Cathay Pacific, based in Hong Kong, is an Asian commercial airline founded in 1946. The company offers passenger services and cargo services to 120 destinations world-wide (Cathay Pacific, 2010). Airline business has been noted to be the most competitive business in the world. Market executives should be competitive to cope with the challenges of this kind of business.
Porter’s Five Forces model applied to the organization
1. Traditional Competitors
Airline business is a challenging business. Highly competitive industries generally earn low returns. A highly competitive market might result from sharing market space with competitors (Laudon, 2010). The development of key marketing capabilities has been identified as one of the primary ways firms can achieve the competitive advantage. Cathay Pacific is able to determine and segment its target market. The airline, through information such as the customers’ behavior, preference and backgrounds, makes its products and services more attractive. For example, the company is committed to increase flight frequencies, meet on-time performance goals and growth international route network to meet market demand (Cathay Pacific, 2009).
“A profitable company depends in large measure on its ability to attract and retain customers” (Laudon, 2010, p.97). More and more corporations are adding value to their corporate offering through services. Cathay pacific uses differentiation as its target market position strategy. A differentiation strategy is one where wide product ranges and higher quality offered for the convenience of customer as well as added services (Porctor, 2000). The company is determined to provide their customers with greater ease and conveniences. According to the Cathay Pacific, it was the world’s first airline to offer an online air ticket auction in late 2000 and first in Asia to enable to change booking online in 2010, allowing frequent flyer members...