Cebu Pacific, the low fare leader in the Philippines entered the market on March 1996 and pioneered the “low fare, great value” strategy in the local aviation industry. Cebu Pacific offers the lowest year round ‘all-inclusive’ fares for its domestic sectors while it continues to sell ‘Go’ fares - providing the lowest year-round fares in all its international destinations. It remains to be the pioneer in creative pricing strategies as it manages to offer the lowest fare in every route it operates. The ‘Go’ fares are not promotional and are exclusive of surcharges and government tax.
Cebu Pacific is the leader in innovation and creativity in the local aviation industry, is the first local airline to introduce E-ticketing, prepaid excess baggage, and seat selection in the Philippines. Customers have also learned to anticipate a uniquely upbeat flying experience with Cebu Pacific, as this is the only domestic carrier that offers fun in the skies with its games on board popularly known as “FunFlights” together with its entertaining in-flight magazine - Smile.
We have identified three major competitors of Cebu Pacific which are Philippine Airlines, Air Philippines and Zest Air.
Based on the CPM, Philippine Airlines is leading in the airline industry it got a total score of 3.70, because of its strength in brand awareness and service quality. Cebu Pacific Air follows with 3.50. Its low fare pricing is its main advantage against competitors.
Based on the EFE and IFE matrices in the previous chapters, with resultant scores at 2.95 and 2.80 respectively, this IE matrix tells us that our company should hold and maintain its position. The company should pursue strategies focused on increasing market penetration and product/service development.
We have identified two strategies to improve Cebu Pacific. Product and Service Development strategy seeks to increase sales by improving or modifying present products or services. Product and service development strategy usually entails large research and development expenditures. In the service industry, the companies are usually pursuing product development because the costumers are willing to pay more with the high quality of service standards given by the company. Market Development strategy involves actions like targeting promotion and creating alliances in operations.
Our group is proposing to revise the Mission and Vision statement of Cebu Pacific. The revised statement is concise and easier to comprehend. The proposed strategies are Market Development and Product and Service Development. These business strategies are suggested in order for Cebu Pacific remain competitive in the industry and concentrate on the key strategies issues. For Market Development, the group proposes a Marketing Alliance with Banco De Oro. This alliance will handle the refund system for Cebu Pacific and includes a rebate program for BDO credit card holders. Additional Service includes a 10 percent discount on bookings for roundtrip tickets that occur within 24 hours. For Product and Service Development, the group proposes a review training program that focuses on personnel enhancement and website management information system development. In terms of advertising and promotions, Cebu Pacific will continually advertise in newspapers and through the internet. Additional advertisements will be on TV and radio. These are important in order for the company to reach the consumers and effectively disseminate information regarding their service offerings.
Controls will be used to ensure that Cebu Pacific conforms to the requirements of a high quality service and evaluate whether corrective actions are needed to correct problems and maintain stable performance. II. EXTERNAL AUDIT
A. INDUSTRY ANALYSIS
A.1 Philippine Economy
The Philippines weathered the 2008-09 global recessions better than its regional peers, due to lower dependence on exports and higher levels of...