Introduction and Problem Formation
The problem that has been identified in the company Cathay Pacific is regarding the issue where the company is looking to find ways which can help in reducing the cost and deliver a high quality product. The major challenge ahead is to find ways where Cathay Pacific can do more with less.
Information and Assumptions
I have assessed the situation within the company which indicates that Cathy Pacific has outsourced more than 65% of its operating budget outside the company. The company has looked to outsource most of its IT infrastructure to Australia where the overall cost of operations and employment is lower as compared to Honk Kong. I believe the results have been quite favorable for the company as it has been voted best Asian airline for three consecutive years. It has had a decent IM department which has been proactive with its approach.
Analysis
IM Excellence:
The introduction of IM at Cathay Pacific has been a positive induction as per my analysis of the results it has achieved for the company. I see that IM has been responding to business request rapidly. Moreover, it has been a transparent system which has been ensuring the simplicity of a rather complex infrastructure at Cathay Pacific.
Recommendations
Utilize the Chinese infrastructure efficiently:
Based on the problem which I have identified in the company my recommendation for the board of directors shall be to utilize Chinese infrastructure efficiently. The reason is simple, as per my observation of the market; the introduction of low cost carriers in the market might restrict Cathay Pacific success.
The prices offered by these small carriers are quite competitive and to sustain and compete with them Cathay Pacific needs to lower its prices too. To make it possible rather than having IT outsourced to Australia, the company should look to use China as the hub of outsourcing all its IT functions.Cathay Pacific Doing More With Less Case Solution
As for now 65% IT functions are outsourced, in the future remaining 35% should also be shifted to China. This will allow Cathay Pacific to reduce its prices and also work upon competing with rivals than to think about the IT issues.
Alternatives Considered
While coming to a conclusion, some other alternatives I evaluated are as follows:
Strategic partnership with PRC carriers
Utilize the Chinese infrastructure efficiently
Train procurement staff to handle outsourcing................
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