Paradise Vacation Case

1967 WordsApr 8, 20138 Pages
Key Decisions: * Should Leduc agree to Air India’s offer? * What’s the company’s competitive strategy for 2008/2009? * How to respond to FunTours’ expansion and aggressive pricing strategy? SWOT Analysis: Paradise holds strong buyer power which enables it to bargain for lower price and discount. As market leader and Quebec company, Paradise can promote itself through reminding customer about company hisotry to strength their preference and loyalty . The weakness lands at that Quebec is the only market in Canada; the collapse of one location will damage the entire business. The threat mainly lands at pricing competition from FunTours. Competitive Analysis and Consumer Analysis: Because Paradise has its main market in Quebec,…show more content…
Appendixes Decision criteria: * Provide short-term viability * Provide long-term sustainability Alternative Evaluation * Cost cutting through partnership with Benoix and cost structure change to start a price war with FunTours. * Setting pricing strategy as price war and cutting cost through vertical integration. * Sell its packages through Internet distributors exclusively. * Offering packages to more remote and less developed destinations. * Base and Mid package will be sold through internet solely; Premium package will be sold through both agent and internet by 50/50; at the same time lowering wholesale price by 5% and asking Benoix Air for 5% discount on the flight. Alternative 1, comparing all other 4, gets the least revenue (32,540,428). Although it is feasible in short-term and might drive FunTour out of the market, it does not concern with the obsolete of travel agents. Giving the negative revenue for the base segment (see Exhibt 2), it is not long-term sustainable. Moreover, even if the competitor is eventually driven out the market, Paradise will have to raise the price again in order to get back on its previous profitability; Paradise runs into the risk that the customers will feel cheated and uncomfortable with

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