Kim Jaeyeup

MARIKINA NEWs

Thu, 03 Mar 2011 23:52:00 -0500

This is my link to all my friends in the philippines and all over the world Marikina News is the longest-running local newspaper in Marikina Valley. Own by the Dulay Clan of Marikina Valley, it was founded to abolish “Marikina Apartheid” and promote equal political opportunities to all residents of the city.Six Chairmen has led the paper: Dr. Jimmy Trinidad who died in office is from Sta.Elena; Judge Ricardo Diaz of Concepcion, Atty.Cesar Turiano of Nangka who became a Grand Knight and a Faithful Navigator of the Knights of Columbus; Dr. Fabian Cadiz of Sto.Nino is now the Vice Mayor of Marikina and Romeo Balasta of Barangka who migrated to Illinois.

strama pages 1-11

Thu, 03 Mar 2011 23:45:26 -0500

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY………………………………………………………………….….3

II. EXTERNAL AUDIT

A. Industry Analysis………………………………………………………………….…5

A.1 Economic Forces

A.2 Environmental Forces

A.3 Social, Cultural & Demographic Forces

A.4 Legal, Political & Governmental Forces

A.5 Technological Forces

B. Porter’s Framework………………………………………………………………..12

C. Competitive Profile Matrix (CPM)………………………………………………..16

CPM Analysis

D. External Factor Evaluation (EFE) Matrix………………………………………………………………………………..17

EFE Analysis

III. INTERNAL AUDIT

A. Company Profile……………………………………………………………………18

B. Mission and Vision Statement……………………………………………………19

C. Services Offered……………………………………………………………………20

D. Internal Factor Evaluation (IFE) Matrix………………………………………….22

IFE Analysis

IV. OBJECTIVES………………………………………………………………………………23

V. STRATEGY ANALYSIS

A. TOWS Matrix………………………………………………………………..……..23

Recommended Strategies

B. Internal- External (IE) Matrix………………………………………………………28

IE Analysis

C. Strategic Position Action Evaluation (SPACE) Matrix…………………………28

SPACE Analysis

D. Grand Strategy Matrix (GSM)…………………………………………………….31

GSM Analysis

E. Boston Consulting Group (BCG) Matrix…………………………………………33

BCG Analysis

F. Quantitative Strategic Planning Matrix (QSPM)………………………………..35

QSPM Analysis

VI. STRATEGY RECOMMENDATION

A. Strategic Objectives……………………………………………………………….36

B. Financial Objectives……………………………………………………………….36

C. Recommended Business Strategy………………………………………………37

VII. STRATEGY IMPLEMENTATION

A. External Action Plan…………………………………………………………….…39

B. Internal Action Plan…………………………………………………………….….39

C. Controls……………………………………………………………………………..40

APPENDIX

Cebu Pacific (CEB) is the reigning airline company in the Philippines. It is also one of the cheapest air transports around the world. It offers low fares all year-round which travelers take advantage.

CEB allows everyone to experience many firsts in the industry, innovations such as the e-ticketing and internet booking through www.cebupacificair.com.

Cebu Pacific has two major competitors in the Philippines namely: Philippine Airlines and Zest Air. PAL has the greatest market share because it has more destinations than Cebu Pacific; while on the other hand, Zest Air has the lowest among the three because it has fewer destinations among the two.

Based on the CPM, Philippine Airlines is leading in the market as it got the total score of 2.70. Cebu Pacific’s major advantage is low price offerings, as implemented low fare and still continues to offer promos like Go lite where they offer big discounts on flights internationally and domestically.

The .15 difference indicates that there is a close battle between CEB and PAL for the number one spot.

The internal and external audit performed by the strategists revealed that CEB’s strengths are their maintained low fare; provide new airbuses, partnered with hotels, user friendly website, and more destinations.

Cebu Pacific’s weaknesses are long waiting lines, delayed flights, passenger discrimination, irregular customers, and poor customer service quality.

The opportunities are improvement of tourist spots in the Philippines, widening number of internet users, rising number of foreign students, business globalization and booming accidents in sea transportation.

Lastly, their threats are unstable economy, terrorist threats, increasing oil-price, rivalry within key destination and EU blacklist.

By the IFE Matrix, the factor Poor Customer Service was awarded the heaviest weight because Cebu Pacific is a service company, this should be given a greater prioritization to ensure customer loyalty.

By the EFE Matrix, Cebu Pacific must create new strategies to use those opportunities to adopt more customers and they must have a competitive advantage to be the top airline of choice as competition gets tighter because more airlines are offering the same key destinations as Cebu Pacific. It garnered a total score of 2.95.

After these two matrices, we conducted an IE evaluation was made and the result is CEB must make new strategies which is improving present strategies.

The strategists thus were able to create strategies guided by the matrices like the SPACE, GSM and QSPM which will help CEB reach the objective of the group like increasing their market share and sales after implementation of the proposed strategies. The action plan involve undertakings like marketing, technological advancement and offerings of additional services to help gain and maintain more loyal customers.

II. External Audit

A. Industry Analysis

A.1 Philippine Economy

The economy of the Philippines is the 5^th largest economy in South East Asia and has a mixed economic system, and one of the newly industrialized emerging market economies of the world. In 2008, it was ranked as the 36^th largest economy in the world by the International Monetary Fund according to purchasing power parity. It is one of the fastest growing economies in Asia, posting a real GDP growth rate of 7.3% in the year 2007. Growth slowed to 4.5% in 2008 as a result of the global financial crisis and in 2009, it grew barely by 1% but the economy weathered the 2008-09 global recession better than its regional peers due to minimal exposure to securities issued by troubled global financial institutions; lower dependence on exports; relatively resilient domestic consumption, supported by large remittances from four-to five-million overseas Filipino workers; and a growing business process outsourcing industry.

A rebound of consumer spending in the Philippine economy 2009 due to continuing increase in remittances by overseas Filipinos as well as timely implementation of monetary and fiscal stimuli prompted the World Bank (WB) to revise upwards its growth forecast for the Philippines to 1.4 percent in 2009 and 3.1 percent next year. Both figures reflect improvements from the lenders’ earlier 0.5 percent and 2.4 percent growth projections for the country for this year and 2010, respectively. Continued deployment of overseas Filipino workers results in the strong inflows of remittances. The World Bank now projects remittance inflows from overseas Filipinos (OFs) to grow by four percent with a net positive impact on the Philippine economy 2009, similar with the projection of the Bangko Sentral ng Pilipinas (BSP), from the previous forecast of four percent contraction. Corporate sectors focusing on the domestic market is showing improved profitability amid the continued slump of the small and medium enterprises involved in exports (http://www.cebu-philippines.net/philippine-economy-2009.html).

In recent years, declining fiscal deficits, tapering debt and debt service ratios, and increased spending on infrastructure and social services bolstered optimism over Philippine economic prospects. Nevertheless, the economy still faces several long term challenges. The Philippines must maintain the reform momentum in order to catch up with regional competitors, boost trade, improve employment opportunities, and alleviate poverty. High government spending to stimulate the economy has created a large budget gap that could limit the government’s ability to address these issues.

A.2 Environmental Impact

Aircraft engines produce emissions that are similar to other emissions resulting from fossil fuel combustion. However, aircraft emissions are unusual in that a significant proportion is emitted at altitude. These emissions give rise to important environmental concerns regarding their global impact and their effect on local air quality at ground level.

A comprehensive assessment concerning aviation’s contribution to global atmospheric problems is contained in the Special Report on Aviation and the Global Atmosphere, which was prepared at ICAO’s (International Civil Aviation Organization) request by the Intergovernmental Panel on Climate Change (IPCC) in collaboration with the Scientific Assessment Panel to the Montreal Protocol on Substances that Deplete the Ozone Layer and was published in 1999. This told us inter alia:

o That aircraft emit gases and particles which alter the atmospheric concentration of greenhouse gases, trigger the formation of condensation trails and may increase cirrus cloudiness, all of which contribute to climate change; and

o That aircraft are estimated to contribute about 3.5 percent of the total radiative forcing (a measure of change in climate) by all human activities and that this percentage, which excludes the effects of possible changes in cirrus clouds, was protected to grow.

The report recognized that the effects of some types of aircraft emissions are well understood, revealed that the effects of others are not, and identified a number of key areas of scientific uncertainty that limit the ability to project aviation impacts on climate and ozone.

Against this background, the ICAO Assembly in 2001 urged States to promote scientific research aimed at addressing the uncertainties identified in this report and requested the council to continue to cooperate closely with the IPCC and other organizations involved in the definition of aviation’s contribution to environmental problems in the atmosphere and the need to take initiatives for a scientific understanding of the problems (Assembly Resolution A35-5 (PDF), Appendix H). This was reiterated by the Assembly in 2007 (Assembly Resolution A36-22 (PDF), Appendix I). ICAO has requested the IPCC to include an update of the main findings of the 1999 report in its Fourth Assessment Report published in 2007.

The new findings related to aviation emissions are inter alia:

o Due to developing scientific knowledge and more recent data estimates of the climate effects of contrails have been lowered and aircraft in 2005 are now estimated to contribute about 3.0% of the total of the anthropogenic radiative forcing by all human activities;

o Total CO₂ aviation emissions is approximately 2% of the Global Greenhouse Emissions;

o The amount of CO₂ emissions from aviation is expected to grow around 3-4 percent per year; and

o Medium-term mitigation for CO₂ emissions from the aviation sector can potentially come from improved fuel efficiency. However, such improvements are expected to only partially offset the growth of CO₂ aviation emissions.

In the past, ICAO’s policy-making to address the environmental impact of aircraft engine emissions focused primarily on the ground level effects. In recent years, the scope has been expanded to include the global impact of aircraft engine emissions. In this regard, the Kyoto Protocol (PDF) (1997) to the United Nations Framework Convention on Climate Change (UNFCCC) is of particular importance. The Protocol, which entered into force on 16 February 2005, requires countries listed in Annex I to the Convention (industrialized countries) to reduce their collective emissions of six greenhouse gases, the one most relevant to aviation being carbon dioxide (CO₂).

Aircraft are required to meet the engine certification standards adopted by the Council of ICAO. These are contained in Annex 16 – Environmental Protection, Volume II – Aircraft Engine Emissions to the Convention on International Civil Aviation. These were originally designed to respond to concerns regarding air quality in the vicinity of airports. As a consequence, they establish limits for emissions of oxides of nitrogen (NO_x), carbon monoxide, unburned hydrocarbons, for a reference landing and take-off (LTO) cycle below 915 meters of altitude (3 000 ft). There are also provisions regarding smoke and vented fuel.

Another concern for the environment is the aircraft noise. Much of ICAO’s effort to address aircraft noise over the past 30 years has been aimed at reducing noise at source. Aero planes and helicopters built today are required to meet the noise certification standards adopted by the Council of ICAO. These are contained in Annex 16 – Environmental Protection, Volume I – Aircraft Noise to the Convention on International Civil Aviation, while practical guidance to certificating authorities on implementation of the technical procedures of Annex 16 is contained in the Environmental Technical Manual on the use of Procedures in the Noise Certification of Aircraft (Doc 9501).

In 2001, the ICAO Assembly endorsed the concept of a “balanced approach” to aircraft noise management. The Assembly in 2007 reaffirmed the “balanced approach” principle and called upon States to recognize ICAO’s role in dealing with the problems of aircraft noise. This consists of identifying the noise problem at an airport and then analyzing the various measures available to reduce noise through the exploration of four principal elements namely, reduction at source (quieter aircraft), land-use planning and management, noise abatement operational procedures and operating restrictions, with the goal of addressing the noise problem in the most cost-effective manner. ICAO has developed policies on each of these elements, as well as on noise charges (http://www.icao.int/icao/en/env/aee.htm).

A.3 Legal, Political, and Governmental

In 1973, form the Letters of Instruction (151 and 151A) the airline industry in the Philippines was monopolized by Philippine Airlines (PAL). The monopoly lasted for more than twenty years until the Executive Order 219 in 1995 which liberalized the airline industry establishing the domestic and international civil aviation liberalization policy in the country. The E.O. 219 stipulates the removal of restrictions on routes and flight frequencies, as well as government control on fares and charges. Following the liberalization, the industry attracted new entrants such as Cebu Pacific, Air Philippines, Grand Air, and Mindanao Express. Unfortunately, Grand Air and Mindanao Express were unsuccessful, and then SEAIR and Asian Spirit come to birth.

Today, airline industry in the Philippines is under the regulations of Department of Transportation and Communication (DOTC) under the civil aviation sector. The Civil Aviation sector is composed of the Manila International Airport Authority (MIAA), Mactan Cebu International Airport Authority (MCIAA), Philippine Aerospace Development Corporation (PADC), Civil Aeronautics Board (CAB) and the Civil Aviation Authority of the Philippines (CAAP) (formerly known as ATO). The department continuously upgrades and improves the international and domestic airport facilities to meet international standards and to provide better service to the commuters. On the other hand, our airline regulatory boards also recognize the International Civil Aviation Organization (ICAO). The ICAO has several regulations that the local boards are following.

Last March 19, 2009, the ISO 9001:2000 Certificate for NAIA Terminal 1 was awarded by the Anglo Japanese American (AJA) Registrars, Inc. after passing the Phase 1 Audit of the Passenger Facilitation Processes. On May 21, 2009, MIAA was given the upgraded ISO 9001:2008 Certification making the Authority and the NAIA Terminal 1 one of the very few institutions in the country that have passed this upgraded level of certification. (http://www.dotc.gov.ph/plansandprograms2010.htm).

Today, airline industry in the Philippines is facing a big issue on international safety standard. Early this year, the European Union banned airlines from Angola and vowed to block carriers from Sudan and the Philippines from starting flights to the 27-country bloc. The European Transport Commissioner Siim Kallas said that they cannot accept airlines fly into the EU if they do not fully comply with international safety standards. The Philippine authorities and airlines made efforts to resolve this issue but still Philippines would be banned from the EU as a precaution.

A.4 Social, Cultural, Demographics

Philippines is archipelagic, separated by water with other countries and is composed of many islands. Filipinos live in immense geographic locations. Depending on distance, options of travel are by land, sea and air.

As the world seems to become borderless and as the concept of globalization is embraced by everyone, airline industry seems to grow. Tourists, foreign students and businessmen travelling around the globe seem to grow also. The most used mode of transportation for long destinations is an airplane. People choose it over other vehicles for its speed, comfortability, and safety that is why most business people choose to travel by air as the business world requires fast pace.

The major passengers or air travelers are those people who love travelling, like inside or outside of the country. Some reasons for travelling include people going home to their respective provinces during holidays and regular seasons; some are having their vacations and some for business purposes.

Travelers tend to choose airlines based on several factors. Price, safety, customer, service, facilities, comfortability and of course its speed are the most wanted in an airline. Some airlines tend to offer promos for cheaper seat price for early booking, tour packages and partners with other establishments. Some passengers avail those promos, others do not. Mostly, air travelers buy tickets in advance.

Today, whether upper class, middle class, or low class people and whether domestic or international air travel, it’s easy to travel given the fact that there are several airlines that offer vast options to choose from.

A.5 Technology

Technology seems to run the globe nowadays. An airline industry is really a field of technology. An airline will be left out by other competitor if not technologically efficient.

A number of technologies that an airline can use in providing services, from its booking, payment, airplanes, and the like. Since today’s world seems to be a paperless economy, transactions tend to be done electronically; airlines can use this technology, e-ticketing, online booking, and even online payment through the use of banks, ATM cards or even credit cards. With the use of internet, by making websites, an airline could be more efficient.

Of course, safety should be also one of the priorities. Airlines should invest on such technology that will improve the safety of their passengers. There are researchers that develop equipment that will improve the safety when in air travel like a company called

Safe which has created an airbag to become one with the seat belt. Airbag is located at the front seat belts and will be out in the event of shock/crash hard. The advantage of an airbag is located in this belt is every aircraft do not need to make massive modifications to implement the airbags in their aircraft, enough to replace the old seat with this one. Barriers are a problem only in the price of one airbag is sold at a price of $1200, compared with ordinary seat belt purchased at a price of only $35.

The other is the Boeing Company and Chorus Motors which have demonstrated a technology that could be lead to a more efficient way of moving airplanes when they are on the ground at airports. Successful tests of an onboard electric motor attached to the nose wheel of Boeing 767 have shown that it may be a viable way of airplanes to move in and around gates, largely eliminating the use of airport tugs and jets engines now serving this purpose, as well as reducing emissions. It provides advanced system solutions and innovative, breakthrough technologies that reduce cycle time and cost while improving the quality and performance of aerospace products and services.

(Source: Previous Cebu Pacific Strategic Plans)

strama paper 11-26

Thu, 03 Mar 2011 23:38:27 -0500

JUST READ THIS Sun, Feb. 27, 2011

Strama Paper Pages 11-26

B. Porter’s Framework

Suppliers

Cebu Air, Inc. has placed a firm order for an additional seven A320 aircraft which Airbus S.A.S. reported. This increases Cebu Pacific’s service planes up to 22 aircraft, which are scheduled for delivery between the last quarter of 2010 and 2014. Powered by CFM 56 engines, will join the airlines existing A320 Family fleet flying on its domestic and regional network.

Consumers

Most nationals prefer air travel because it is faster unlike by sea. Air travel is the major means of transport to famous destinations locally. Because of business matters, corporate executives prefer air travel because of time difference. The biggest number of their passengers is local or foreigner tourists because Philippines are known for being a tourist country. The industry also depends on the season to determine the number of their consumer.

Substitute Services

Substitute transportations like water travel such as Super Ferry and RORO’s are somehow cannot totally replace air transport because of fares, time travel, and convenience. Cebu Pacific is the most affordable and fastest transport in the Philippines.

Market Competitors

Cebu Pacific’s major competitors are Zest Air, Philippine Airlines, and Air Philippines. Their only minor competitor is SEAIR.

Competitors Profile

Zest Airways

Zest Airways was established as Asian Spirit in September 1995 by three friends: Antonio “Toti” Turalba, Emmanuel “Noel” Oñate and Archibald Po, who contributed $1 million each to start up the Airline Employees Cooperative (AEC). They hired 36 of their friends which are mostly former Philippine Airline employees, to run Asian Spirit.

Zest Air started in April 1996 with two second hand Dash 7 aircraft with only one scheduled commercial route with two flights per day from Manila to Malay, serving the fledging resort island of Boracay. They introduced new routes to the present-day towns of San Jose, Virac, Daet and Alcantara, and the cities Cauayan and Masbate, regarded as secondary and tertiary routes by Air Transportation Office, and are not destinations by major airlines. In 1997, the cooperative changed to a corporate set-up with the establishment of Asian Spirit, Inc., whose registration was approved by the Securities and Exchange Commission in 2005.

Presently, Asian Spirit has the distinction of being the first scheduled airline to serve Caticlan airport. Other airways served the airport on a charter basis before. Zest Air became the Philippines’ fourth flag carrier after Philippine Airlines, Cebu Pacific and Air Philippines in year 2003.

Philippine Airlines

The Philippine Airlines is the longest airline company in the Philippines as a flag carrier. Incorporated February 26, 1944, PAL started their operation March 15 the same year. They currently have 49 aircraft servicing The Philippines and abroad .Philippine Airlines has its own terminal The Centennial airport or Terminal 2, for its domestic and international flights, except for PAL Express flights which use the NAIA Terminal 3.

Domestic Routes include: Laoag, Tuguegarao, Naga, Legaspi, Manila, Bacolod, Cebu, Dumaguete, Iloilo, Kalibo, Puerto Princesa, Roxas City, Tacloban, Tagbilaran, Butuan, Cagayan de Oro, Cotabato, Davao, Dipolog City, General Santos, Zamboanga, Caticlan, Busuanga, Calbayog, San Jose, Virac, Surigao, Catarman, Ormoc, and Ozamiz.

Air Philippines

Mr. Lucio Tan owned the airline with a slogan “Fly High Filipino” was founded in February 13, 1995. Air Philippines is also a low-cost airline based in Pasay City, Manila, Philippines. It operates extensive domestic scheduled services from Manila and Cebu. Air Philippines is operating all PAL Express flights on behalf of their parent company, Philippine Airlines. Domestic routes include Cebu and some of Mindanao areas.

C. Competitive Profile Matrix

Cebu Pacific

Philippine Airlines

Zest Air

CSF

Weight

Rating

Score

Rating

Score

Rating

Score

Advertising

0.10

0.20

0.30

0.20

Service Quality

0.30

0.60

0.90

Price Competitiveness

0.20

0.80

0.40

Financial Position

0.10

0.40

0.30

Customer’s Loyalty

0.15

0.30

0.15

0.45

Market Share

0.05

0.20

0.10

0.15

Global Expansion

0.10

0.20

TOTAL

1.00

2.70

2.85

2.60

Legend:

Weight: 0.0 – not important 1.0 – important

Rating: 4 – major strength 3 – minor strength 2 – minor weakness 1 – major weakness

Basis: Industry Analysis, Company Profile

*The company with the leading total has the advantage among the competitors in the airline industry.

Competitive Profile Matrix Analysis

Cebu Pacific’s competitive advantage is their low fare, as it continues to offer low fares and still continues to offer promos like Go lite where they offer discounts on flights whether domestic and international. Its major weakness is Customer Service Quality because based upon the survey that we conducted, Cebu Pacific fails to satisfy their passengers.

Based on the CPM, Philippine Airlines is leading in the market as it got the total score of 2.70.

D. External Factor Evaluation (EFE) Matrix

Key External factors

Weight

Rating

Score

Opportunities

1. Improvement of tourist spots in the Philippines

0.15

0.60

2. Widening number of internet users

0.03

0.06

3. Rising number of foreign students

0.05

0.10

4. Business Globalization

0.10

0.30

5. Booming accidents in sea transportation

0.07

0.14

Threats

1. Unstable economy

0.15

0.60

2. Terrorist threats

0.10

0.20

3. Increasing Oil prices

0.10

0.40

4. Rivalry within key destination

0.15

0.45

5. EU blacklist

0.10

Total

1.00

2.95

Legend

Rating: 1 – poor response; 2 – average response; 3 – above average response; 4 – superior response

Weight: 0.0 – not important 1.0 – important

Basis: Industry Analysis, Company Profile

External Factor Evaluation (EFE) Matrix Analysis

The external factor evaluation is the most important factor of Cebu Pacific’s low fare offering which is their key strength which means that if they lose customers because of economy failure, their net income and sales will be affected surely . Rivalry within key destinations and the improvement of tourist spots are at the same level of importance because CEB must creat new strategies to make use of those opportunities to have more customers and they must build a competitive advantage over other local competitors because almost every airline in the Philippines has the same destinations with Cebu Pacific.

The Oil Price Instability is given just .05 because Cebu Pacific is not that much affected by the increasing oil price in the market. CEB uses hedging on fuel which makes them unaffected unlike local competitors.

III. Internal Audit

A. Company Profile

Cebu Pacific (CEB) is the reigning and leading domestic airline in the Philippines and one of the low-cost air transports in the world. It offers a unique low-fare that has attracted travelers to enjoy affordable flights to countless local and international destinations. It offers discounted fares all year-round. This unique service provides cheap fares because of advanced bookings.

In addition, Cebu Pacific provides their local and foreign customers to easily contact them like online ticketing and inquiries by just logging on to www.cebupacificair.com.

On the present time, CEB flies the Airbus A320 family (10 A319 and 11 A320). In addition, CEB has taken delivery of eight ATR72-500 aircraft. CEB still has ordered numbers of airbuses to be part of their service.

CEB has the most numbers of destinations in the Philippines compared to local competitors such as Philippine Airlines (PAL), Air Philippines, SEAIR, and Zest Air. CEB also continues to expand their international flight destinations, but at the present time, CEB has 14 destinations in 11 countries scattered in Asia.

Some facts about Cebu Pacific:

o CEB was popularized by its “dancing flight attendants” last year.

o CEB is the first local airline to have a female commercial jet captain on board.

o Through online ticketing or E-ticketing, CEB customers can book their flights anytime and anywhere without going to ticketing offices, just log on to CEB’s website, www.cebupacificair.com.

o CEB operates airbuses like their new A380.

o CEB transported most of the local travelers. The company had an increase in sales last 2010.

B. Vision-Mission

Vision

Cebu pacific is internationally renowned as the most successful low-cost carrier in the Asia-Pacific region.

We take pride in being the best domestic airline and the Filipino travelers’ first choice.

We are reputed for our unparalleled genuine, warm and caring service.

We are recognizing for our innovation and commitment to excellence, and we are the industry and academe benchmark for success.

We are an employer of choice, providing many opportunities for professional and personal growth in learning, egalitarian and non-bureaucratic workplace.

Our people are goal-oriented team players, empowered and discipline, with a big sense of integrity, enthusiastically spreading the culture of fun throughout the world.

Our equipment, facilities and systems enable us to ensure consistent highly efficient levels of operation.

We have a deep sense of family extending beyond the airline, encompassing the communities we serve and the family we love.

Mission

Cebu pacific brings people together through an affordable, reliable mode of travel, a fun-filled experience that’s delivered with a true heart and soul for service.

We enhance the quality of life of the communities we serve and are an active partner in the nation’s progress.

C. Service Offered

Go Fares

Cebu pacific offers affordable fares thru our Go Fares available all-year round. With our Go Fares, you can go see your family or go have a vacation. Booking earlier gives you more discount. The earlier you book, the lower the fares.

Go Lite Fares

Go lite fares are for passengers with no check in baggage. They may have a carry-on (hand carry) bag that weighs 7kgs or less.

Seat Sale

Cebu Pacific offers discounts up to 50% less if a passenger books within the timeframe given by the company. This allows passengers to have discounts for booking early and travelling also within the travel time given by the airline.

Additional Services

Fun Tours

This service provides passengers to enjoy their tour in their destination. This service includes a roundtrip promo, meals, entrance fees at theme parks provided by the company, and many more incentives. Passengers travelling with their family, group of friends, or a company outing are Cebu Pacific’s target in this service.

Hotel Plus

This is Cebu Pacific’s strategy in having an alliance like hotels inside our outside the Philippines. Travelers get a discount or even a free stay in a hotel in their destination which they can buy when they book a ticket.

Rent-a-car

Cebu Pacific has partnered with Euro car. This company operates at all destinations in Philippines with a wide bunch of car models to choose from. By having a car, tourists can travel on their own to see more places in the country.

Seat Selector Service

In booking a flight, passengers have the right to choose their seating arrangement. Standard seat selection is available for most seats. They offer standard legroom and a more space for the legs for just a cheap cost.

Sports Equipment Fee

Cebu Pacific takes the liability for transferring sports equipment such as bicycles, fishing equipment, golf clubs, scuba/diving equipment and surfboards/wakeboards. This service is available to all destinations except for Caticlan.

Key internal factors weight rating weighted score

Internal Strength

1. Low fare offerings 0.15 4 0.60

2. New Airbuses 0.10 4 0.40

3. Partnership with hotels 0.05 3 0.15

4. User-friendly website 0.05 3 0.15

5. More destination 0.15 2 0.30

Internal Weaknesses

1. Long waiting lines 0.10 1 0.05

2. Delayed flights 0.10 2 0.20

3. Passenger discrimination 0.05 2 0.30

4. Poor customer service 0.20 1 0.25

5. Irregular customers 0.05 2 0.20

TOTAL 1.00 2.60

D. INTERNAL FACTOR EVALUATION (IFE) MATRIX

Legend

Rating: 1- poor response; 2-average response; 3-above average response; 4-superior response

Weight: 0.0-not important 1.0-important

Internal Factor Evaluation (IFE) Analysis

In this analysis, weights are given to internal factors during process; this is derived from the company’s profile. The weights mean how important these internal factors are. A rating from 1 to 4 is based on judgment by strategies to show how effective the firm’s current strategies.

The factor Poor Customer Service is given the heaviest weight because Cebu Pacific is a service company, they should give more importance to this matter because they fail to work on this area.

IV. OBJECTIVES

o To raise their market share by 4.5% in 2012

o To boost their profit to compensate their loss last year

o To increase their net operating income by 20% in 2012

V. Strategy Analysis

A. TOWS Matrix

Internal Strengths

Internal Weaknesses

Low fare Offerings

Long waiting lines (ticketing)

New airbuses

Delayed flights

Partnership with hotels

Passenger Discriminations

User-friendly website

Poor customer service

More destinations

Irregular customers

External opportunities

SO strategies

WO strategies

Improvement of tourist spots in the Philippines

S1O1- additional flight destinations

W5O2- better website

Widening number of internet users

S1O2- improvement of e-marketing

W4O1- lift customer service

Rising number of foreign students

S3O3- distribution of brochures of top schools in the country

W3O2- promote E-booking

Booming accidents on water

S1O4- Provision of mileage

Business globalization

External threats

ST strategies

WT strategies

Unstable Economy

S4T1- attract more investors

W4T4- add baggage tracker

Terrorist threats

W4T2- provide higher security

Increasing oil prices

W4T4- improve training of staff

Rivalry within key destination

EU blacklist

Recommended strategies

Market penetration strategy is to boost market share for existing products or services. This includes booming the number of salespersons, increasing advertising cost, offering promotional items, and raise publicity efforts. Product development focuses on product research and improvement. In airline industry, Cebu Pacific always pursues product/service development, because customers increasingly are willing to pay more for the products and services with excellent facilities or technology.

Internal Strengths

Low fare offerings – Customers who book weeks early takes a high advantage like price discounts. This strategy attracts more customers to book their flights early.

New airbuses - Cebu pacific acquired new airplanes like the airbus which can accommodate more passengers.

Partnership with hotels - Cebu pacific also offer tour packages like group package that a company or group of friends can enjoy. This package comes with hotel accommodations.

User-friendly website – The company’s technical staff improves the website by making it very understandable to customers local or foreigners. They also added translations like Chinese and Korean language so that Chinese and Koreans can understand it very well.

More Destinations – Cebu Pacific dominates the Philippines in terms of destinations. Having key and tourist destinations like Caticlan(Boracay), Bohol, Cebu, and Davao is one of the company’s target destinations to gain more sales.

Internal Weaknesses

Long waiting lines (ticketing) – Cebu Pacific’s ticketing offices are always having long queuing lines which passengers always complain.

Delayed flights – Delays are inevitable for airlines. In the year 2010, Cebu Pacific always comes with delays which passengers are always affected. Delays were caused because of the improvement of airport tarmacs.

Passenger Discriminations – This year 2010, Cebu Pacific was twice had an scandalous discrimination because of rejecting a group of doctors who were traveling with internal organs which were supposed to be for transplant.

Poor customer service - Surveys about Cebu Pacific were not good for year 2010. Passengers always complain lost baggages, damaged baggages, and insults from crews.

Irregular Customers – The airline could not maintain regular customers from time to time due to some good offers from other airlines like PAL and Zest Air.

External Opportunities

Improvement of tourist spots in the Philippines – This opportunity is concerned with the improvement of present and existing tourist destinations in the Philippines.

Widening number of internet users - internet is now one of the basic modes of communication and more people have access to it. This is another opportunity for Cebu pacific to put up online advertisements and to make their company be more attractive by positive feedbacks of critics and bloggers.

Rising number of foreign students – Many foreign nationals went to the country to study in our universities and colleges. This is a proven fact that passengers are always a prospect.

Booming accidents on water - in 2009, more accidents in the sea occur, resulting to loss of lives and money of many people. This is an opportunity for Cebu pacific because there are less accidents in air travel, thus, they can promote safer travel to different destinations even though their fare is a bit higher.

Business globalization- businesses are expanding to different countries and business is getting easier due to internet. Though people transact online, they still travel to different locations to do business or use cargo to send packages here and abroad.

STRAMA pages 26-41

Thu, 03 Mar 2011 23:30:55 -0500

Strama Paper Pages 26-41

External threats

Unstable economy – Philippine economy is very unstable, nobody could predict if when a worst case scenario will occur. Cebu pacific will be affected greatly if the economy is not good because the price of fare they offer can go high, which will not be afforded easily by other passengers.

Terrorist threats – For the year 2010, many terrorist threats were received. Terrorism has always been a problem of the Philippines, and though Filipinos know that it is just in Mindanao which is filled with terrorists, foreigners get afraid of coming in the Philippines, for fear of being kidnapped in the streets.

Increasing oil prices – the company is always affected because of oil price hikes; this can cause to increase of air fares.

Rivalry within key destination- having competitors to key destinations like Caticlan for example is a great challenge for the Cebu Pacific. Many airlines now offer tours and packages just to attract more customers.

EU blacklist- all airlines in the Philippines are part of the European Blacklist because none was able to pass the safety standards of the European airline industry.

B. internal – external (IE)

IFE = 2.60

EFE = 2.95

STRONG

(3.00~4.00)

AVERAGE

(2.0~2.99)

WEAK

(1.00~1.99)

HIGH

(3.00~4.00)

III

MEDIUM

(2.00~2.99)

LOW

(1.00~1.99)

VII

VIII

EFE total weighted score- width

IFE total weighted score- length

1, 2, 4 – grow and build

3, 5, 7- hold and maintain

6, 7, 9- harvest or divest

IE matrix analysis

The total EFE score is 2.95 while the total IFE score is 2.60. This resulted to number 5 divisions, which mean hold and maintain, or market penetration and service development. Cebu pacific must venture to other destinations too while improving their services. They show a great potential in becoming the market leader in the airline industry in the Philippines.

STRATEGIC POSITION ACTION EVALUATION (SPACE) MATRIX

Basis: IFE and EFE

Conclusion: X-axis = (IS + CA)

Y-axis = (FS + ES)

Rapid Market Growth

QUADRANT II QUADRANT I

Conservative Aggressive

Strong

X axis Competitive

Weak competitive position position Competitive

QUADRANT III QUADRANT IV

SPACE MATRIX ANALYSIS

Cebu pacific’s directional vector is in the aggressive quadrant of the SPACE Matrix which means that Cebu Pacific is a stable company and gained advantages over other competitors and also financially stable.

From the quadrant I, Market Development, Service Development, and Horizontal integration are the best strategies that can be used by Cebu Pacific Air.

D. GRAND STRATEGY MATRIX (GSM)

Rapid Market Growth

QUADRANT II QUADRANT I

X axis

Weak Strong

Competitive Competitive

Position Position

QUADRANT III QUADRANT IV

Y axis

Slow Market Growth

Basis: Space Matrix

Grand Strategy Matrix (GSM Analysis)

The airline company is located in the Quadrant 1 because of the following reasons:

The Filipino living is improving, airline industry increased, that is why given the rapid market growth of the airline industry.

The Cebu pacific is in an excellent strategic position, for the airline company, concentration on market development strategy.

The strategies both defined in SPACE and Grand Strategy Matrices are defined as follows:

1. Market Development, which is the introduction of new products and services to other areas.

2. Market penetration, which is having higher market shares.

3. Product development, which goal is to increase sales and improvement of existing products or services.

4. Forward Integration, which is gaining ownership over distributors and retailers.

E.BOSTON CONSULTING GROUP (BCG) MATRIX

Market Growth +50

Stars Question Marks

1.0 0.75 0.55 0.45 0.25 0.0

Cashcow

-50

LEGEND (FROM 2008 REPORT)

Revenue Contribution

QSPM ANALYSIS:

AS=Attractiveness Score; TAS=Total Attractivness Score

AS: 1 = Not Attractive 2 = Somewhat Attractive 3 = Reasonably Attractive

4 = Highly Attractive

We have three strategy alternatives, which are market development, horizontal integration and service development. Service development strategy is the highest. Using these strategies Cebu Pacific will have more profit and regular customers.

F. QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)

Key Factors

Weight

Horizontal

Integration

Market

Development

Service

Development

Internal Strengths

TAS

1. Low fare offerings

0.10

0.40

2. New airbuses

0.15

0.45

0.60

3. Partnered with hotels

0.05

0.10

4. User-friendly website

0.05

0.10

0.05

0.10

5.More destinations

0.10

0.20

Internal weaknesses

1.Long waiting lines

0.05

0.20

2. Delayed flights

0.10

0.40

3. Passenger discrimination

0.15

0.30

0.15

4. Poor customer service

0.20

0.80

5. Irregular customers

0.05

External

Opportunities

1. Improvement of tourist spots in the Philippines

0.15

0.45

—

0.30

2. Widening number of internet users

0.03

—

0.09

3. rising number of foreign students

0.05

—

0.10

4. booming number of accidents in sea transportation

0.10

0.20

—

5. Business Globalization

0.07

0.14

External Threats

1. Unstable Economy

0.20

—

0.60

2. Terrorist threats

0.10

—

0.30

—

3. Increasing Oil price

0.05

—

0.05

—

4. Rivalry within key destination

0.15

0.45

0.30

0.45

5. EU Blacklist

0.10

0.40

—

TOTAL

1.00

4.34

4.44

4.63

VI. STRATEGY RECOMMENDATION

Cebu Pacific’s objectives for the year 2011-2012 are as follows:

Strategic Objectives:

· To establish regular customers

Financial Objectives:

· To increase their market share by 3.5% next year.

· To increase their net operating income by 18% next year.

Recommended Business strategies

To contain the company’s advantage over competitors, the following are suggested to keep Cebu Pacific on top:

· Market Development

· Service Development

Strategy 1

Market Development - this strategy makes the company in partnership with other companies.

1. Proposed marketing Alliance Strategy

a. Marketing alliance with McDonalds

This strategy gives free meal coupons to regular customers of Cebu Pacific. To avail of this incentive, a customer should purchase a roundtrip ticket in any destinations in the Philippines only. The McDonalds coupons are redeemable within 5 days after returning to the point of origin.

b. Reward points with Bench

Ben Chan, owner of Bench, is one of the popular clothing brands in the Philippines. Bench, has more than a hundred store branches nationwide. A Cebu Pacific customer should earn points by purchasing tickets. Every destination has respective points. Every points earned must be not less than the price of the clothes that a customer wants to redeem.

c. Marketing alliance with Shangri-La’s Mactan Resort and Spa

Shangri-La’s Mactan Resort and Spa presents guests a range of special deals and offers that should be taken advantage of when traveling to Cebu. Purchasing roundtrip tickets gives customers a 15% discount. This is not valid with promotional tickets.

2. Proposed Additional Services

a. Printing brochures of tourist spots in every destination

This strategy will boom the Philippines Tourism industry. By knowing what the tourist spots in every destination, customers will have the ability to choose where they want to visit. These brochures will be distributed before the plane will take-off.

b. Implementation of mileage system

This will be enjoyed both customers and the company. By giving incentives like free travels. The mileage system is also a reward points that is earned. For every destination, a passenger can accumulate reward points for the number of miles they travel and can avail of the rewards such as free tickets and discounts.

Strategy 2

Service Development - This strategy focuses on improving some of the company’s products or services. It seeks to increase the sales of the airline. Providing a high quality service to customers is the goal in this strategy.

1. Proposed Personnel Enhancement

a. Staff Training and Development Seminar

The recent feedback about Cebu Pacific is that they are below average customer service. An example of this is the scandal early in 2010 where they refuse the doctors carrying internal organs which were used for transplant to board the plane. Training and seminars must be conducted to keep their staffs meet the customer’s standards. This will keep the company’s positive image to the public.

b. Tightening Airport Security

Lost baggages is one of the issues in the airport. Airport security must be tightened from getting the baggages in the plane, up to the baggage claiming area. This will trace any baggages lost during the transfer.

3. Proposed Technical Features

· Website Development

Through the use of internet, customers nowadays just purchase their tickets online rather than going to airline ticketing offices. This strategy will lessen the stress of customers in buying their tickets. Making a easy to access website and a step-by-step online procurement system is what customers would want.

VII. Strategy Implementation

A. Internal Action Plan

Activity

Objective

Time Frame

Persons Involved

Budget

Website Development

To improve online ticketing system

To be more user friendly

February 2011

Administration and Technical Staff

P 1,000,000

Mileage system Implementation

Customer loyalty

March 2011

Administration Staff

P 500,000

Printing of Pamphlets/Brochures

To inform locals and tourist about the destination

March 2011

Marketing and Operations Department

P 300,000

Staff Training and Development Seminar

To enhance their skills in dealing with customers

March 2011 to April 2011

Administration Staff

P 1,500,000

Tightening airport security

To decrease unwanted incidents

June 2011

Administration Staff

P 500,000

Increasing web advertisement

To be more familiarized to the public

July 2011

Marketing and Operations Department

P 200,000

B. Controls

The areas below will be reviewed for the achievement of short-term and long term goals and objectives:

1. Checking the bases of the organization’s strategy.

2. Measuring the organization’s performance.

3. Reviewing forecast results to actual results, checking the company’s plans, viewing departmental performance, and determining the short-term milestones that are achieved during the period.

4. Having fast solutions from changes that may occur.

APPENDIX

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Fri, 18 Feb 2011 00:26:08 -0500

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