Internal Analysis for Cathay Pacific Airways essay

The analysis of the internal potential, operations, and strengths of the company uncovers opportunities, which Cathay Pacific Airways will have in the future, as well as threats, which the company may confront in the course of its business development (Schmitt, 2001). In this regard, it is possible to use the SWOT analysis, which helps to conduct the internal analysis and gives insights into the competitive position and potential of the company. In fact, internal strengths and weaknesses of the company, which may be revealed in the course of the SWOT analysis, will help to identify opportunities the company has as well as threats, which the company may confront in the future.

Another strength of the company is the fleet, which allows the company to maintain its marketing performance and to provide customers with cargo and passenger flights on the regular basis. The company has a large fleet of modern aircrafts, including aircrafts from Airbus and Boeing, which are leading manufacturers of aircrafts in the world. The modern fleet contributes to the high reliability and safety of flights provided by the company since cases of repair required by aircrafts are quite rare, while costs of maintenance of relatively new aircrafts are lower compared to older aircrafts.

In addition, the company has experienced and well-qualified human resources, which also comprise an important marketing value of the company. At this point, it is worth mentioning the fact that human resources play an extremely important part in the competitive struggle today because human resources have the potential to boost the development of their organization. For instance, human resources can introduce innovations that can improve the performance of the company and boost its business development. In fact, human resources may accelerate the business development of the company because they can improve their performance, even without financial investments being made by the company. Unlike technological innovations or other changes, which require substantial investments, the improvement of the employees’ performance can occur through the use of non-material motivation. For instance, a positive feedback from the part of managers of the company can encourage employees to work better. As employees improve their performance, the organizational performance improves too.

In actuality, Cathay Pacific Airways has a number of strengths, which allow the company to enhance its competitive position and to improve its marketing performance. In this regard, it is worth mentioning the brand of the company as one of the major marketing assets of the company. The reputable and renowned brand facilitates the penetration of new markets and enhances the position of the company in existing markets. In such a way, the company can improve its marketing position exploiting the full potential of its brand. For instance, often customers choose the company, which services they like to use, on the ground of its brand and reputation. In this regard, Cathay Pacific Airways is one of the strongest companies in the market.

On the other hand, Cathay Pacific Airways has certain weaknesses, which affect its marketing performance. First, the company is based in Hong Kong and, in spite of historically strong western impact on their organizational culture, the company still remains oriental company with respective cultural norms and traditions, which apparently affect its organizational structure and relations within the organization. In fact, the cultural background of the company could not be viewed as a weakness, unless the process of globalization and the international market expansion, which raises the problem of the cultural diversity, which the company has to deal with. In fact, Cathay Pacific Airways has to operate in the multicultural environment, as the company enters new markets. Therefore, the company has to adapt its managing style to new cultural norms and traditions of local employees. In such a situation, the risk of misunderstanding and conflicts between representatives of different cultures increases. Hence, the company has to elaborate an effective approach to the successful and effective management in the multicultural environment.

Furthermore, the large fleet of the company needs renewal and expansion. As the company expands its operations, it has to purchase new aircrafts, while the purchase of new aircrafts requires substantial funds and is costly for the company. In such a situation, the company can face the problem of the shortage of financial resources to fund its renewal policies and strategies. At the same time, if the company fails to purchase new aircrafts and to replace old aircrafts by new ones, Cathay Pacific Airways can face the problem of the steady deterioration of the quality of its services and the shortage of aircrafts that can provide services for customers. The lack of aircrafts will lead to delays of flights and late delivery of cargo and passengers. Hence, the risk of the growing customer dissatisfaction increases.

In spite of current weaknesses Cathay Pacific Airways is currently facing, the company has large opportunities to develop its business successfully. The company attempts to enhance its marketing position through the elimination of its weaknesses. At the same time, the implementation of the efficient marketing strategy can help the company to realize its full potential and to use available opportunities.

At this point, it is worth mentioning the fact that the company has an opportunity to take the leading position in the global market. At any rate, Cathay Pacific Airways holds one of the leading positions in the Asia Pacific region and, at the moment, expands its business and operations successfully. In fact, the company is one of the largest carriers of cargo and passengers in Asia, while the further business expansion enhances its position in other markets as well. The Asia Pacific region is the major market for Cathay Pacific Airways but the company operates internationally and offers flights worldwide. In such a situation, the company need to increase its presence in European and American markets to challenge the position of other leaders in the airline industry (Calder, 2002). Nevertheless, even the current share of the global market owned by Cathay Pacific Airways is large and allows the company to maintain one of the leading positions in the global market. In addition, it is necessary to take into consideration the potential of Chinese and Asian market, where Cathay holds the leading position so far. China is one of the most dynamic global markets, which keeps growing in spite of the global financial crisis. Other countries of South East Asia, such as India also have the huge potential (Howard, 2004). Therefore, if Cathay Pacific Airways maintains the leading positions in those markets, the company can enhance its leading position in the global market, due to the growth of its traditional markets.

Therefore, the enhancement of the position of Cathay Pacific Airways in China, as one of the most dynamic markets, is another important opportunity for the company to realize. In fact, this is the strategic opportunity for the company because loosing the lead in Chinese market can undermine the position of Cathay Pacific Airways in the global market since Chinese market is the major target for the company, which owns a share of China Airways, the major airlines of China. Chinese market keeps growing, in spite of the global financial crisis of 2008 and deep economic recession in other countries. Hence, Cathay Pacific Airways can compensate possible losses in other markets due to the growth of Chinese market. In such a situation, the company should keep increasing its market share in China raising barriers to entry for potential rivals. In this regard, the support of the government is very important for the government and Cathay Pacific Airways has such a support so far.

Moreover, the increase of the customer loyalty and satisfaction through the improvement and diversification of its services is another opportunity Cathay Pacific Airways can implement successfully (Pine & Gilmore, 1999). In fact, the company can develop the customer loyalty and satisfaction using the full potential of its human resources and implementing new technologies. In addition, the company may offer new pricing policies as well as new flights, which may meet needs of customers and be more attractive compared to offers of rivals of Cathay Pacific Airways. On the other hand, the company should come prepared to invest substantial funds in the introduction of innovations and other changes to attract customers and develop their loyalty and satisfaction. However, the company can use its human resources to increase the customer loyalty and satisfaction at low costs since human resources may just need additional training to start working better and offering services of the higher quality.

At the same time, along with great opportunities, Cathay Pacific Airways still face a number of threats, which may affect the performance of the company and its competitive position. One of the major challenges to the future marketing success of Cathay Pacific Airways is the tight competition, which forces the company to keep progressing on and on but, at the same time, it requires substantial investments and financial resources to maintain the growth of the company. In fact, today, Cathay Pacific Airways confronts the competition from renowned leaders of the global airline industry, such as British Airways, Lufthansa, American Airlines and others. Confronting such behemoths is extremely challenging for Cathay Pacific Airways because its major rivals have a very strong position in European and American markets, which are traditionally among the largest global markets with the high level of capitalization. In such a situation, Cathay Pacific Airways should not only use its full potential in China and the Asia Pacific region but also enhance its position in Europe and America consistently. Otherwise, the further competition will be quite difficult. In this regard, the growth of Chinese and Asian markets may be quite helpful because they provide the company with essential financial resources, which Cathay Pacific Airways can invest into the development of its business in Europe and America.

Furthermore, environmental concerns of customers are another threat that can affect the business development of Cathay Pacific Airways in the future. Today, customers, especially in Europe and America grow more and more concerned with the environment pollution caused by airlines. This is why European and American policy makers introduce stricter requirements to aircrafts in terms of greenhouse gas emissions. As a result, airlines have to modernize their aircrafts or to purchase new aircrafts to match these environmental requirements. Today, Cathay Pacific Airways has a fleet of relatively new vehicles and does not confront problems concerning the environmental legislation. However, in the future, stricter environmental requirements can raise problems in face of the company and force the company to modernize its fleet to enter European and American markets (Volti, 2005). In fact, the successful business development of the company may be under a threat, if environmental requirements will grow stricter because the costs of the company will increase, while there are no guarantees that customers will stay loyal to the company, especially, if the company is forced to raise the price of its services because of the increased costs.

Another threat to Cathay Pacific Airways is the uncertainty in the global market and the threat of the ongoing deterioration of the economic situation in major markets. At the moment, the global economy has started to recover but the further development of the world economy is still uncertain because early signs of the recovery may be replaced by a new downturn and further steep decline. New global financial crises can affect negatively the business development of Cathay Pacific Airways because of the decline of business activities and, therefore, the drop of cargo transportation by the company’s aircrafts. The global financial crisis of 2008 has had a negative impact on the marketing development of Cathay Pacific Airways because the company has faced the problem of the decline of the cargo transportation and the decline of the flow of passengers (Peters, 2007). As a result, revenues of the company have dropped and the company had to look for options to compensate its losses through diversification of its operations.