I. STRATEGY RECOMMENDATION
A. Primary Strategies
Under Market Penetration
1.) Effective Advertisements will be made for the Cebu Pacific in the TV and Radio Ads, Print Newspapers (such as The Manila Bulletin and The Philippine Star) and Magazines.
2.) Establishment of Research and Development (R&D) Unit:
R&D has a special economic significance apart from its conventional association with scientific and technological development. R&D investment generally reflects a government’s or organization’s willingness to forgo current operations or profit to improve future performance or returns, and its abilities to conduct research and development.
Research and Development Department is of great importance in business as the level of competition, production processes and methods are rapidly increasing. It is of special importance in the field of Marketing where companies keep an eagle eye on competitors and customers in order to keep pace with modern trends and analyze the needs, demands and desires of their customers.
We will establish a research and development unit in Cebu Pacific so that the company will have a department that is concern with the monitoring of the company and as well as competitors’ performance.
3.) Improvement of Quality Standard Services
This means by providing the best attention to the customer and addressing his or her needs or the company’s need. The service that is going to be given to them by must be excellent.
In our continuous quest for excellence, it is our ongoing commitment to provide a “Customer Comes First” philosophy. We strongly believe that the products and services we are providing to the customers must be of the highest levels of International Standards and Quality. Our dedication and commitment to them is of utmost importance to us.
In providing a Total Management and Staff Commitment to Quality, we are continuing to strive to better ourselves and services through a process of self-auditing, corrective action, external checks and by educating and training our work force in the latest work methods and procedures. We accomplish this through the regular monitoring and checking of critical control points during a production process to ensure that the required Quality standard is always achieved.
We are into quality and it is our goal to provide the highest quality of services presented and delivered to the exact specifications of our customers, by maintaining the utmost levels of customer satisfaction. Once our hotel is appreciated, we will continue to maintain this high level of commitment, by providing the optimum level of service and assistance whenever and wherever needed.
B. Secondary Strategies
Under Horizontal Integration
1.) Merge with other Airlines such as Zest Air
In microeconomics and strategic management, the term horizontal integration describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets. Horizontal integration in marketing is much more common than vertical integration in production. Horizontal integration occurs when a firm in the same industry and in the same stage of production is being taken-over or merged with/by another firm which is in the same industry and in the same stage of production as of with the merged firm.
Cebu Pacific has a good financial position therefore; it has the capacity to merge with another hotel company in the industry. Zest Air will be the merge company of Cebu Pacific. With these two great entities, it would be possible for both companies to compete not only in the Philippine industry but also with the other foreign countries as well.
2.) Plan for Market Expansion
A term that is closely related with horizontal integration is market expansion. This is the expansion of a firm within an industry which it is already active; the purpose is to increase its share of the market for a particular product or service.
Since the Cebu Pacific has good financial position, it can create another branch or possible for branching out in the different parts of the country in which tourists are more abundant like tourist or vacation spots. We would like to add more routes like in South Asia and in Middle East.
C. Other Strategies
1.) Renovation of Cebu Pacific facilities to a more modern and futuristic style
New facilities design and development is more than often a crucial factor in the survival of a company. In an industry that is fast changing, firms must continually revise their design and range of facilities. This is necessary due to continuous technology change and development as well as other competitors and the changing preference of customers. A system driven by marketing is one that puts the customer needs first, and only produces services that are known to customers. Market research is carried out, which establishes what is needed. If the development is technology driven then it is a matter of changing what it is possible to make. The facilities are developed so that hotel processes are as efficient as possible and the services are technically superior, hence possessing a natural advantage in the market place.
2.) Re-design of Employees Uniform especially Flight Attendants
A subtle interplay of colour, denim-like elements in pieces that can be mixed and matched: all connoting fun, comfort and relaxation – This is Cebu Pacific’s uniform for Cabin crew. They wanted uniforms to be consistent with the airline’s personality. The design was pretty, playful, distinctly Cebu Pacific, at the same time, functional and non-restrictive to the wearer. It is also making passengers feel comfortable and at ease with their flight attendants. However, it would be most proper if their cabin crew’s uniform will shift to a formal one. It will make their passengers feel like they’re kings and queens, like a royal-blooded man for short. This strategy, if done, will bounce back to the Airline’s reputation as a very fine, unique and elegant company.
Base on our rigorous research and calculations we have chosen the Market penetration as our primary strategy and as for our secondary strategy, we have chosen the Horizontal Integration.
Market Penetration strategy seeks to increase market share for present products or services in present markets through greater marketing efforts. This strategy is widely used alone and in combination with other strategies. Market strategies include increasing the number of salespersons, increasing advertising expenditures, offering extensive sales promotion items, or increasing publicity efforts.
The actions that we will apply to penetrate the market is to have an intensive promotional publicity stunt and TV commercials for Technological factors like high tech facilities and fleets.
Horizontal Integration refers to a strategy of seeking ownership of or increased control over a firm’s competitors. It is a strategy used by a business or corporation that seeks to sell a type of product or services in numerous markets. Horizontal integration occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm.
The action that we will apply to increase control over other competitors is to merge with other hotels. With financial position of Cebu Pacific, it has the capacity to merge with other hotels and still be able to take control.
Strategic Management: Concepts and Cases 12th Edition by Fred R. David
I. APPENDIX Cebu Pacific Airlines Operation Centre
Cebu Pacific Airlines Operation Centre