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600 x 400 Strategic Management at Cathay Pacific

SWOT Analysis of Cathay Pacific 

Muhammad Zeeshan Khan (Date: 10.06.2013)


The framework of SWOT analysis is focused to analyse the company’s strengths, weaknesses, opportunities and threats in relation to its environmental challenges (Quast, 2013) (Appendix 4). The SWOT analysis of Cathay Pacific is showing following result.

(a) Strength:

The major strength of Cathay Pacific has been demonstrated by its global reach and stability from its operations. The recent structuring decision of Cathay Pacific brought the company at such point, where the company has got six-fold increase in profits and 8.7% increase in turnover. The other strengths of the company are implementation of outsourcing of IT infrastructure and operations which have improved the service delivered with great service delivery speed, reliability and effectiveness of services. Further, the Cathay Pacific is a market leader in Hong Kong and also have leading position in the global airline industry. The extraordinary customer services, wide coverage (with one world alliance), customized solutions, fascinating refreshments, and strong brand image have provided the customers with satisfied range of customers. The other key strengths of Cathay Pacific include availability of financial resources, fleet of aircrafts, technological competitiveness and specialized human resource have enabled the company to remain competitive are helping the company in its strategic planning.

(b) Weaknesses:

The weaknesses of Cathay Pacific are also considered important before going to make strategic plans. The major weaknesses of Cathay Pacific are its dependency on other companies, as 65% of operations (strategic and non-strategic) are outsourced, which also rising risks of service failure. Further, the lack of control due to outsourcing also limits the company to utilize maximum performance. However, other weaknesses are poor financial liquidity, poor management, loss due to inefficiency, non-diversification and limited efforts towards innovations. The strategic plans of the company are affected by these weaknesses, causing incompetency, which must be improved.

(c) Opportunities:

There are vast opportunities for Cathay Pacific, which are also considered during strategic planning, such as improving efficiency, capitalizing new trends, starting low cost airline service, consolidate, finding new markets in new geographical locations, alliances and acquisitions, diversification and expanding business into Chinese markets.

(d) Threats:

The major threats have been identified in PEST analysis and five forces analysis, arising implications for Cathay Pacific to go for contingency strategies for managing threats. However, the threat of natural disaster is considerable, as the company have already faced a mishap (explosion in one data centre) that have caused huge loss.

The findings of SWOT analysis are showing that the company is having good strength and range of opportunities, which can be capitalized. However, the implications for Cathay Pacific are to improve weaknesses and also prepare rescue strategies for avoiding potential threats.

 


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