Aviation Strategy and Planning
Analysis of a Chinese Aviation-related Company using the Five Forces Framework
Student Name: Tam Hon Yi
Student ID: 54076675
Table of Contents
2. Analytical Framework
3. Analysis and Interpretation
4. Conclusion and Recommendation
A. List of References
Airline industry is a part of Aviation industry. It facilitates world trade, tourism, and world economy growth, etc. It can deliver the people and goods in short time by using the modern technology. The airline industry has some competitive advantages than other forms of travel, such as railway and trucks. The airplane can deliver a large quantity of goods in short time without the traffic problems. In the past few years, the number of passengers for travel has increased every year. Not only for the leisure purpose, but also the businesses travel increased as well. The main market of air travel will be in Europe, North America and Asia in the future. The air travel market still growing in Asia, and most of the travelers came from Greater China. The Greater China occupies the largest air travel market in Asia. Hong Kong is a major international and regional aviation center in China. Many Greater China travelers transit in Hong Kong to different countries. Hong Kong International Airport is one of the busiest airports in the world, the world’s major airlines have flights to Hong Kong every day. There are only few airlines in Hong Kong, like Dragonair, Hong Kong Express Airways, Hong Kong Airlines and Cathay Pacific Airways. The flight route of Dragonair is usually between different countries in Asia. 47 destinations operated by Dargonair, which is 22 destinations are from Hong Kong to mainland China. It has total 41 aircrafts, they are all from Airbus, which is including A320 and A330. Hong Kong Express is a low cost company, it provides the low cost tickets for customer to choose. It has total 9 fleets of A320 to provide service. The destinations and target customer are similar to Dragonair which is provided the service in Asia, including Korea, Japan, Taiwan, etc. Hong Kong Airline provide cargo and passenger service between Hong Kong, Great China and Southeast Asia, which is including Korea, Beijing and Japan. It has total 24 fleets in servicing, including 5 cargos. Cathay Pacific provides international flight service, rather than other three airlines in Hong Kong. It is not only operates the passenger service, but also the cargo service as well. There are over 170 destinations in 40 countries that provided services by Cathay Pacific, which is operated by 174 fleets of the aircraft. Cathay Pacific is the third largest airline in the world, which is measured by the market capitalization. It won the reward of best airline in the world for four times, more than the other airlines. It has become the largest international cargo airline in the world either in 2010.
2. Analytical Framework
The threat of entry is depend on barriers to entry, such as legislation or government action, customer or supplier loyalty, etc. The entry barriers are factors that need to be endure by new entrants if they to compete successfully. The barriers to entry do provide interesting challenges to new and incumbent organizations, including start-up economics and the speculative nature of the industry. A substitute product is a product in one industry that can be substituted for a product in different industry. If there is an available substitute product, the competitive pressure can be increase. In the aviation industry, the potential threats of substitution include video conferencing, e-mails and road transportation. Buyer or customer power is related to the number of customers the organization has and the existence of “switching cost”. The buyer or customer power is high where the switching cost is low. In the aviation industry, the corporate deal and travel agents...
References: Cathay Pacific. 2015. Sustainable development. [ONLINE] Available at:http://www.cathaypacific.com/cx/en_HK.html. [Accessed 06 March 15].
Georges. U , 2012. Five forces analysis of the airline business. Strategic Management, 2, 6.
Cathay Pacific. 2015. History. [ONLINE] Available at: http://www.cathaypacific.com/cx/en_HK/about-us/about-our-airline/history.html. [Accessed 06 March 15].
Cathay Pacific. 2015. Fleet. [ONLINE] Available at: http://www.cathaypacific.com/cx/en_HK/about-us/about-our-airline/fleet.html. [Accessed 06 March 15].
Cathay Pacific. 2015. Awards / Honours. [ONLINE] Available at:http://www.cathaypacific.com/cx/en_HK/about-us/about-our-airline/awards-honours.html. [Accessed 06 March 15].
Cathay Pacific. 2015. Alliance and partnerships. [ONLINE] Available at:http://www.cathaypacific.com/cx/en_HK/about-us/about-our-airline/alliance-and-partnerships.html. [Accessed 07 March 15].
HK Express. 2015. Information. [ONLINE] Available at: http://www.hkexpress.com/en-us/aboutus/ourstory.aspx. [Accessed 06 March 15].
Dragonair. 2015. Introduction. [ONLINE] Available at: http://www.dragonair.com/ka/en_HK/about-us/about-our-airline/introduction.html. [Accessed 06 March 15].
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