Internet Travel Market Strategy for Small Companies
This paper examines the strategic options available to small companies considering entry into the internet travel market, a sector transformed by digital technology from a traditional agency-based model into a multi-category online marketplace. The paper evaluates prescriptive and emergent strategy routes, arguing that the classic prescriptive approach is most suitable for new market entrants because it establishes defined objectives and supports centrally controlled planning. It further identifies survival-based, learning-based, and network-based strategies as complementary tools for building market presence once entry is achieved. The paper also considers the unsuitability of uncertainty-based emergent strategies for smaller firms, and concludes with a discussion of the internet's likely future impacts on customer buying patterns and the role of traditional travel agents.
- Introduction: Overview of internet travel strategy argument
- The Internet Travel Market: How internet transformed travel booking industry
- Appropriate Strategy for a Small Company Entering the Market: Prescriptive strategy as best entry approach
- Unsuitable Strategy Routes for a Small Company: Why uncertainty-based emergent strategies fall short
- Strategy Routes to Develop the Company's Presence: Survival, learning, and network strategies post-entry
- Impact of the Internet on Travel in the Future: Future effects on customers and travel agents
- Recommendations and Conclusion: Strategic advice and summary findings
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What makes this paper effective
- Clearly defines and contrasts competing strategic frameworks (prescriptive vs. emergent) before applying them to a specific industry context, giving the argument analytical structure.
- Uses concrete categorization of internet travel firms (primary providers, online travel agencies, metasearch sites) to ground abstract strategy concepts in real market conditions.
- Moves logically from market entry strategy to presence-building strategies to future impacts, creating a coherent progression rather than treating each topic in isolation.
Key academic technique demonstrated
The paper demonstrates applied strategic analysis: taking academic frameworks from strategic management literature (prescriptive vs. emergent processes, survival-based, learning-based, and network-based routes) and systematically evaluating their fitness for a specific business scenario. The Intel DRAM example is used effectively as a real-world illustration of the learning-based strategy route in action.
Structure breakdown
The paper opens with a brief introduction summarizing its argument, then provides industry context before evaluating appropriate and inappropriate strategies for market entry. A dedicated section addresses presence-building strategies post-entry, followed by a forward-looking discussion of the internet's impact on travel. The paper closes with practical recommendations and a summary conclusion, following a classic problem–analysis–recommendation format common in business strategy essays.
Introduction
The travel industry is currently undergoing several changes due to the introduction and increased use of internet technologies. These technologies have created numerous opportunities that have made the industry more attractive for small companies. For a small company considering entry into the internet travel market, various strategy routes can be used when developing a corporate and global strategy. The most appropriate strategy for such a company is the prescriptive strategy route, because it supports strategic planning — an important aspect for every business. This approach enables the firm to develop its objectives, goals, and intended strategies through analysis of the business environment and the organization's resources.
As an established internet provider, a small company can use learning-based, survival-based, and network-based strategies to increase its market presence. In this scenario, the firm should not consider the uncertainty-based strategy route because of its minimal regard for 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, particularly on customer buying patterns and the role of traditional travel agents.
The Internet Travel Market
As the modern business environment is characterized by rapid technological advancements, these developments have continued to transform the way business is conducted. One major example of this impact is that internet technology is transforming the US$100 billion global market for travel booking. For much of the previous five decades, many travelers relied on independent travel agencies to book tickets and accommodation for both domestic and international 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 by allowing linkages in travel services to occur at the level of individual customers. While the process is not yet complete, online independent booking has been made possible by internet technology, effectively eliminating traditional travel agencies from the value chain. However, the primary concern remains which strategic route is most appropriate when designing a strategy, particularly for smaller travel companies.
Currently, internet travel service providers can be divided into three major categories: primary providers, online travel agencies, and metasearch travel websites. Primary providers include the main airlines, hotel chains, rail companies, and car rental firms. These providers can be time-consuming to find online, especially when searching for information about availability, special deals, and prices. Online travel agencies, by contrast, are firms that offer a variety of travel services and are primarily driven by a specialist sector. Metasearch travel websites are comparatively newer firms that use complex search engine technology to find and compare all available prices. Because of their differing natures, the profits from online operations depend on the specific category of firm, with each having varying profit margins and sources.
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