Strategic Analysis for Cathay Pacific Airways - Dissertation Example

Cathay Pacific, during the global financial crisis in late 2008 and 2009, has incurred a record high of $ 7 billion loss (Cathay Pacific 2010). This is the first time that the company has ever experienced such a huge loss. However, by 2010, the company has reached an all time high of $14 billion profit (Cathay Pacific 2010). Although this turnaround is attributed to the continued growth and strong performance of the China’s economy, what Cathay Pacific shows is astonishing since the airline business, fundamentally, involves heavy investments, but relatively slow return on investments.

Yet, Cathay Pacific has gained monumental profit during difficult economic times. In this sense, by looking into Cathay Pacific’s approach and strategy as the company surmounts the hurdle of the global financial crisis with excellent profit, one can learn from their experience as it provides a paradigm that can be used by most companies who are still reeling from the impact of the recent global financial crisis. In this regard, Cathay Pacific strategic management offers alternative frames that can be useful for companies as they address the challenges and impact of the first global economic crisis of the 21st century. 1.1.

Background of the Study The airline industry is one of the most dynamic and robust business sectors in the world (Meersman, Van de Voorde & Vanelslander 2008). Its business cycle is consists of ups and downs that continues to modify and restructure the demands and framework of the airline industry market (Uncles & Goh 2002). In this regard, it is significant to understand the important factors contributing to the robust nature of the airline industry. In addition, by looking into the elements modifying the structure of the industry, the approaches develop by the companies not only becomes contextualise, but it also affords the chance to apprehend what is the basic condition of the airline industry.

One of the most important factors affecting not only the airline industry but all businesses and countries around the world is globalisation. Globalisation is the removal of trade barriers existing among nations. With this economic policy adopted by most countries around the world the movement of goods, capital, services, products, culture and people has become freer flowing, thus allowing for exchanges to happen (Coatsworth 2004; Fougner 2006; Munck 2008). In effect, eco0nomic policies of governments have shifted from