Cebu Pacific Paper

3073 Words Feb 7th, 2012 13 Pages
Case Context
Cebu Pacific Air owned by the Gokongwei family and established in 1988, is the provider of most domestic flights in the Philippines. In 2000, Cebu Pacific Air was able to go international and expanded operations to Asia-Pacific countries. It owns 45% of the market share, and is among the top 5 in growth in terms of passengers carried and served. The airline company is known for its promo fares, where one can save around 40% to 50%, if flights are booked early. For the longest time, Philippine Airlines, Cebu Pacific Air's competitor, dominated the local airline industry. Through the liberalization program, the latter was able to enter the market and gain its share of customers and passengers. In response, PAL adjusted its
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The “Piso Fare” that they launched in 2005 was already a big help to company. More and more people are choosing Cebu Pacific over other airlines, such as Philippine Airlines. What is important now is for travelers to get to their destinations in the most affordable way possible, and the company was able to offer them a low-cost yet high-quality service that perfectly catered to the needs of their clients.

SWOT Analysis
The key strengths of Cebu Pacific are on its strong market positioning, lean cost structure, ability to reap scale efficiencies, healthy brand equity, and balance sheet strength. The heights of Cebu Pacific’s victory over its competitors cannot be attributed to the aggressive low-pricing strategy that it blazed per se. The ability of CEB to identify the objects that are of value to their customers, and extend those perquisites at low cost is of tantamount importance in the airline’s success. Cebu Pacific customers also get their value through the airline’s very convenient online reservation and payment system. This, equipped with the company’s partnership with banking firms as well as servicing companies such as LBC and Rustan’s, as well as its rigorous promotion in social networking sites, allows the customers to access information regarding CEB’s prices and low promo fares and easy payment. Equally valuable is also the management’s employee training which reflects the company’s strong
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