Cathay Pacific is one of the world’s renowned airlines based in Hong Kong and China, founded by Sydney Kantzow and Roy Farrell. Since its inception, the airline has been performing remarkably well, thus the need for focusing on the mystery behind its success. For example, the airline ranked number eight in the year 2012 in terms of profitability out of the companies operating in more than 170 global destinations (Ian, 2013). It is arguable that Cathay’s success bases on its marketing strategy that puts it in a better position compared to the competitors. Therefore, this essay explores the SWOT analysis of the airline with a major focus on its marketing strategy.
Strengths of Cathay’s marketing strategy
The marketing strategy for Cathay possesses strengths that make it highly competitive in the market, such as its focus on both the Chinese and international markets. This strategy is strength since China is the most lucrative airline market in the world being that it possesses an average population of 1.3 billion people. For example, the population offered a ready market that enabled Cathay airline to sustain its operations before gaining stability (Ng & Poon, 2004).
Further, entry into strategic alliances, joint ventures, and code shares is strength to the airline. For example, since its establishment the airline entered into numerous code shares that enabled it to share some of the costs with its partners (Ian, 2013). Entry into the code shares enabled the airline to not only cut down its operating costs, but also increase the customers’ confidence. On the other hand, the strategic alliances enabled the airline to create new opportunities in other markets, as well as simplify its access to new customers and even enhance its brand awareness. For instance, the entry into a joint venture with air China in the year 2010 enabled Cathay’s airline to rapidly, expand its operations, as well as brand awareness (Young, 2012).
Similarly, the use of a differentiation marketing strategy is strength to the airline since it portrays it as a unique brand in the market. For example, the use of the brand name Cathay airline is strength to the airline since it portrays it as the heart of Asia (Wilson, 2010). Similarly, offering quality services enhances the airline’s competitiveness, its brand image and confidence of the customers.
Moreover, the strategy of thinking locally while acting globally is the airline’s strength since it enhances its competitiveness. Local thinking helps the airline to resonate well with the domestic market, while acting globally helps it to offer quality services that meet the international standards (Ng & Poon, 2004). In addition, the use of modern fleets is strength since they market the airline as the best in terms of service delivery across the globe, hence boosting the customers’ confidence. Lastly, conducting numerous advertisements is strength since they enable the airline to create its brand awareness across the globe. The airline invests both in television marketing in the local and international markets, social media, and other online platforms, hence enhancing its competitiveness. Through the utilization of these platforms, the airline has been able to reach out to many markets, thus enhancing its market share (King, 2013).
Despite enjoying numerous strengths, the airline’s marketing strategy has a number of weaknesses including overreliance on the Chinese market. Overreliance on the Chinese market denies the airline’s brand recognition in other potential, markets across the globe (Young, 2012). This strategy may pose major repercussions to the airline in case of an economic recession in China. Further, limited market share resulting from stiff competition is a weakness since it forces the airline to focus on one market, hence low sales. In addition, focusing entirely on the customers belonging to the upper economic class is a weakness to the airline since it is likely to deny it more sales. As such, the airline should have flights suitable for different classes as doing this will enable it to expand its customer base (Ian, 2013).
Cathay airline has numerous opportunities including the rapid technological expansion, and the increasing number of international destinations resulting from the tourism industry’s expansion. The rapid technological advancement is an opportunity since it will enable the airline to adopt modern marketing strategies, such as social media, and many others (Wilson, 2010). Through these approaches, the airline will be able to reach a wide market at low costs compared to the traditional marketing approaches. Further, with the advancement in technology, the firm will be able to invent platforms of communicating and gathering feedback directly from the customers. Consequently, these innovations are likely to enhance service delivery, hence acting as a better marketing tool for the airline (Ng & Poon, 2004). That aside, the escalating number of international destinations resulting from globalization is an opportunity that when adequately tapped can substantially expand the airline’s customer base.
Similarly, the airline faces numerous threats including the entrants of new players in the market who offer quality services at subsidized costs. Thus, if the airline does not pay a closer look at these competitors, it is likely to lose many customers, hence affecting its operations negatively (King, 2013). Apart from competition, the rising costs of labor and fuel pose a threat to Cathay as they may force the airline to increase its service delivery tariffs. The increase may trigger a ripple effect to the operations of the airline, as the competitors offering the services at slightly lower costs may seize some of the customers.
Ian, G. (2013). Cathay Details Fleet Strategy. Hong Kong: Asian Aviation Magazine Ltd.
King, M. (2013). Cathay Pacific Airways Limited SWOT Analysis. Hong Kong: Cathay Pacific
Ng, S. H., & Poon, C. Y. (2004). Business restructuring in Hong Kong: strengths and limits of
post-industrial capitalism. London: Oxford University Press.
Wilson, R. M. (2010). Strategic Marketing Planning. London: Rutledge.
Young, G. (2012). Beyond Lion Rock: The Story of Cathay Pacific Airways. Hong Kong: Faber