Strategic Change Management Assessment Answer at University College Birmingham

Introduction:

Cebu Pacific is an airline based in the Philippines. They are currently operating flights to international destinations across 14 countries including China, Australia, Singapore, Japan, and the United Arab Emirates. Furthermore, they also operate flights to over 60 domestic destinations. In addition to that, they provide fast, straightforward, and competitive air cargo services to an expanded network of cargo agents and individual shippers in the Philippines. Furthermore, it is the only airline that operates a 100% brand new fleet of around 8 ATR 72-500 aircraft and 33 Airbus in the Philippines.

Strategic Option:

Internal audit:

Figure 1: BCG Matrix

Introduction:

The Boston Consulting Group Matrix provides a strategy where the market share and growth rate of a product or service are considered and analyzed for offering insights on the potential products that are best in helping the organizations capitalize on market growth and share opportunities and giving them a competitive advantage. The BCG Matrix identifies four quadrants of Cebu Pacific Airlines.

Discussion:

The Star in Cebu Pacific Airlines is the Strategic Business Unit of Financial Services. This Business unit operates in the future potential market. The SBU is the core area that generates profit and has the potential to generate more if the Airlines get integrated with other firms in the supply chain. The Brand Strategic Business Unit is also a Star quadrant.

Cash Cow in Cebu Pacific Airlines is the Supplier Management Service Strategic Business Unit. This is a strong manager area that has been generating profits over decades. The market share is high of Cebu Pacific, but the market growth is reducing as the organizations manage their suppliers by themselves instead of outsourcing them.

The Dog quadrant of Cebu Pacific Airlines is their Strategic Business Unit of plastic bags. In this SBU has been facing loss over the past 5 years. Greater environmental concerns are at the core of the loss of this in the market. The synthetic fiber products SBU is also a Dog quadrant. The market for this product is constantly declining. The airline is facing a loss for this in the past 3 years. It has a market share of less than 5%.

The Question Mark quadrant of Cebu Pacific Airlines is the local foods Strategic Business Unit. According to the present trends, consumers are more into local foods. Hence there is a high market growth rate. On the other hand, a low market share can be seen in this segment of Cebu Pacific Airlines. The confectionery SBU is also a Question Mark quadrant. The airline has a low market share on it even though the market growth is attractive. Poor distribution and failure to reach all over, are the main cause of low sales of Cebu Pacific Airlines in this segment.

Conclusion:

After analyzing the Business Unit of Cebu Pacific Airlines by utilizing BCG Matrix, it has been shown that Cebu Pacific Airlines needs to work on its Cash Cow product. They also need to implement more strategies, innovation, and creativity to turn their Dog quadrants into Cash Cow products. They need to develop more research and take more initiative that will be fruitful to them (Cebupacific Air, 2023)

The Socio-cultural, political, and environmental perspectives in micro and macro external context of Cebu Pacific Airlines:

Political: Government stability and Favourable tax rates and government subsidies act as a backbone of Cebu Airlines to be a strong competitor in the marketplace.

Social: The products and services they provide attract the younger population as well as parents to purchase from them and become loyal consumers.

Environmental: Cebu Pacific Airlines is promoting sustainable business for the well-being of the environment.

Introduction:

To have contextual knowledge of the brand positioning, business direction, risk, productivity, and growth targets, the analysis of the external factors like political, socio-cultural, environmental, etc. that affect organizational growth in the micro as well as the macro environment becomes necessary. For this reason, analyzing the political, socio-cultural, and environmental perspectives is necessary for Cebu Pacific Airlines.

Discussion:

Political:

Cebu Pacific Airlines has strong institutional support as well as political structures that promote its development and growth. The political stability helps Cebu Pacific Airlines to maintain trade relationships among the overseas business affiliations bias-free. The government stability allows Cebu Pacific Airlines to establish its business internationally as well as regionally.

Socio-cultural:

The Airline is a low-cost airline, allowing the younger population to travel across regional and international destinations at a low price. The higher educational rate allows Cebu Pacific Airlines to get more potential employees. Higher education also provides customers that are aware of the value provided by their purchase and their consumption patterns. Family structure and size also affect the amount of purchase. The products are featured with healthcare strategies regarding behavioral assessments as well as consumer research.

Environmental perspectives:

Currently, Cebu Pacific Airlines is enhancing its focus on promoting sustainability and is taking the initiative to incorporate recycling into its business. This will ensure environmental sustainability and the pollution rate will be reduced. They also adapted waste management strategies as the country has rules and regulations for controlling and managing waste. Renewable energy resources are also utilized within the whole business procedure.

Conclusion:

After analyzing the political, Socio-cultural, and environmental perspectives of Cebu Pacific Airlines, it can be seen that they are fulfilling their responsibilities and also expanding worldwide for the growth of the organization as well as the country. This analysis will enable the readers to have detailed knowledge of the responsibilities as well as the insight that Cebu Pacific Airlines has.

Porter’s Five Forces framework:

• Cebu Pacific Airlines avoids the threat of new entrants by providing quality products and services at low cost.
• The airlines have prices according to their products and services. Cebu Pacific Airlines provides services that are lower in cost in comparison to other airlines. The customer gets the opportunity to bargain by comparing it online.

Figure 2: Porter's Five Forces

Introduction:

Porter’s five force framework is utilized here to identify the threat of new entrants into the marketplace as the competitors of Cebu Pacific Airlines as well as how they deal with it. The other factor is whether the customers have bargaining power or not, if yes then what initiative Cebu Pacific has taken to deal with it will be discussed below.

Discussion:

Competition in the industry is considered a strong force. It is a significantly high-investment business. For this reason, there are fewer potential threats of new entrants into the industry. This industry also has requirements for long-term agreements as well as commitments within the region as well as overseas. All organizations have a slightly different profit or loss generation according to the products and services they provide. Furthermore, Cebu Pacific Airlines provides quality services at a low price so consumers tend to purchase from them to travel within the region as well as overseas. The bargaining power of the consumers are strong force. As the airlines provide the facilities of purchasing tickets online including the distribution of them, consumers can have a better look and they can compare the fares and schedules online to make economical decisions. Cebu Pacific Airlines provides low-cost aircraft and cargo that has enhanced the bargaining power of the consumers.

Conclusion:

After utilizing Porter’s five forces in Cebu Pacific Airlines, it can be seen that both of the above-mentioned points are considered strong forces. This information will help the readers to understand the factors that affect the aviation industry to expand business.

Strategic Options

Strength	Weakness
Low fare but great value flights. Strong communication between customer and organization.	There are not enough international flights. Lack of initiatives to form more international routes.
Opportunity	Threat
Potential international marketplace. Potential customers willing to travel international places all around the world	Each year the government renews the rules and regulations. High cost of numerals functions, health consciousness, and awareness trends, customer requirements and existing rivalry, etc.

Introduction:

SWOT analysis of Cebu Pacific Airlines enables one to have an insight into the organization's strengths, weaknesses, opportunities, and threats that are necessary to be aware of.

Discussion:

As Cebu Pacific Airlines offers low-fare services, the consumers find this airline more budget-friendly. The airlines also offer quality products and services to the customers so that they are satisfied after purchasing and experiencing them. The airlines provide a 24/7 helpline on their website and other digital platforms so that customers stay connected to them. This maintains a healthy relationship between the organization and consumers.

The Airlines have a lack of interest to expand the business into other destinations of the world except the existing ones. There are not enough flights or routes overseas. They tend to focus more on offering regional flights within the Philippines. The potential customers who are willing to travel internationally are often neglected by the Airlines. There is a potential marketplace for international destinations. Places where tourists visit frequently are the potential marketplace to expand the business. If the airlines expand into this marketplace more customers will be interested in purchasing services and ultimately generate huge profit for the airlines. The potential threats are the existing rivalries, new rules, and regulations regarding the business of the government within the country as well as overseas, increasing cost of resources, etc. The organization needs to observe them and adapt relevant strategies to deal with them.

Conclusion:

After reviewing the SWOT analysis, it is observed that like other business industries, Cebu Pacific Airlines also has specific strengths, weaknesses, opportunities, and threats. To grow in the market, they need to focus on these and implement strategies and skilled Business Units. This analysis will enable the readers to generate innovative ideas to deal with problems and take advantage of opportunities in business.

SWOT into TOWS analysis:

• To capitalize on the opportunities in the market the utilisation of strength by Cebu Pacific Airlines is an effective approach.
• To utilize the opportunities, it is important to work on weaknesses that the airlines have.
• To mitigate the threats Cebu Pacific Airlines can imply their strength as an effective approach.
• Threats can also be avoided by working on the weaknesses.

Introduction:

TOWS analysis is the next step of SWOT. It identifies the actions according to the findings of the SWOT analysis.

Discussion:

Strengths and opportunities:

Using the low-fare but great-value strategy and developing the airline's network into international destinations that are tourist destinations can be an effective means to expand the business.

The connection between Customers and the organization can be helpful in the future development of products and services to attract more customers (Cebupacific Air, 2023).

Weaknesses and opportunities:

The weaknesses can also exist in internal management. Implementing certain rules and policies can help to eradicate non-professional activities and dishonesty among employees so that more opportunities can be attempted. To remove weaknesses, the airlines need to give importance to the opportunity of establishing an airline network in international destinations.

Strength and threats:

To deal with potential threats, the airlines must utilize their strengths like using the connection with the consumers to get their feedback and remove queries related to their products and services. Furthermore maintaining their quality of services and also providing low fares great value to the customers can make long-term benefits for the organization (Benzaghta, et al., 2021).

Weaknesses and threats:

Working on weaknesses is like focusing on product development and quality, which can reduce the threats of rivals overtaking the number of consumers. Mitigate the possibilities of customer retention by providing quality products at a low cost.

Conclusion:

The findings of the discussion support the fact that SWOT and TWOS analysis are important as they identify the facts as well as determine the action or initiatives to deal with each factor that is necessary for Cebu Pacific Airlines to stay a strong competitor in the market. The readers will learn how to maintain their position in a market regardless of their weaknesses and in the presence of threats.

Ansoff Matrix:

Market Penetration: The market penetration of Cebu Pacific Airlines has been determined by the amount of products and services consumed by the targeted customers in comparison to the expected or total market for the products and services.

 Market expansion: It is a growth strategy that ensures the availability of services and products in a new marketplace where the present products and services are getting out of stock.

Product development: It refers to product management. It includes newly formed or designed product and services and their marketing, concepts, design, and development.

 Diversification: It is introducing a new product line into the supply chain to generate more profit.

Introduction:

Ansoff Matrix is utilized to categorize the options presented in the TWOS analysis of Cebu Pacific Airlines.

Discussion:

The options to expand the business of Cebu Pacific Airlines fall into the hybrid categories of the four strategies. The first option falls into the Market Penetration, Market Expansion, Product development, and Diversification categories as the airlines have the opportunity to expand their business into international tourist destinations where they can generate more profit. In addition to that they can renew existing products and services, launch new productlines according to the requirements of the international population, perform sustainability by utilizing sustainable resources, and increase employment by recruiting skilled and potential employees, etc. within the area.

Conclusion:

The Ansoff matrix and its four marketing strategies categorize the business options in such a way that the utilization of the opportunities available in international markets is easy to strategize. This will help Cebu Pacific Airlines to develop strategies to expand and adjust into the international marketplace. This will enable the readers to know the strategies to penetrate, expand, development of products and diversification is necessary to expand the business.

Evaluation of the Options:

Based on the TOWS and BCG findings, two options are using the strength of low-cost great value to generate more customers and the Question quadrant to turn into a Cash Cow quadrant.

The SAF framework:

• Suitability is for a specific solution that is considered appropriate for the problem at hand.
• Acceptability is for considering the solution whether or not acceptable to the people who will be affected by it.
• Feasibility means whether the solution is rational and possible for implementation regarding the given constraints and resources in hand.

Introduction:

The evaluation of the two options mentioned above by utilizing the SAF framework is helpful to have more clarity about the implementation of the strategies (Benzaghta, et al., 2021).

Discussion:

According to the findings of the TOWS Matrix, strengths can be easily utilized as an effective means to perform opportunities in business. Suitability will be determined by analyzing the overall effectiveness of the strategies and how well they go with the external as well as internal environment. This can be by utilizing another matrix like TOWS, Shell Directional Policy Matrix, etc. that can provide robust information help justify the strategic choice that is recommended. Acceptability is a unit of performance measures that are mostly financial, for example, the return and risk of a recommended strategy. But it also covers a wide range of Innovation, learning, marketing, and operational measures, gathered via the dashboard System. This can meet the expectations of the authorities or investors that are affected while implementing the strategies into the Airlines. Feasibility is like rationality of the possible matters attached to capabilities as well as resources. It asks the question, “Is the organization capable of investing that much of finances, is that much skill and human resources available to deliver the strategies, recommended to enhance the growth of the organization?”

Conclusion:

After analyzing the SAF framework, it has been found that choosing an appropriate strategy is a crucial task to perform. To do so the suitability, acceptability, and feasibility needed to be considered against the strategies recommended to Cebu Pacific Airlines. This will help the readers learn how to choose more appropriate strategies for future implementation regarding the areas of concern in business.

The justified choice:

The star quadrant of Cebu Pacific Airlines generates a significant profit. Cebu Pacific Airlines needed to implement strategies to get integrated with other firms in the supply chain to generate more profit in this segment. They also need to implement strategies that enhance the development of innovative features of their existing as well as new product lines. This can successfully generate more customers. The Cash Cow is the SBU of supplier management where they can develop strategies not to invest more into this SBU for a period it generates profit. The airlines also need to adapt strategies to eradicate the cause of loss that the dog quadrant generates by divesting into it and minimizing the losses. The organization also needed to implement strategies to reduce loss from dog products by taking means to turn them into Cash Cow products. The strategy that the airlines needed to adopt for its Question quadrant is to account for a Specific Business Unit and invest in development and research that will enable them to have innovative features turning it into the Cash Cow quadrant in to end (Benzaghta, et al., 2021).

It has been shown by analyzing the Socio-cultural, political, and environmental perspectives of the airlines that government stability is crucial to do business within the region as well as in international markets. They need to have proper promotion strategies for their products and services through digital platforms like social media, advertisements, and personal websites to attract more potential consumers, specifically the youth. They also need to adapt various strategies to bring sustainability into business and perform recycling and utilizing renewable resources to increase awareness of environmental health and organizational health. The SWOT and TOWS analysis enables some opportunities and options that are potent for organizational growth. For this, they need to implement innovative management strategies, policies, and recruitment of highly skilled human resources.

With the help of Ansoff Matrix the options are being categorized, they fall into such hybrid categories that the recruitment of a well-trained management system, skilled Business Units, and development of products and services on the demand of consumers are considered as effective strategies for business expansion (Wong & Ho, 2019).

Strategic Objectives to realize the chosen option:

The chosen option is to expand the marketplace into other international tourist destinations. As there are potential markets for this airline, they need to adapt strategic objectives. Strategic objectives are to create visions and goals. This also includes the steps to achieve the desirable outcomes of an organization. All of the above analyses help create strategic objectives. For the desired outcome of Cebu Pacific Airlines, the Growth strategic objectives will be the internal processes that are responsible for increasing the market influencing of the airlines. Financial strategic objectives are to shape budget, cost measurement, and profit regarding the airlines. The monetary requirements will be focused on particular steps to manage costs, analyze revenue, and plan for the financial growth of the airlines.

Learning or training growth objectives are to provide training to learn or skill advancement of leaders or managers as well as employees that are effective to increase capabilities and provide more specific knowledge with actions to them (Wong & Ho, 2019).

Businesses' operations strategic objectives allow change and restructure the method of the business operations. For more goals of effective production of products and services, the implementation of the most efficient process is done by business operations strategic objectives. The last one is to develop customer strategic objectives to know the customer experience and fulfill their requirements by providing products and services to satisfy their needs. This could be through communicating with them or collecting their feedback.

The Key challenges

To adapt strategies challenges will come into every step. For example, to expand the airline network into more international destinations, a load of financial investment as well as human resources will be required. In addition to that, different government of different countries has unique rules to regulations for foreign business organization like Cebu Pacific Airlines. Moreover, increasing the interest in establishing the airlines in other international markets can be challenging. The existing rivals in the aviation market of those countries will give tough competition. Furthermore, the importation and exportation costs will affect the revenue. Providing training to the employees can bear extra cost and time. Furthermore, employee management by providing a diversified business environment can be challenging to increase employee productivity and performance which is responsible for providing quality products and services to the consumers (Heiets, et al., 2019).

KPIs

The KPIs that can measure the choice success are defined as Specific, Measurable, Achievable, Relevant, and time-bound, compelled by the mission, purpose, and visions of the team. The financial KPIs are :

Cost: This helps to measure cost effectiveness and it is the best way to decline cost and manage it.

Profit: This is the most obvious performance indicator that is measured by analyzing net profit and gross profit margin to have a greater understanding of the success of the Airlines in generating revenue.

Cost of goods sold: This is done by tallying the entire production costs for the products and services of Cebu Pacific Airlines. The ideas of the actual margin of profit and the expected product markup will be generated by this. This data is important to capture the market of the competitors (Fainshmidt, et al., 2019).

LOB revenue versus Target: This is considered the comparison between the projected revenue as well as the actual revenue of the organization. Analysis through charts can determine the effectiveness of the departmental performance of Cebu Pacific Airlines.

Sales by Region: this is helpful to analyze and find the specific regions that are accomplishing sales objectives. Measuring by this, underperforming regions can be provided feedback for further improvement. There are other measurements as well, Average Annual Expenses to Serve One Customer, Cash flow from Financial Activities, Earning Before Interest, Taxes, Depreciation and Amortization, Customer Acquisition Cost, etc.

Conclusion:

Cebu Pacific Airlines is the High-rated airline organization of the Philippines. They provide regional flights as well as specific international flight destinations including Australia, Japan, Singapore, China, and the United Arab Emirates. As they provide quality products and services to the consumers, they prefer to purchase from them. Cebu Airlines's fare great value implementation is considered its core strength in generating customers in bulk. The BCG Matrix findings have shown that the airline has a star quadrant Business unit that generates a significant amount of profit. The Cash Cow product is also a business unit of Cebu Pacific Airlines that is responsible for generating great profit. On the other hand, the Dog products are plastic bags and the synthetic fiber Business unit is making the company face loss, so it is better to stop investing in them for future loss. Instead, try to implement strategies that are effective to alter them into Cash Cow quadrants (Belhadi, et al., 2021) The question mark quadrant needs investment for further research and development of the business unit that can change the product into the Star quadrant. Furthermore, it has shown that from the political perspective, government support plays a crucial role so it is necessary to be aware and follow government rules and regulations for the growth of the airlines. The core strengths, weaknesses, opportunity, and threats and their respective TOWS analysis enable Cebu Pacific Airlines as well as the readers to know specifically about the actions that are necessary for further business growth. Using Porter's five forces framework to analyze the two mentioned forces enables Cebu Pacific Airlines as well as the readers to gain knowledge about the impact of new entrants as threats and the bargaining power of customers have a huge impact on the expansion of the business into the aviation industry. The Ansoff matrix provided the categories and specific strategies that needed to be implemented to perform the options into each category to establish the business globally. The relevancy of the SAF framework in choosing the appropriate strategy is also provided here. Both Cebu Pacific Airlines and readers can be aware of these strategies. The strategic objectives are recommended for the future growth of Cebu Pacific Airlines. Each of the above-mentioned Strategic objectives has the potential to actively eradicate the possibilities of threats to market turnovers, generating loss, degrading brand values, customer retention, etc (Fainshmidt, et al., 2019).

There are Key Performance Indicators, and by measuring them the strategic success of the airlines can be monitored. This will help Cebu Pacific Airlines to know about the effectiveness of their implemented strategies for future growth and expansion of their airline's network specifically in the potential marketplace of overseas (Cebupacific Air, 2023).

References:

Belhadi, A. et al., 2021. Manufacturing and service supply chain resilience to the COVID-19 outbreak: Lessons learned from the automobile and airline industries.. Technological Forecasting and Social Change,, p. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7836947/.

Benzaghta, M. A. et al., 2021. . SWOT analysis applications: An integrative literature review.. Journal of Global Business Insights,, p. https://digitalcommons.usf.edu/cgi/viewcontent.cgi?article=1148&context=globe.

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Cebupacific Air, 2023. About Us. [Online]
Available at: https://www.cebupacificair.com/

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