty of the new acquired machines. The choice of this analysis is based on the PEST Analysis which means Political, Environmental, Social, and Technological aspects which measures the capacity of a business not only in serving the target market but also in the environment that surrounds it. Economic Overview Although many countries continue to operate state-owned or parastatal airlines, many large airlines today are privately owned and are therefore governed by microeconomic principles in order to maximize shareholder profit.5             The rise and downfall of an industry is based upon the performance of the business in the past years or how it currently performing. The economy of a country that relied on the tourism industry is also partnered by the travel industry. At some point they are different for the reason that tourism promotes the country’s beautiful sceneries that some presents as a reverie, while the travel industry is the one line to reach a destination. The partnership of two different kind of business are good for they are often comes together. A wise traveler usually booked the place through the use of an agent and the travel agent will do the rest.             The growing industry of tourism is positively affecting the main driver, the travel agents as well as the airlines. And together they will help each other to reach their goals individually.       References: 1.      Airlines [Online] Available at: http://en.wikipedia.org/wiki/Airline [Accessed 31 July 2009]. 2.      The Cathay Pacific [Online] Available at: http://en.wikipedia.org/wiki/Cathay_Pacific [Accessed 31 July 2009]. 3.      Smyth, M., & Pearce, B. (2007). Airline Liberalization IATA Economics Briefing No.7 [Online] Available at: http://www.iata.org/NR/rdonlyres/C3216440-783D-438E-AF51-7AEC69119B1A/0/IATA_AirlineLiberalisation.pdf [Accessed 31 July 2009]. 4.      Environmental Impact [Online] Available at: http://en.wikipedia.org/wiki/Airline#Environmental_Impacts [Accessed 31 July 2009]. 5.      Economic Considerations [Online} Available at: http://en.wikipedia.org/wiki/Airline#Economic_considerations [Accessed 31 July 2009].     Credit:ivythesis.typepad.com

Strategic Knowledge Case Study Paper on Cathay Pacific

The Airline An airline provides air transport services for passengers or freight, generally with a recognized operating certificate or l...

Cathay Pacific Airlines : IT the next five years

Task 1: Introduction  Competitive advantage can come from a focus upon key competencies. Capabilities, meanwhile, reflect an organization’s ability to use its competencies (Lowson 2002). Capabilities represent the firm’s ‘collective tacit knowledge of how to initiate or respond to change that is built into an organization’s processes, procedures and systems, and that is embedded in models of behavior, informal networks and personal relationships. It is noted that capabilities and competencies are dynamic and constantly changing. The pattern of decisions tends to be of a medium to long-term nature and supports both the core capabilities and competencies of the company, and how it uses resources and technologies to provide sustainable competitive advantage in the future. There have been many historic changes in organizational theory over the twentieth century. Some can be directly assimilated as changes in operations strategy (Lowson 2002).     It is the unique architecture of each operations strategy that provides an essential strategic contribution to achieve sustainable competitive advantage. From this people can speculate that organizations will have not one, but many operations strategies. Each may have common components, but each has a unique and individual emphasis that is dictated by a number of factors such as trading partners, supply system configuration and demand behaviors. The building blocks of an operations strategy can be viewed as forming a composition matrix that fuses them together as a reaction to the demand and supply system circumstances. The operations strategy is then contingent upon its particular circumstances. It is a factor that has considerable benefits to its subsequent implementation. The mission of an operations strategy will outline and define its overall direction. The mission must also proclaim those areas of excellence and core competencies that are capable of securing competitive advantage (Lowson 2002).    Companies cannot survive without an effective competitive strategy; an effective competitive strategy gives a company an easier chance of attaining its goal with lesser focus on the problems they have. A company that is wiling to use a competitive strategy must create changes in technologies. Businesses undergo various changes depending on the situation in the industry and the demand for change by the internal and external environment. One change is the use of information technology and its related technologies. These technologies make business transaction be done with faster and with lesser errors. Business improves their technologies so that they can create better products, improve their competitiveness against other firms and provide better service to clients. They also improve their technologies to correct any things not working well for the company’s operations. The improvements in the technologies can make the business and the employees perform better or it can create more problems for the company. It can also help the company reach its goals. The paper will discuss about Cathay Pacific, its ticketing system and how it was impacted by the use of Information technologies. Aims and objectives The aims help the study have a specific direction and can help the study in enclosing itself to reasonable boundaries and limits.  The aims and objectives will provide the guide on what topics will be needed in the study. Thru the objectives the study will be able to attain the necessary information that can help derive conclusions on the study. The objectives of the study include. The aims and objectives of the study include determining how information technologies helped various airline companies and their respective ticketing system over the years; Determine whether information technologies created an impact to Cathay Pacific Airlines particularly its ticketing and booking systems; Know the barriers that have prevented Cathay Pacific from realizing the benefits of information technology .Know what were the risk Cathay Pacific Airlines, its ticketing system and other businesses in the Airline industry was forced to take when they decided to make use of information technologies.   Sources of data The data will come from research through the internet; books, journals, related studies and other sources of information. Acquiring these various kinds of data is more convenient to use because they are already condensed and organized. Moreover, analysis and interpretation are done more easily. These additional data and information will also be used to support as well as contradict the findings of the study depending on the credibility of the authors and the journals where they were found published. Background of the company Cathay Pacific was generally seen as a quality airline, but one strongly associated with Hong Kong’s colonial past. A major challenge for the future was for Cathay Pacific to be perceived as more Asian rather than British/Asian in order to strengthen its market abilities in Asia including attracting a wider Asian customer base, as well as to reflect the changed political realities in Hong Kong. In short, the company needed to align its Conceived Identity with its new Identity. Cathay Pacific chose to undertake this identity realignment through a massive coordinated set of initiatives intended to transform the reality of the company to achieve the new perceptions that would reflect the new strategy and permit communications based on the substantive changes (Balmer & Greyser 2003). Cathay pacific is one of the most well known airline company in the world. It competes with different airline companies for prestige and notoriety in the airline industry. Recently the company underwent a change in image and strategies to counter the problems its industry has. It shifted the focus of its strategy into making sure that their will be an increase of clients who demanded their services, it also made sure that the services and technologies they use can be competitive to other airlines company.   The company has taken advantage of the information technology revolution and updated it with their ticketing system and booking system. The company makes sure that whenever someone wants to have his/her flight booked the data they will share can be available within minutes and information can be easily found.  The company’s system also makes it easier for a client to transact for tickets and acquire that ticket that will be used for the flight. Task 2: External Analysis How the industry affects the organizational strategy The situation in the airline industry is different from the situation in the manufacturing industry, fast food industry, retailing industry or other kinds of industry. The airline industry needs to make sure that the best service can be given to the clients. It also has to make sure that the best technologies will be used to serve the clients. To avail the services of airline companies, clients have to pay more. The payment of the clients should be replaced with the equivalent service. Therefore the strategies of Cathay aim to provide the same worth as the prices of accommodating their services. Cathay is forced to make sure that their services and the technologies they use will be in the same level as the payments made by the clients. Their strategy on their service and the technologies they use will then be improved further to meet clients’ expectations. Another way for the type of industry to affect the organizational strategy of the company is through responsibility of the industry to its clients. The airline industry has a responsibility to make sure that the welfare of the clients is being taken care of thus Cathay makes sure that they have strategies that pertain to the responsibility of the industry to take care of its clients. Whenever there are untoward incidents or situations while the service is being rendered, Cathay has a different set of strategies that will make sure that nothing will happen to the clients under an unexpected situation. Businesses can succeed in a certain industry that for them looks unpromising. With proper strategies they can survive in an industry that no one wants to engage business in and no one wants to be a part of.  Building market share should not be priority of business rather the company should have a strong competitive advantage before they can have market shares. Resources should not be always a concern for the company since success can be achieved if there are limited resources.   How does IT impact the industry’s positioning for competitive advantage The airline industry made use of Information technology as an alternative tool to provide service to its clients. The members of the airline industry made use of websites to interact with clients and help them transport information they need when it comes to flights and ticketing. The web site offered solutions to improve the different booking and ticketing processes; improve customer service and reduce cost for both the company and the clients.  The different services offered by the web site includes tracking flight routes and destinations, information for rates for each transportation or flight travel, and schedules for each flight. Information technology helped the industry introduce newer means for them to provide service to the clients; this helped the industry put itself in a position that has a distinct competitive advantage.   Likely impact of IT on the organization Information technologies are something that is constantly evolving and being improved over the course of time. It grows and adapts to the changes in the society. As time goes by IT is changing its different techniques in providing service to the clients and in making business transactions be done in the shortest time possible. Cathay Pacific’s use of IT can help it to have better internal and external communications. Cathay Pacific’s use of IT leads to better communication with different departments and divisions in the firm. The company’s use of IT also leads to better procedures in delivering funds, goods and information. The major change in IT that can trigger a major change in the industry is when IT cannot provide support towards newer and complicated problems that give the industry and firms within it difficulty to achieve each of their goals.   PESTLE analysis Political The company will not get any good reputation, trust and success if it will not be aware of what is happening in the political sector of the country. The company and the airline industry have made sure that they were aware of the political situation of every country they have operated in and the company has its position with regards to political issues. Cathay Pacific and the airlines industry is continuously prepared for any problems concerning the political sector.   Economic Cathay pacific and the Airline industry can be said to be economically stable for the past years. Its economic stature is doing well that’s why they try to improve their products to give the best to their clients. It is not only the internal economic situation of the company should be taken note of but also the economy of the country, the company and other airline companies checks first the economic status of the country they are operating in before making decisions because making decisions during a difficult time on the economy of another country may cause catastrophe for the company.   Social Cathay Pacific and the Airline industry make sure that the service they offer and the technology they use to tender their services will be accepted by the public. The company and the Airline industry do not authorize the delivery of some services they know will cause outbursts or complains from different group in the society. The entertainment provided in flights will not contain anything that will cause problems with the passengers. The company and the industry make sure that they have a very good relationship with different sector in the society. They make sure that ethical practices are part of their strategies.  The industry and the company also engage in social activities that tend to develop a better relationship between them and the clients.   Technological Cathay Pacific and the airline industry offered new innovations in its technological aspect and introduced new concepts with regards to its industry. Since technology rapidly changes the company and the airline industry makes sure they are updated to what is happening and they can adjust to these changes. Cathay Pacific and the airline industry make sure that the services they offer are updated with regards to what technology is used to tender their services.  If other companies use new technologies to provide services, the company has the technology capable of competing with such technologies.   Legal             In any country there are laws that need to be followed. These laws restrict or allow any action to be done. The laws make sure that the people do what is right and just. It prevents any arguments or differences. Cathay Pacific and the airline industry make sure that it follows the different laws of a country they engage transaction in. The company and the industry also make sure that the different local and international transportation laws are followed in any trips made by the company. The company doesn’t want to risk their client’s welfare by breaking local and international transportation laws.  Cathay Pacific and the airline industry follows the international air travel laws that provides laws on different things like the route allowed for every flight.   Environmental The world is starting to be more conscious of building a better future for the children. Every possible way to ensure a better future is used. Different organizations are doing things to ensure that the future will be a bright one. Cathay Pacific and the airline industry make sure that the technology they use to tender services to their clients will cause minimal problems to the environment. The airline industry puts up certain regulations on the gases and other equipments used on the air transport devices. The industry makes sure that the gases and the equipment will not be the source of more environmental problems. The Airline industry has also introduced better waste management strategies that aim to reduce pollutants and create a cleaner environment for the future.   Optimistic future scenarios for the industry One optimistic scenario for the industry is the further improvement of technologies used in delivering the services.  The technologies used by the industry may be better and more adaptable to the needs of the clients. The technologies may be so advanced that travel time from one country to another may be lessened. Another optimistic scenario for the industry is better security measures that will ensure the safety for both clients and personnel of the company.  This security measure is to counter terrorist attacks.   Pessimistic future scenarios for the industry One pessimistic scenario for the future is an alternative source of transportation that will ensure lesser traveling time will be used by the clients. People might discover a newer and faster means for traveling that costs less and takes them to their destination faster. This may mean loss of clients and probable extinction of the industry. Another pessimistic scenario for the industry is higher cost of operations for the firm. Due to rising cost of materials and supplies to operate business, the company might be forced to raise their fees. Not all clients can afford the change in fees thus the firms in the industry will lose more clients.  Task 3: Internal Analysis of the company Strengths A strength of the company is the cutting edge quality service they offer. Cathay pacific constantly checks for new technologies that the suppliers can provide to them, this is done for the company to meet the needs of their clients. The company makes sure that the technologies they use to provide the service are updated. Employees are an important part of a company. They should be well taken care of. In relation to such one of the strengths of the company is the way it treats its employees. The company gives special recognition to those who did well and served the consumers well. Recognition boosts the employees’ confidence and makes the employees work harder and it brings a sense of competition between the employees.   Cathay pacific strength with regards to its employees is the way their workers are selected and trained. The company makes sure that the employees are well selected and trained for them to produce well and achieve the goals of the company. These employees passed certain entrance tests and meet certain requirements, these test are used to know the capabilities of the people. A strength of the company is being in the top position in international airline surveys. These surveys have different aspects like in comfort, service, food and overall service.  Lastly a strength of the company is the modernized and big in size fleet of plane it has. They have an considerable number of aircraft fleet that are maintained properly and replaced abruptly when there is a need for it.    Weakness The main weakness Cathay pacific has is they tend to dispose aircraft while such aircraft has still high resale value. The company fails to see the use of the aircraft that they may not need but can be sold to other organizations. The company is not able to see the capabilities of other things that the company deems as unusable.   This weakness if not given proper attention and immediate action can lead to wastage of finances and eventual downfall of the company   Organizational structure The company‘s top man is the Chairman Christopher Dale. The CEO of the company is Anthony Tyler. The finance director is Robert Atkinson. They are the ones that lead the company; underneath them are department heads, sector managers and other personnel that work in different locations. This structure of the company intends to promote teamwork and camaraderie amongst the members of the organization. The people responsible for decisions on strategies the company intends to use include the Chairman and the CEO.   Organizational culture Organizational culture instills in the organization a common sense of identity. This kind of culture helps in aligning the values and norms of the employees to the values and norms of the organization. Organizational culture instructs a company to work as a social system. Moreover this kind of culture serves as a reference for employees whenever they have to undertake productive activities and this will help to behave better in doing the productive activities.  Organizational culture gives guidance for the employees to act accordingly in various situations in the company.  The organizational culture of Cathay Pacific is concentrated on making sure that their missions will be attainable. The missions include providing service straight from the heart, make sure that clients are safe whenever they are using the transportation services of the company,  encourage to their employees product leadership, make sure financial returns are made and provide beneficial career opportunities to willing and acceptable employees.   Human resources of the company To have competitive advantage over competitors means that a company must have a good relationship with the personnel. To maintain good relationship with employees means that the company makes sure that the welfare of the employees are protected.  Employees who are properly cared for can be competitive with employees of rival firms. Cathay Pacific makes sure that the employees they hire will be an asset to the company. They hire the best people for a specific job. This people are trained well by the company so that each employee will have an important role to play in the company. The company provides various financial and compensation packages to their employees. This ensures that for every effective service the employees do they are greatly rewarded.  The company also recognizes and gives awards to employees who perform above standards and do things that exceed what is expected of them. Effective organizational strategy A key challenge for any organization in the twenty-first century is to seek to maintain and improve its performance in an increasingly complex and competitive global operating environment, where change pressures appear to offer the only certainty (Milner 2000)Cathay Pacific makes use of the best service strategies that intends to make an identity separate from the competitors. It concentrates on providing excellent service to clients.  That is the reason why the company made use of information systems. The company introduced the information technology systems on the belief that it will help them provide a different kind of travel experience. The company saw the potential of information technologies and how it benefited other firms.  The company tries to know the newer advancements in information technology that can help them provide a better service to their clients.   Porter’s five forces Potential Entrants             Cathay Pacific has been around for a quite some time and the company is not greatly affected by the new entrants. The influence of potential entrants to the company is weak. But to ensure that no other problem arise the company and the ticketing and booking system used by Cathay pacific maintains low cost for the different expenses they make, this helps in making sure that the new entrant will not have advantage over them and it makes sure that the company and the different departments within it cannot be outrun by this new competitor. Competitive rivalry             Competitive rivalry highly influences the company. Different things are done by the company and the ticketing and booking system used by Cathay pacific to ensure that they have advantage over their competitors one is a strategy wherein they give the best kind of service to clients. This kind of strategy gives the company a better relationship with the clients. The company and their members also offer unique flying experience to the clients thus giving the company’s rivals additional worries and concern for each of their future.   Substitutes  Substitutes exist when a certain market has a situation of high prices. In this market clients look for a company that can offer lower prices for their products or services. Substitutes can also be in the form of alternative services that a client deems appropriate for his/her need and capabilities. Substitutes give high influence to the company and its different departments since substitutes can make a company lose the clients it has. The company and its different departments make sure that the substitutes won’t give them much problem. They do this by proving that the service they offer and the technologies they use to provide the service are the best quality and are better than substitutes.   Bargaining power of buyers and sellers  The bargaining power of buyers is a standard of how the client can put the business in a tight spot wherein the client dictates the price of a product. The bargaining power of buyers highly influences the company its different departments. It shows how the company tries to create good relationships with clients. As much as possible the company maintains reasonable prices for their fares, they also have promos and discounts that intend to make the clients have second thoughts on purchasing tickets from other companies. When the clients try to dictate lower prices the company tries to know whether it is reasonable and it isn’t it has no choice but let the client go. The bargaining power of sellers is a measure of how suppliers can dictate the price of materials needed by the company. The bargaining power of sellers highly influences the company. The company makes sure that their suppliers have high bargaining power through helping them show their importance in the industry.  The company makes sure that the price being asked for a material has the same value as the same materials’ quality and durability. This will ensure that budgets will not be wasted.   Effect/probability action grid   Effect Probability Information Technology Improved service through better communication. Technology not used well can cause problems. Internet systems Faster and efficient way to deliver information to different sources. Security and privacy will always be a concerned. Competitive systems Have advantage over the firm’s rivals. Must be properly used to achieve desired results.   Task 4 Key issues related to systems development Many systems developers tend to view methods as precise directions to be followed rather than guidelines to be adapted to the situation. When methods must be adjusted or cannot be applied, common reactions are often that the method is inadequate, or that failure occurred because the method was not followed closely enough. Although systems developers in their daily work often adapt methods according to their needs, such adaptations are usually talked about with an air of apology; people feel they did not do things right, and thus, adaptations are conceived of as faults or deviations. It takes a fair amount of project experience, reflection, and self-confidence to be able to distinguish between the methods itself and the practical use of the method. Systems developers’ attitudes to the use of methods are related to questions of participatory design in several ways. When people are faced with new dimensions in their practical work, they tend to deal with them in the same way as they deal with other aspects of their work (Namioka & Schuler 1993).    Their preconceptions of what systems development is about may shape the way they understand what participatory design is about. If they look upon methods as rules to be followed, it is likely that much effort will go into formulating rules for participation too and less effort into finding out how to make participation successful. Also, if the rules are used ritualistically, the mutual benefits from participation may be reduced. This will undoubtedly confirm the belief of many systems developers that user participation is merely a nuisance and should be kept to a minimum (Namioka & Schuler 1993).In a soft systems methodology different aspects are considered this includes analyzing the HAS, Information modeling, social and technical requirements, Human/Computer interface and technical solution. The human activity system (HAS) is composed of three core items. The first, the rich picture, is devised to show the principal human, social and cultural activities at work in the perceived environment. The rich picture usually includes the structures and processes at work in an organization. The second element is the root definition, which, by identifying the key clients, actors, things to be done, assumptions, problem owners and environments, attempts to structure the results of the rich-picture analysis into a common perception by analyst and clients (Bell 1996).   The second stage of the analysis is information modeling. In this stage the analyst adopts a more hard and technical approach. The aim of this stage is to develop the conceptual model into a workable system. Information modeling attempts to draw together the major entities, the functions of these entities, the events which trigger the functions and the attributes of the entities. This stage is necessary in order to translate the key points identified in the conceptual model into a set of human and computer-related functions and entities which can be designed into a new system (Bell 1996).The third stage requires the analyst to attempt to bring together the optimum mix of social and technical aspects, taking into account costs and constraints. This stage should provide the appropriate mix of technology and person power to implement the system. The fourth stage deals with the human/ computer interface (HCI). This involves designing the means by which the two aspects of the proposed information system can best communicate with each other (Bell 1996). This stage is usually concerned primarily with the technical interface operating through screen dialogues, but the social impact of technology in the workplace and issues of data security can also be included here. The fifth and last stage involves the design of the necessary technical aspects which combine to produce the overall technical structure. These aspects include management and control, database, retrieval and application (Bell 1996).   For every company putting up an information technology system is a rigorous but beneficial task. Setting up an information system requires a well thought out plan of action that intends to make sure that order is maintained as the information system is built. There are many things that should be considered before the system can be put into the company. The things that has to be considered in creating an information technology system is the budget for the project, the timeline for the creation of the information technology system, the focus of the information technology system and the probable effects of the information technology and its system. In creating an information technology system, the budget has to be known so that all the materials that will be needed can be minimized or maximized according to the system. The timeline will provide instructions on the step by step process of creating the system.  The information system should have a focus. It can either be an internal agenda or an external change.   How the environment influence system development Many organizations are dependent on information technology and information systems in running the business. These information systems are often very complex and very expensive to develop, therefore organizations need a way to develop such systems in order that they can realize the benefits expected of them. The information systems must deliver the requirements of the business plan or strategy (Tansey 2002). The internal and external environment of Cathay pacific plays a big part in the creation and improvement of its information technology systems.  The internal and external environment of Cathay pacific helps in analyzing whether the information technology system used by the company still fits the need of the environment. The internal and external environment dictates what information technology system needs to be used by the company.   In changing or altering its information technology systems Cathay Pacific considers different factors that will affect the process of changing the system. Cathay Pacific considers first its internal capacities and fixes its internal conflicts before knowing means on how to improve the information technology systems. The company then knows the situation in the industry and what changes have been done by the industry in terms of their own information technology strategy. The company also sees to it that economic indicators are doing well before doing any changes in the information technology systems.   The company then checks the need of the clients how it relates to the IT system.   References Anderson, RH, Bikson, TK, Hundley, RQ & Neu, CR      2003, The global course of the information revolution: recurring themes and regional variations, Rand, Santa Monica, CA.   Balmer, JM & Greyser, SA 2003, Revealing the corporation: perspectives on identity, image, reputation, corporate branding, and corporate-level marketing an anthology, Routledge, New York.   Bell, S 1996, Learning with information systems: learning cycles in information systems development, Routledge, New York.   Blenkhorn, D.L. & Fleisher, C.S. (Eds.). (2003). Controversies in competitive intelligence: the enduring issues. Westport, CT: Praeger.   Boyd, G & Sletmo, GK (eds.) 1993, Pacific service enterprises and pacific cooperation, Westview Press, Boulder, CO.   Cathay Pacific Airways 2005, Company profile, viewed 22 January, 2008, <www.cathaypacific.com>.   Chen, TP, Flowers, EB & Shyu, JP (eds.) 1999, Interlocking global business systems: the restructuring of industries, economies and capital markets, Quorum Books, Westport, CT.   Currie, W & Galliers, B (eds.) 1999, Rethinking management information systems: an interdisciplinary perspective, Oxford University Press, Oxford.   Doganis, R 2002, Flying off course: the economics of international airlines, Routledge, London.   Doganis, R 2001, The airline business in the twenty-first century, Routledge, London.   Hart, JA & Prakash, A (eds.) 2000, Coping with globalization, Routledge, London.   Jacko, JA & Sears, A (eds.) 2003, The human-computer interaction handbook: fundamentals, evolving technologies, and emerging applications, Lawrence Erlbaum Associates, Mahwah, NJ.   Lafferty, WM & Rosenstein, E (eds.) 1993, The challenge of new technology and macro-political change, Oxford University Press, Oxford.    Laurila, J & Preece, D (eds.) 2003, Technological change and organizational action, Routledge, New York.   Lowson, RH 2002, Strategic operations management: the new competitive advantage, Routledge, New York.   Mansell, R & Wehn, U (eds.) 1998, Knowledge societies: information technology for sustainable development, Oxford University Press, Oxford.   Milner, EM 2000, Managing information and knowledge in the public sector, Routledge, London.    O’Connor, WE 1995, An introduction to airline economics, Praeger Publishers, Westport, CT.    Namioka, A & Schuler, D (eds.) 1993, Participatory design: principles and practices, Lawrence Erlbaum Associates, Hillsdale, NJ.   Tansey, SD 2002, Business, information technology and society, Routledge, New York.   Thierauf, RJ 2001, Effective business intelligence systems, Quorum Books, Westport, CT.     Credit:ivythesis.typepad.com

Cathay Pacific Airlines : IT the next five years

Task 1: Introduction Competitive advantage can come from a focus upon key competencies. Capabilities, meanwhile, reflect an organization...

A Business Case Study of Cathay Pacific Airways

Business Case Study     Background of the Business             Cathay Pacific Airways in an international Hong Kong based airline that offers scheduled passenger and cargo to 118 destinations in 37 countries and territories. The company has earned the reputation as one of the world’s leading airlines and Asia’s biggest and most regarded airline. The company was founded in 1946 in Hong Kong. Cathay Pacific is committed to uplifting Hong Kong’s airline industry and invests in making Hong Kong one of the world’s aviation hubs. In addition to Cathay Pacific’s expanding fleet of aircraft, the company has invested in other related businesses such as catering, aircraft maintenance and ground-handling. Cathay Pacific owns Hong Kong Dragon Airlines Limited (Dragonair) and partners with Air China Limited. In addition, the airline is also a major shareholder in AHK Air Hong Kong Limited which is an all-cargo carrier offering scheduled express-freight services within Asia (Cathay Pacific Annual Report 2007).             The company together with its subsidiaries employ almost 20,000 people in Hong Kong. In 2007, Cathay Pacific recorded a total profit of HK,023 million. The key driver for this profit was strong passenger demand, helped by a weak dollar, fuel hedging gains and the profit contribution from its associates such as China Air. In 2007, the company also faces problems especially the rising fuel prices. The company gained from the strong passenger demand especially from first class and business class passengers (Cathay Pacific Annual Report 2007).             However, the gains in 2007 were not maintained in 2008. Cathay Pacific’s Interim Report for the first half of 2008 reveals that the company has lost HK3 million for the first six months of 2008. The main reason for this was the exorbitant fuel increase. In line with the company’s commitment to the environment and in order to cut fuel price, Cathay Pacific constantly updates its aircraft fleet, making sure to operate the most modern, fuel-efficient fleet possible.   Organizational Structure             The company has a functional organizational structure with the Chairman on top of the organizational hierarchy. The organization is divided into different functional units that are headed by a Director. This organizational structure according to Sims (2002) is based on early management theories regarding specialization, line and staff relations, span of control, authority, and responsibility. The major functional subunits are staffed by specialists in such disciplines as engineering and accounting. It is considered easier to manage specialists if they are grouped together under the same head and if the head of the department has training and experience in that particular discipline. The management team is composed of the following:   <ul style="margin-top: 0in; margin-bottom: 0in" type="circle"> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Chief Business Executive and Chairman – Chris Pratt</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Chief Executive – Tony Tyler</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Chief Operating Officer – John Slosar</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Director of Corporate Development – Augustus Tang</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Finance Director – Robert Atkinson</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Director of Flight Operations – Nick Rhodes</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Director of Information Management – Edward Nicol</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Director and General Manager Cargo – Ron Mathison</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Director of Corporate Affairs – Quince Chong</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Engineering Director – Christopher Gibbs (Management Team, Cathay Pacific, 2008)</li> </ul>  The functional organizational structure that Cathay Pacific has in place promotes specialization of skills. People are grouped together who perform similar work and face similar problems. This facilitates communication within departments and allows specialists to share their expertise. It permits clear identification and assignment of responsibilities, and employees easily understand it.    Mission and Objectives of the Business             Cathay Pacific is an International airline that aims to be the most admired airline in the world. The company is committed to Hong Kong and its aviation industry. The company made substantial investments in making Hong Kong a prime aviation hub in the world. The company strives to: 1. Ensure that safety comes first 2. Provide quality service “Service Straight from the Heart” 3. Achieve product leadership 4. Reward employees with rewarding career opportunities   Key Business Strategies 1. Award Winning Products and Services             In May 2007, Cathay Pacific introduced its innovative new three-class long-haul in-flight product on its existing long-haul fleet. Included are First Class Suites, full-flat beds with enhanced privacy in Business Class and Unique Economy Class seats that recline with their own shell. The airline also introduced new state-of-the art entertainment for its passengers.             Cathay Pacific believes that its business is selling experience to the passengers. The emotional bonding with the passengers is the key to building loyalty and one of the major factors that encourage the customers to repurchase the airline products. The biggest difference of Cathay Pacific to its competitors is its people. The employees at Cathay Pacific are the ones who bridge the gap between product development and customer expectation. The passengers in Cathay Pacific always feel welcomed, appreciated and reassured. Passengers that travel with Cathay Pacific know that they are in good hands. Service Straight from the Heart is a programme that aims to develop cultural change within the airline focused on improving customer service. Service is the principal means of differentiating between airlines and is highly influential in customer choice.  Cathay Pacific has expressed within its programme its understanding of the importance of the people within the organization and its recognition of the contribution of those people to its success.   2. Hub and Fleet Development             Leveraging its codeshare arrangements with Dragonair, Cathay Pacific added new destinations to its network – Busan, Changsa, Fuzhou, Kathmandu, Qingdao, Sendai and Wuhan. The company also increased the number of flights in some of its major routes. The company maintains an enormous fleet with a total of 112 aircrafts. Cathay Pacific constantly adds new aircrafts in its fleet. 3. Pioneer in Technology             Cathay Pacific continues to be a leader when it comes to technology and innovation. It was among the first airlines in Asia to use electronic ticketing. In order to offer consumers with added convenience, the company also supports of Online Check-In. 4. Commitment to Human Resources             In 2007, Cathay Pacific and its subsidiaries employed more or less 26,000 people worldwide. With the expansion of Cathay Pacific’s fleet, more jobs will be created. The company is an employer of choice providing career opportunities for new graduates. The company continues to introduce leading-edge training and development programs to enhance the knowledge, skills and abilities of its workforce.             Human resources or human capital is the intangible resources of abilities, effort, and time that workers bring to invest in their work (Davenport 1999). The people at Cathay Pacific are the major contributors of strategic capability to the company. One of the advantages of Cathay Pacific over its competitors is the quality of service that the staff provide to its customers. Service has a big impact on the customers’ perceptions about the company’s product. Because of the importance of its people, Cathay pacific formulated an employee development strategy through proper and effective training. This strategy is expected to strengthen Cathay Pacific’s position in the marketplace.  Employee development can be an essential ingredient of an organization’s competitive advantage. Employee development includes all of the education and training that organizations might invest in their employees such as training employees to perform effectively in their current jobs, orienting employees to the workplace, developing them for advanced positions or programs, and building organizational capability for future success (www.cathaypacific.com). Cathay Pacific promotes a working environment wherein the employees are free to act in both the company’s and passengers’ best interests.   Stakeholders of the Business             A stakeholder is defined as an individual or a group that has one or more of the various kinds of stakes in a business. The individual or group can affect or be affected by the actions, decisions, policies, practices, or goals of the organization (Sims 2003).       A. Internal Stakeholders <ul style="margin-top: 0in; margin-bottom: 0in" type="circle"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Shareholders – the shareholders participate in distribution of profits, additional stock offerings, assets on liquidation, inspection of company books, election of board of directors and other rights established in the contract with the firm. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Employees – Employees are believed to be a source of competitive advantage. The knowledge, skills and abilities of the employees contribute to the success of the organization. In return, the employees expect economic, social and psychological satisfaction in the place of employment. The employees also expect freedom from arbitrary and capricious behavior on the part of company officials. The employees expect to share in fringe benefits, freedom to join union and participate in collective bargaining, individual freedom in offering up their services through an employment contract. </li> </ul>   B. External Stakeholders <ul style="margin-top: 0in; margin-bottom: 0in" type="circle"> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Customers – the customers are the source of the firm’s earnings. The customers purchase the firm’s products and services in exchange with satisfaction of needs, wants and requirements. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Suppliers – the suppliers are part of the firm’s value chain. In exchange with the suppliers products, services or expertise the firm is expected to be a source of business and facilitate a professional relationship in contracting for, purchasing, and receiving goods and services. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Competitors – competitors are also important stakeholders. They expect the company to observe the norms of competitive conduct established by society and industry.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Governments – the Hong Kong government and other governmental departments are important stakeholders that have direct impact on the firm’s strategies. The government expect the firm to pay taxes, to adhere to the letter and intent of public policy dealing with the requirements of fair and free competition; discharge of legal obligations. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%">Local Communities – the local communities are also important stakeholders. The firm needs to participate in community affairs and to provide regular employment and support to the local government. </li> </ul>     Relationship between the Business and Its Environment             The business is affected by a variety or environmental factors. Political, Economic, Social and technological factors affect Cathay Pacific. In order to succeed in the airline industry, Cathay Pacific changed its strategies in accordance with the changes in its environment. Political             The company is subject to government policies and regulations. The company must also follow the standards and procedures set by governing bodies. Policies on climate change affect the company’s operations and strategies. Economic             Hong Kong remains the financial hub of Asia. There is minimal rate wars in this side of Asia as there are few direct competitors. Cathay Pacific joins alliances and partnerships with other airlines in order to minimize competition and to avoid price wars. Hong Kong has codesharing partnerships with Dragonair, giving both airlines more capabilities to enter markets that are risky to do on their own. Perhaps one of the challenges that Cathay Pacific faces in the economic sphere is the fluctuating fuel price. Social             There has been a steady demand among business passengers. As Hong Kong continues to be on the center of Asian economy, an increase in demand in business flights is expected. However, passengers are also exploring other affordable alternatives. Technology             Technological advancements are introduced in a breathtaking speed. Airlines spend considerable amount of money in order to keep up with the trends. There is an expansion of wireless technology.   Integration to Risk Management             Cathay Pacific moves in an industry where risks abound. Competition is very stiff and there are numerous threats. In this section, I will discuss the various risks that the company is facing or may face in the future. 1. Operational Risk – this is the risk that failures in computer systems, internal supervision and control, or events such as natural disasters will impose unexpected losses in a firm’s derivative positions (Culp 2001). There are environmental disasters that Cathay Pacific cannot control such as typhoon, storm, earthquake, and others. These disasters can cause operational risks for Cathay Pacific. Another possible source of operational risk is system failure. Being an organization that relies heavily on technology, system failure can cause severe losses for the company. Management failure also poses as a major risk. 2. Regulatory Risk – this is the risk that actions take by regulators constitute events that can unexpectedly raise costs and risks for market participants. There are two forms of regulatory risk. First is procedural regulatory risk, which is the risk that legal uncertainties and financial losses will result from ill-conceived and costly changes to statutory or administrative regulations. The second type of regulatory risk is judgmental regulatory risk. This risk stems from inadequately informed examiners and regulatory auditors who attempt to review the derivatives of a firm based in incomplete information (Culp 2001). 3. Customer Loss Risk – this is risk that the business loses its customers, either because a competitor attracts them away or because they no longer demand the products and services that the company is selling. If either the demand curve shifts in for exogenous reasons or available substitutes for the good or service being sold become relatively more attractive, the business will find itself in great difficulty (Culp 2001).   References   Cathay Pacific, Annual Report 2007, viewed 27 August 2008, <http://downloads.cathaypacific.com/cx/investor/2007_Annual_Report_en.pdf>   Cathay Pacific, Interim Report 2008, viewed 27 August 2008, <http://downloads.cathaypacific.com/cx/investor/2008InterimReport_en.pdf>.   Cathay Pacific, Management Team, viewed 27 August 2008, <http://www.cathaypacific.com/cpa/en_INTL/aboutus/cxbackground/managementteam>.   Culp,C., 2001, The Risk Management Process: Business Strategy and Tactics, Wiley, New York.     Davenport, T. O., 1999. Human Capital: What It Is and Why People Invest It, Jossey-Bass, San Francisco.     Sims, R., 2002, Managing Organizational Behavior, Quorum Books, Westport, CT   Sims, R. 2003, Ethics and Corporate Social Responsibility: Why Giants Fall, Praeger, Westport, CT.       Credit:ivythesis.typepad.com

A Business Case Study of Cathay Pacific Airways

Business Case Study Background of the Business Cathay Pacific Airways in an international Hong Kong based airline that of...

Cathay Pacific Case Study

Cathay Pacific Case Study             With its headquarters and main hub at Hong Kong International Airport, Cathay Pacific Airways Limited or simply Cathay Pacific refers to the flag carrier of Hong Kong. Cathay Pacific was founded by American Roy C Farrell and Australian Sydney H de Kantzow on the 24th of September 1946. Cathay Pacific aspires to be a leader and will help to share future policies that affect the aviation industry by working with government and its partners as the strength. Cathay Pacific also identifies leveraging its brand and demonstrating that it is a company that can be trusted is its next target. Social and Economic           Basically, Cathay Pacific is committed to Hong Kong and its people that is why through its organisation and management style, various conditions are created to make it possible to deliver campaigns that in part a substantial investment to developing the industry and enhancing the company’s position as a regional transportation hub (Cathay Pacific online; Beckford, 1998, p. 185).           Economically, through the world renowned global airline alliance, Cathay Pacific was able to be a flight of choice since it can provide greater convenience of being able to choose flights on more days, or more flights on any given day. Unique to Cathay Pacific are its campaigns that are initiated to further build and enhance the brand through publicity efforts. Stone, Bond and Foss (p. 228) noted that Cathay Pacific was able to predict customer behaviours by means of personalising service and targeting marketing campaigns.           As such, Cathay Pacific runs over 150 campaigns a year with its three staff and has delivered a 50% increase in ROI of the company. For its corporate brand equity for instance, Cathay Pacific had its tagline as “It’s the little things that move you” (Roberto and Roberto, 2008). These little things are known to be the satisfiers to the passengers which include the smiling flight attendants and freshly-prepared foods in-flight. The latest advertising campaign is “Great service. Great people. Great fares.” (Roberto and Roberto, 2008).  Customer and Competitors           A key strength is through its dynamic team, the highest quality service could be provided hence making the customers happy with their choice. Further, Cathay Pacific is also committed to Hong Kong and its people that is why through its organisation and management style, various conditions are created to make it possible to deliver campaigns that in part a substantial investment to developing the industry and enhancing the company’s position as a regional transportation hub (Cathay Pacific online; Beckford, 1998, p. 185).           As such, the service is renowned because of the people who are always willing to go the extra mile to make the passenger feel special. The people use their training and intuition to provide all those little things that passengers may want even before they start asking for them so passengers can enjoy an exceptional travel experience.           Moreover, Cathay Pacific invests heavily on loyalty programmes as part of its customer relationship approach. There are two loyalty programmes for Cathay Pacific and one among this is the Marco Polo Club, which is a frequent flyer program.           Further, acquiring Dragonair is a change that requires trading off of assets, capitalising on declining profitability of the acquiree. What Cathay Pacific and Dragonair can do to remain competitive in the regional and global airline industries is to strongly disprove the open skies in Hong Kong. Major routes of Cathay Pacific are also being served by five foreign airlines hence passengers have wide choices of carriers as well as schedules and fares of flights. Open skies therefore could threaten the operation of Cathay Pacific and Dragonair. This is to protect the financial stability of Hong Kong as well as that of the two carriers. Cathay Pacific and Dragonair have crucial roles in maintaining the interests of the entire aviation industry particularly in the Asia Pacific region (HKTDC, 2000).           In utilising these short term wins, Cathay Pacific would be able to capitalise on outbound passenger traffic and its increase in the coming years. While Cathay Pacific is maximising the opportunities provided by the access to Mainland China and extend the operation into cities that Dragonair operates, Dragonair could benefit in the volume of cargos that is coming in and out of China as well. Aside from this, Dragonair could eliminate the other competitions to Cathay Pacific in the long run like All Nippon Airways (Flattoau, Matthews and Lott, 2006).   References   Cathay Pacific information, retrieved on 30 November 2010, from http://www.cathaypacific.com. Flattoau, J, Matthews, N & Lott, S 2006, ‘Big Deal?’ Aviation Week & Space Technology, vol. 164, no. 5, pp. 41-42. Roberto, A & Roberto, N 2008, ‘Marketing Rx: Right corporate brand equity for service firm,’ Inquirer, retrieved on 30 November 2010, from http://services.inquirer.net. Stone, M, Bond, A & Foss, B 2004, Consumer insight: how to use data and market research to get closer to your customer, Kogan Page Publishers. The Reality of Open Skies and Its Relevance for Hong Kong, 2000, HKTDC, retrieved on 30 November 2010, from http://info.hktdc.com/message/404.htm.        Credit:ivythesis.typepad.com

Cathay Pacific Case Study

Cathay Pacific Case Study With its headquarters and main hub at Hong Kong International Airport, Cathay Pacific Airways Li...