Tourism Business Strategy

Essay by cazforevaUniversity, Bachelor'sA, March 2009

download word file, 11 pages 4.2

"Change presents an opportunity to examine the strategies adopted by companies in the same industrial sector in response to external stimulus" (Kangis and O'Reily, 2003)The paperStrategies for the twenty-first century A period of uncertainty A major question mark hanging over airlines at the start of the new millenium has been whether the early years will be marked by a cyclical downturn of the industry's fortunes as happened in each of the three preceding decades. The signs were not good. In 1998 the financial results of the world's international scheduled airlines began to worsen following the very good years of the mid-1990s. In 1999 profits for these airlines dropped to US$1.9 billion from $3.1 billion a year earlier. Significantly higher fuel prices, growing overcapacity in key markets and falling yields appeared to be the root causes of the deteriorating financial performance. Unless at least one of these three trends can be reversed a further deterioration in the early years of the new decade is inevitable.

It remains to be seen whether the downturn, if it worsens, will be as severe and painful as that of 1990 tohis paper analyses the airline and explains how some major airlines have been faced with competition by a number of "new entrant" airlines, generally providing "short haul" and/or point to point service. The new entrants have been able to offer extremely low fares because they utilize non-union labour and for the most part avoid interlining operations, causing extreme pricing pressure on the major airlinesStrategies of travel agentsStrategies of airline industry1. Low cost airline - revolution in the airline industry(Ryanair, advents of internet, impact of 9/11 little effect in the change of market place)Parallel worlds combined, particular external stimulus (internet) gave rise, product development, Levitt looked at the fast food sector(manufacture)Barriers to entry- essentially...