Travel Industry Is Currently Undergoing Several Changes

¶ … travel industry is currently undergoing several changes because of the introduction and increased use of internet technologies. These technologies have provided several opportunities in this industry that have made it more attractive for small companies because of the numerous advantages associated with these developments. For a small company considering entry into the internet for market travel, there are various strategy routes that can be used for developing corporate and global strategy for all business operations. The most appropriate strategy for such a company is the prescriptive strategy route because its helps in strategic planning, which is an important aspect for every company or business. This approach enables the firm to develop its objectives, goals, and intended strategies to business operations through analysis of the environment and the organization's resources.

As an established internet provider, the small company can used learning-based, survival-based, and network-based strategies to increase its presence in the market. In this scenario, the firm should not consider using uncertainty-based strategy route because of its minimal regard of the value of strategic planning. Nonetheless, companies in the travel industry should consider adopting the Internet because of its expected impact on the future of travel, especially on customer buying patterns and the future of travel agents.

Market for Internet Travel:

As the modern society and business environment is characterized with rapid technological advancements, these developments have continued to transform the way business is conducted. One of the major examples of the impact of these developments on business operations is that Internet technology is transforming the U.S.$100 billion global market for travel booking. For much of the previous five decades, many travelers have basically used independent travel agencies to book their tickets and accommodation for nationwide and global travel. The widespread use of these agencies originated from their possession of relevant contacts and networks with airlines, hotels, car hire agencies, rail operators, and other firms involved in providing travel services. In the past ten years, internet technology has revolutionized this market because it has allowed linkages in travel services to occur at the level of individual customers. While it's not yet complete, online independent booking has been brought by Internet technology as travel agencies have been eliminated from the value chain. However, the main concern is regarding the most appropriate strategic route to use when designing a strategy, particularly for smaller travel companies.

Appropriate Strategy for a Small Company Entering the Internet Travel Market:

As independent travel is growing, independent travelers are more likely to be attracted to and choose to use the Internet. Such travelers basically include young travelers with limited time and money and retired independents with more time and money. However, independent travelers account for a huge portion of Internet travel booking. Given that the Internet travel booking market has continued to grow to an extent that it's currently large, it's quite difficult to obtain a complete view of the various services and booking agencies that are available. This difficulty is also associated with the ongoing change and development of the market and industry.

Currently, internet travel service providers can be divided into three major categories i.e. primary providers, online travel agencies, and metasearch travel websites. The primary providers include the main airlines, hotel chains, rail companies, and car rental firms. These providers are time-consuming to find on the internet, especially on information about their availability, special deals, and prices. On the contrary, online travel agencies are firms that provide a variety of travel services and primarily driven by a specialist sector. Metasearch travel websites are the seemingly new firms that use complex search engine technology to find all the available prices and compare them. As a result of their differing nature, the profits from online business operations depend on the specific nature and category of the firm. Each of these internet travel company categories has varying profit margins and sources because of the differing operating environments.

In the past few years, numerous questions have been raised regarding internet travel opportunities for small companies. While the cost of establishing and maintaining a new internet travel website is relatively small, smaller companies need to consider various factors in their efforts to establish travel websites. This is primarily because establishing and maintaining the website is not the only major factor to internet travel strategy since real success depends on attracting enough customers in order to generate enough business and profits.

When considering the opportunities to move into the market for internet travel, a small company needs to choose the most appropriate strategy to use. There are various strategic routes that can be used by a small firm when developing a plan to enter the internet market such as prescriptive strategy processes and emergent strategy processes (Lynch, n.d.). Prescriptive strategy processes are those in which the objective is designed in advance and elements developed before the strategy is implemented. This process begins with an evaluation of the external environment and the company's resources which is followed by the development of the organization's objectives. This process is followed by the development of strategic options to accomplish the established goals where at least one of the options are chosen and implemented.

On the other hand, the emergent strategy process route does not have similar fixed objectives since the entire process is experimental with varying possible results based on the development of issues. The emergent strategy process is an initiative in which the final objective is not certain and whose elements are designed as the strategy proceeds. While the initial stages of this route may be the same as those of the prescriptive strategy i.e. environmental and resources analysis, it becomes a learning, circular, and experimental strategy. Each of these strategies produces different outcomes in companies where they are used depending on the nature of the company and business. Moreover, every strategy is based on unique strategy theories though they are geared towards a firm's strategic management.

For a small company moving into the market for internet travel, prescriptive strategy route forward seems to be the most appropriate strategy. Its suitable approach to strategic management for a small company because the objectives are determined in advance and the main elements of the goal is also established before the commencement of the process. This enables such firms to analyze its resources and business environment as well as make decisions and take actions that would provide an effective market entry that promote its competitive advantage. The other reason for the suitability of the approach for small companies entering the market for internet travel is that it provides a centrally controlled approach towards all business initiatives.

Since there are different categories of companies in the internet travel market, it's important for a new firm, especially small companies, to critically examine the business environment and its resources in order to identify an appropriate business position. As a result, these companies need to adopt a centrally controlled approach through the use of a strategy route that promotes such approach. As this industry is large and continues to grow constantly, small companies cannot take chances to enter into the market without clearly defined goals and established objectives. This mechanism can only be accomplished through the use of a classic prescriptive strategy route towards the company's strategic management.

Many smaller companies have been considering market opportunities in internet travel because of major advantages associated with this kind of business. The three major advantages of this business to small companies include the fact that fixed operational costs in the initial stages of the business are relatively small. As compared to other businesses, smaller companies in this market do not have to seek for expensive office premises and expensive advertising arrangements. Secondly, this kind of business enables a company to benefit greatly from the wide and global reach of the Internet. As a result, the companies can find enough clients easily through providing its services beyond national boundaries. The other advantage is the ease to monitor all business activities constantly by examining various aspects of the operations such as packaging, changes in pricing, and services that reflect traffic flows.

Unsuitable Strategy Routes for a Small Company:

As previously mentioned, there are other strategy routes that can be used by an organization or company in strategic management decisions. While the prescriptive approach to strategic management has some shortcomings, there are other strategy routes that are not suitable for a small company such as the emergent strategy processes. An emergent strategy can basically be described as a pattern of actions that develop in a firm over time in the lack or despite of specific mission and goals ("Emergent Strategy," n.d.).

While it's also known as realized strategy, emergent strategy routes and processes are different from the prescriptive strategy because they are not intended strategy. This strategy develops as intentions collide with and embraces the changing reality in the business environment. In some cases, the emergent strategy route has been described as a set of behaviors and actions that are constant over time and realized though they were not included in the initial planning strategy. This route means that the company is learning what works in the industry or market through practice rather than an intended course of action.

The most unsuitable emergent strategy route for a small company is the uncertainty-based strategy approach that considers the prediction of the environment as being of minimal value. As a result, the approach largely disregards the importance and value of long-term planning within the organization. This is mainly because the approach is based on the uncertainty-based theories of strategy that considers analysis of the environment and strategic planning to be of minimal significance to an organization.

This strategy route is unsuitable for a small company because it does not provide the organization with a purposeful direction, especially in the large and constantly developing market. This strategy does not promote the development and establishment of deliberate approaches to business practices. Since the internet travel market is constantly changing and growing as many companies try to establish their position and increase their competitiveness, it's becoming increasingly volatile. Therefore, a small company needs to develop deliberate approaches to its business operations before entering this market. Such approaches cannot be developed and established through emergent strategy route and processes. In most cases, this strategy is more suitable for organizations that are facing a turbulent and fast-changing business environment that provide several threats and opportunities.

Strategy Routes to Develop the Company's Presence:

Once the company has used a classic prescriptive strategy to enter into the market for internet travel, the organization can use other strategy routes to develop its presence further in this industry and market. The other strategy routes that the small company can use to further develop its presence in this market include the survival-based, learning-based, and network-based strategy routes. Each of these strategies plays an important role in the development of the company's presence in the internet market, the development of a corporate strategy, and enhances the firm's profitability in the market.

The survival-based strategy route forward considers survival of the fittest in the market as the most important factor that determines a company's corporate strategy. Since operating a small business is usually a challenging adventure that can sometimes be a huge struggle, it's important to maintain control of the business operations in every stage. The market for internet travel requires companies, especially small companies, to manage costs and respond effectively to opportunities and threats that emerge in course of the company's operations. Without addressing such aspects, the small company may experience huge difficulties and challenges in developing its presence in this market. On the contrary, response to these business aspects enables the firm to avoid ignoring its profit margin and focus on unnecessary elements of its operations.

According to Fulbright (2011), survival strategies may take several forms that enable the company to focus on its most important resource i.e. customers. Some of the approaches that can be used under this strategic route include introduction of new offerings, taking advantage of tough times, time management, and enhancing the company's advertising strategies. When such approaches are implemented, the company will develop its presence in the market.

The other suitable strategy route that could be beneficial in developing the presence of the company in the market is the learning-based approach that helps in achieving meaningful growth. As an important emergent strategy route, this approach reflects the company's systems and procedures that enable the firm to respond quickly and flexibly to the opportunities and threats originating from the growth of the industry. The learning-based strategy route is vital for the development of the company's presence in the internet travel market because of the constant changes and development that take place in this industry.

Technological advancements have continued to change business environment and operations in the past and are expected to continue doing so in the future. As a result, online companies are required to continue developing their business operations and strategies based on the changes that occur in the industry and market. The development of business practices in this environment can be achieved through the learning-based strategy route that focus on learning and crafting as the major aspects that shape the development of an effective corporate strategy.

The use of this strategy will enable the small company to understand the ever-changing demands of customers and position itself appropriately in the market. One of the most important examples of the use of this strategy route is when Intel Company was forced to withdraw from the memory chip (DRAM) market. The withdrawal from this market was mainly in response to the existing market conditions within the industry. The strategic context of this memory chip started to dissolve as middle-level managers started to react to the internal and external selection pressures. Moreover, this withdrawal took place before the official corporate strategy for the DRAM memory chip was restated ("Strategy as Rational Planning," n.d.).

Finally, network-based strategic route is the other approach that can be used to develop the presence of the company in the internet market for travel. This approach examines the links and extent of existing co-operation in related organizations and industries. As a result, the strategy route places a significant value on the extent of co-operation. In most cases, network externalities emerge when the firm is part of an external network that seeks to standardize certain operational aspects across the industry. Companies within this network derive benefits when the standardization has been accomplished and increases as other firms embrace the standard.

As an established internet provider, the strategy can be useful in enhancing the organization's presence in the market. The company can work alongside other firms in the internet travel market to establish standards for required information for booking a ticket and new ticketing services. This may contribute to shared development costs and economies of scale, especially when other companies join the network and adopt the standards. Therefore, the approach enhances the firm's presence by facilitating the establishment of an optimal strategy in the industry.

Impact of the Internet of Travel in the Future:

Since its introduction to the travel industry, internet technology has not only transformed the way companies operate in this market but it has also had a significant impact on travel. The main impact of this development on the travel industry has been its revolution of travel booking since it has eliminated all linkages and enabled travel booking to be done at the level of individual customers. As previously mentioned, the development and use of internet technology in the travel industry has cut out the traditional travel agencies out of the value chain since customers can do bookings online.

Some of its major impacts on the current state of the travel industry include the fact that internet technologies have provided new platforms for travel agents to book low-cost airlines and integrate them into flexible packages. As a result, it has saved the client money and the time spent in accomplishing these services. Based on an analysis of the past and current impacts of Internet technology on this industry, it's expected that the internet will transform travel in the future. The changes in travel as a result of the increased use of the internet will contribute to huge transformations of the travel industry.