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Cathay Pacific’s Value Chain Essay Sample

Cathay Pacific’s Value Chain Pages
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Cathay Pacific believes that their business is selling experience to the passengers. The emotional bonding with the passengers is the key to building loyalty and one of the major factors that encourage the customers to repurchase the airline products. The biggest difference of Cathay Pacific to its competitors is its people. The employees at Cathay Pacific are the ones who bridge the gap between product development and customer expectation. The passengers in Cathay Pacific always feel welcomed, appreciated and reassured. Passengers that travel with Cathay Pacific know that they are in good hands. Service Straight from the Heart is a programme that aims to develop cultural change within the airline focused on improving customer service. Service is the principal means of differentiating between airlines and is highly influential in customer choice. Cathay Pacific has expressed within its programme its understanding of the importance of the people within the organization and its recognition of the contribution of those people to its success. Cathay Pacific provides excellent customer service by: 1. Creating a climate for positive behaviour

Cathay Pacific’s corporate culture instils in the employees the understanding of the company’s big picture. The corporate culture that the company has encourages innovation, constant improvement and personal responsibility. The service philosophy of Cathay Pacific – Service Straight from the Heart, encourages the employees to render quality service with human touch 2. Recruiting the right people and offering proper Training

Cathay Pacific uses a holistic approach for managing its people. Better understanding and continuous learning are achieved by involving the staff in the job rotation scheme. Each employee in Cathay Pacific is a flag bearer of the company. Every member of the Cathay Pacific family can represent the whole company 3. Continuous Improvement

Cathay Pacific always bears a sense of urgency and crises. Present successes are not allowed to create complacency. Cathay Pacific absorbs any good ideas from different companies, governments or organizations

Service
More and more corporations throughout the world are adding value to their core corporate offerings through services. Modern corporations are increasingly offering fuller market packages of consumer focused combinations of goods, services, support, self-service, and knowledge. Cathay Pacific’s goal is to deliver superior service and value to its customers and to become the world’s most admired airline. The organization recognizes that the quality of service sets it apart from its competitors. The organization is committed to meeting on-time performance goals, maintaining and growing international route network, and increasing flight frequencies to meet market demand. Cathay Pacific strives to deliver Service Straight from the Heart and takes pride in making its customers feel safe, welcome, comfortable and above all, reassured. Cathay Pacific anticipates the customers’ needs and aims not just to meet, but surpass their expectations. Cathay Pacific go beyond ensuring satisfaction in order to strengthen customer loyalty and enhance the profitability of the airline (Cathay Pacific Annual Report 2006). Cathay Pacific uses Differentiation as its target market positioning strategy.

According to Proctor (2000), a differentiation strategy is one where wide product ranges and higher quality products are offered for the convenience of customers as well as added services. A differentiation strategy in which a product offering is different forms that of one or more competitors in a way that is valued by the customers. The emergence of cheap long-haul airlines does not bother Cathay Pacific Airways. The company maintains that they cater to a different market which values service and product features more than price. Cathay Pacific offers quality service and luxurious features and amenities. Interior layout and configuration of the aircraft is one of the considerations of Cathay Pacific’s passengers. Space is considered as the key comfort variable. Another important offering of Cathay Pacific that sets it apart from its competition is its high in-flight service and catering standards.

In flight service and catering standards according to Doganis (2002), cover the nature and quality of food and beverages provided, the number of cabin staff for each class of cabin, the availability and range of newspapers and magazines, in-flight entertainment and communications, give-aways for passengers as well as for children and so on. Cathay Pacific exerts a great deal of effort to the planning of airline meals and meeting target catering standards. Another competitive advantage of Cathay Pacific is the services offered to passengers on the ground. Cathay Pacific’s super hub at Hong Kong International Airport offers a wide range of services and benefits aimed at making the passengers’ arrival, departure and connections as smooth, convenient and pleasurable as possible. Other intangible aspects of comfort and source of differentiation that Cathay Pacific is offering are efficiency, helpfulness and friendliness of staff, both the cabin crew in the air and the ground staff at check-in, in the airline lounges and at the boarding gates.

Technology Development
Cathay Pacific become Asia’s leading e-business airline by implementing ambiguous strategy and fully harnessing state-of-the-art technology. The company is determined to provide their customers and business partners with greater ease and convenience, as well as to create new business opportunities for business growth and to enhance efficiency and economic benefits. The company has unveiled a series of e-business initiatives in the areas of passengers, cargo, procurement and internal procedures. For example, Cathay Pacific was the world’s first airline to offer an online air ticket auction in late 2000, allowing frequent flyer members of its Marco Polo Club and Asia Miles program to bid for exciting offers through the Web site. Another innovative service was introduced by Cathay Pacific in January of 2001, this is the comprehensive Online Check-in Service, which allows passenger to check in for flights and reserve their favourite seat by using the Internet.

Today, Cathay pacific is the leading Airline Company in Asia, and respected around the world. Cathay Pacific Airways is known for its leadership in the adoption of new technologies. The airline was the first in the world to announce plans to install in-flight e-mail, the first to link Airbus aircraft to its maintenance centres electronically, and the first in the world to auction air tickets online. Cathay Pacific also invested over $250 million in e-business as part of its plan to become Asia’s leading e-business airline. A key element in this strategy was the development of a company-wide e-learning environment that Cathay Pacific calls Learners World. Cathay Pacific made rapid progress towards its aim of becoming Asia’s leading e-Business airline. The passengers enjoy state of the art services throughout their journey. Among the technologies that Cathay Pacific introduced in order to enhance passenger experience are: 1. Online Check-in

Passengers can check in and select their seats on Cathay Pacific flights from the comfort of their home with the airline’s comprehensive Online Check-In service from 48 hours up to 90 minutes before departure. 2. NotiFly

By registering for Cathay Pacific notiFLY Paging service, travellers can have the latest flight information sent directly to them via mobile phone or email account. They can also check the latest flight status on Cathay Pacific’ website。 3. Airport Lounges

Cathay Pacific’s luxurious airport lounges in Hong Kong offer free internet access and wireless Internet access for travellers with laptop computers. Desktop computers at The Wing are installed with broadband, high speed internet access. These facilities have been introduced at Cathay Pacific lounges around the world (Cathay Pacific Annual Report 2000). 4. In-flight E-mail System

With Cathay Pacific’s in-flight email system, passengers are able to send and receive emails on board using their lap top computers. Passengers are able to surf net. In-seat power keeps laptop batteries charged throughout the flight. Technology refers to the employment of mechanical means especially scientific and computer related, to perform tasks and manage information (Davenport 1999). Cathay Pacific has decided to Internet-enable its entire global business operations. This advancement in technology is expected to provide a global internet platform for Cathay Pacific’s e-business applications in the future. The new internetworking infrastructure that Cathay Pacific uses will provide a cost-effective platform with global connectivity. The infrastructure will also support the company’s e-business strategy and will make Cathay Pacific the major e-business airline in Asia.

The new technological advancement will initiate the company’s development and deployment of e-business initiatives that will improve the quality of passenger services and increase its efficiency and effectiveness. Cathay Pacific uses the power of the internet to reduce communication costs and increase the flexibility of its operations. The delivery of supporting technology across Cathay Pacific has been improved by a more adequate IT infrastructure.

Human Resource Management
Human resources or human capital is the intangible resources of abilities, effort, and time that workers bring to invest in their work (Davenport 1999). The people at Cathay Pacific are the major contributors of strategic capability to the company. One of the advantages of Cathay Pacific over its competitors is the quality of service that the staff provide to its customers. Service has a big impact on the customers’ perceptions about the company’s product. Because of the importance of its people, Cathay pacific formulated an employee development strategy through proper and effective training. This strategy is expected to strengthen Cathay Pacific’s position in the marketplace. Employee development can be an essential ingredient of an organization’s competitive advantage.

Employee development includes all of the education and training that organizations might invest in their employees such as training employees to perform effectively in their current jobs, orienting employees to the workplace, developing them for advanced positions or programs, and building organizational capability for future success. Cathay Pacific promotes a working environment wherein the employees are free to act in both the company’s and passengers’ best interests. One of the keys to successful competition in the global market is the effective deployment of human resources to achieve strategic capability and competitive advantage. Human resources as an internal resource of a firm are one of the sources of strategic capability. Human resources are among the top contributors to Cathay Pacific’s strategic capability. Effective management of an organization’s human resources according to Sims (2002) is a major source of competitive advantage and may even be the single most important determinant of an organization’s performance over the long term.

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