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The Effects of the General Environment on Cathay Essay

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The effects of the Economic segment -The aircrafts are highly dependent on petroleum as the starting energy and the price of petroleum is keeping increase in last few years, so the cost of operation of Cathay Pacific Airlines is unavoidably increase, and the air ticket price also need to be raised to offset the increasing petroleum cost, finally the sales of air ticket of Cathay Pacific Airlines may decrease. The effects of the Technological segment As the broadband Internet connection is developing rapidly in every countries now, the management class persons can use video conference through Internet connection to launch cross-countries meeting, and they can travel by air less to save cost and time . So the sales of business class or first class air-tickets will decrease as the management of every organizations are the sales target of business class or first class air tickets

The effects of the Political segment -China is keeping extend the “Individual Visits Scheme for traveling in Hong Kong” in more cities in China. China people are attracted by the reputation of “Shopping Paradise” in Hong Kong and they have high consuming power, so more people from China will come to Hong Kong for traveling. The sales of the air tickets will increase as the turnover of airline from cities in China to Hong Kong increase. China and Taiwan started the direct flights policy in 2009, and more cities in China will launch the direct airlines to Taiwan, so Hong Kong can’t enjoy the advantages of transit city between China and Taiwan, so the sales of air tickets between China and Taiwan via Hong Kong will decrease as the China and Taiwan adopt open policies in economic cooperation. -Hong Kong and Taiwan had signed the agreement to open the airline market and extend the cargo volume between Hong Kong and Taiwan in 30/12/2011.

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The sales of air tickets between Hong Kong and Taiwan will decrease as Cathay Pacific Airlines can’t enjoy the oligopoly market advantages in this airline as more competitors will enter this airlines market. However, the sales of air freight services will increase as the extension of cargo volume between Hong Kong and Taiwan. -The volume of Hong Kong Airport will be saturated in coming decade, and reclamation is one of the main methods to extend the Airport.

As more people concern about the effects of reclamation to the natural environment in Hong Kong, Hong Kong Government need to evaluate the reaction of Hong Kong people in this suggestion or to suggest other alternative development schemes for airport. If the extension scheme can’t launch on schedule and the volume of Hong Kong Airport saturates in coming years, the company can’t launch or extend more airlines, the competitiveness of Cathay Pacific will decrease. The effects of the Socio-cultural segment As people trend to want to plan their trips themselves, individual travels become more popular and common in Hong Kong, the sales of air tickets may increase if the company study their needs and offer appropriate packages to attract target markets. -As internet usage become more common in Hong Kong, people like to purchase goods or services through web site, like ebay or Tobo. E-commerce is a new tools to boost the sales figure as it is very convenience to do purchasing.

If the company can explore the needs of e-buyers, it may take the advantages of sales in internet. -As Hong Kong Government implement 5 days work now, and more private companies also follow the 5 days work pattern. This means more people will have 2 whole holidays every week, if the company can study their needs and offer appropriate package for them, the sales will increase as their demand on holiday trip increase. The effects of the Global segment As USA and Europe are facing economic crisis now, so the purchasing power of people in these countries are turning poor, so the sales of the air tickets and air freights between Hong Kong, USA and Europe will decrease as the people from USA and Europe are not affordable to go travel in Asia and the demand of cargo in USA and Europe importing from China decrease. -European Union will start charging the carbon emission tax from every Airlines to Europe on 1st of January, so the cost of airlines to Europe will increase.

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