To Move or Not to Move: Cathay Pacific Airways SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of To Move or Not to Move: Cathay Pacific Airways
Cathay Pacific's Data Centre, located in Hong Kong, had experienced an explosion and fire that disrupted normal business for 13 hours. In the search for a more secure location, the problems with finding suitable offices in Hong Kong were highlighted, while the benefits and advantages offered by other countries presented the company with the option of relocating the data center offshore.
Authors :: Ali F. Farhoomand, Pauline Ng, Loretta Tsang
Swot Analysis of "To Move or Not to Move: Cathay Pacific Airways" written by Ali F. Farhoomand, Pauline Ng, Loretta Tsang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cathay Kong facing as an external strategic factors. Some of the topics covered in To Move or Not to Move: Cathay Pacific Airways case study are - Strategic Management Strategies, Operations management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the To Move or Not to Move: Cathay Pacific Airways casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, technology disruption, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of To Move or Not to Move: Cathay Pacific Airways
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in To Move or Not to Move: Cathay Pacific Airways case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cathay Kong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cathay Kong operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of To Move or Not to Move: Cathay Pacific Airways can be done for the following purposes –
1. Strategic planning using facts provided in To Move or Not to Move: Cathay Pacific Airways case study
2. Improving business portfolio management of Cathay Kong
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cathay Kong
Strengths To Move or Not to Move: Cathay Pacific Airways | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cathay Kong in To Move or Not to Move: Cathay Pacific Airways Harvard Business Review case study are -
Organizational Resilience of Cathay Kong
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cathay Kong does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Cathay Kong has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
High brand equity
– Cathay Kong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cathay Kong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Cathay Kong has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study To Move or Not to Move: Cathay Pacific Airways - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Cathay Kong has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cathay Kong has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Strategy & Execution field
– Cathay Kong is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cathay Kong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Cathay Kong is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Cathay Kong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in To Move or Not to Move: Cathay Pacific Airways Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Cathay Kong is one of the leading recruiters in the industry. Managers in the To Move or Not to Move: Cathay Pacific Airways are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Cathay Kong are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Cathay Kong is one of the most innovative firm in sector. Manager in To Move or Not to Move: Cathay Pacific Airways Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– To Move or Not to Move: Cathay Pacific Airways firm has clearly differentiated products in the market place. This has enabled Cathay Kong to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Cathay Kong to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Cathay Kong in the sector have low bargaining power. To Move or Not to Move: Cathay Pacific Airways has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cathay Kong to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses To Move or Not to Move: Cathay Pacific Airways | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of To Move or Not to Move: Cathay Pacific Airways are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cathay Kong supply chain. Even after few cautionary changes mentioned in the HBR case study - To Move or Not to Move: Cathay Pacific Airways, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cathay Kong vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study To Move or Not to Move: Cathay Pacific Airways that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case To Move or Not to Move: Cathay Pacific Airways can leverage the sales team experience to cultivate customer relationships as Cathay Kong is planning to shift buying processes online.
High cash cycle compare to competitors
Cathay Kong has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Cathay Kong, firm in the HBR case study To Move or Not to Move: Cathay Pacific Airways needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the To Move or Not to Move: Cathay Pacific Airways HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cathay Kong has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Cathay Kong has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Cathay Kong has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - To Move or Not to Move: Cathay Pacific Airways should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study To Move or Not to Move: Cathay Pacific Airways, in the dynamic environment Cathay Kong has struggled to respond to the nimble upstart competition. Cathay Kong has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Cathay Kong needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Cathay Kong has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali F. Farhoomand, Pauline Ng, Loretta Tsang suggests that, Cathay Kong is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities To Move or Not to Move: Cathay Pacific Airways | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study To Move or Not to Move: Cathay Pacific Airways are -
Buying journey improvements
– Cathay Kong can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. To Move or Not to Move: Cathay Pacific Airways suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cathay Kong in the consumer business. Now Cathay Kong can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cathay Kong to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Loyalty marketing
– Cathay Kong has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Cathay Kong can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Cathay Kong can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Cathay Kong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cathay Kong can use these opportunities to build new business models that can help the communities that Cathay Kong operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Cathay Kong can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cathay Kong to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Cathay Kong to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Cathay Kong has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study To Move or Not to Move: Cathay Pacific Airways - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cathay Kong to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cathay Kong in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cathay Kong can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, To Move or Not to Move: Cathay Pacific Airways, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats To Move or Not to Move: Cathay Pacific Airways External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study To Move or Not to Move: Cathay Pacific Airways are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cathay Kong business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Cathay Kong needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Cathay Kong can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Cathay Kong is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Cathay Kong high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Cathay Kong
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Cathay Kong.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cathay Kong.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cathay Kong can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study To Move or Not to Move: Cathay Pacific Airways .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Cathay Kong needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study To Move or Not to Move: Cathay Pacific Airways, Cathay Kong may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Cathay Kong will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Cathay Kong needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Cathay Kong can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cathay Kong in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of To Move or Not to Move: Cathay Pacific Airways Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study To Move or Not to Move: Cathay Pacific Airways needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study To Move or Not to Move: Cathay Pacific Airways is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study To Move or Not to Move: Cathay Pacific Airways is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of To Move or Not to Move: Cathay Pacific Airways is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Cathay Kong needs to make to build a sustainable competitive advantage.