Travel Agency Management

Vertical integration is a concept in which a company develops or acquires production units for outputs which are

You should develop information provided in P1. You need to consider why these links exist and why relationships are formed, explaining how they affect the organisations concerned. E.g.

People open stores for the people who immigrate to seek better wealth. However, the local supply couldn’t provide a diversified market for the local industry, the inelastic demand and high consumption power stimulated the growth of the vertical integration simultaneously. Vertical integration refers to an strategy where a company expand its business operations into several steps but on the same production, in other words, the company owns the distributor/supply chain. What is good about the vertical integration is that vertical integration can help enterprises reduce costs and improve efficiencies by reducing transportation expanses and turnaround time.

Vertical integration is when one firm joins with another at a different stage of the same production process. Forward Vertical is when the other firm is at a later stage and Backward Vertical is when the other firm is at an earlier stage. Vertical integration as a whole allows for a firm to control key stages of the production process; guarantees access to a market; and gains control of supplies. Companies such as Zara and American Apparel are vertically integrated, especially at key stages of

New Frontier Touring is a tour booking agency based in Nashville, TN. They represent artists from the indie-rock, Americana, acoustic roots, folk, and jazz genres. With over 75 artists on their roster, technology is an important aspect of the company and keeping the business running. On a normal day, there are ten booking agents, two contract department workers, and at least two interns there at a time, each one on their own computer using technology.

* Travel agencies: Travel agencies have strong relationships with the cruise industry as they book around two thirds of their cruise. Although this percentage is declining due to the growth of consumer knowledge and technology the percentage of cruisers using travel agents is relatively strong. (UCLIA)

Growing through integration is concerned with mergers and takeovers of businesses. There are a number of different ways of integrating: Horizontal (same industry, same stage of production), backward vertical (same industry towards a supplier), forward vertical (same industry towards the customer) and Conglomerate (different industries).

Vertical integration – when you choose to produce raw materials and/or distribute finished goods themselves rather than rely on independent suppliers, factors and agents for these tasks

Horizontal integration involves buying out other companies and taking over one single step of an industrial process. It establishes a monopoly because, with horizontal integration, everyone must go the company that has monopolized that step.

Vertical integration is a business growth strategy for economics of scale. It is typified by one firm engaged in different parts of production example; growing raw materials, manufacturing, transporting, marketing, and/or retailing to expand business in existing market for the firm. It can function in two directions both forward integration and backward integration.

Forging a new horizon of traveling, Allegiant Travel Company is an airline company that offers airline travel from smaller cities to vacation destinations, for competitively lower prices (3). What makes this company different from others is their plan itself - most of the cities they fly from rarely get attention from the larger airlines (4). In addition to their cheap fares, Allegiant Travel Company offers bundle deals with hotels, rental cars, and other amenities that might be useful when traveling (3), a major factor in the purchasing decisions of their customers, and ultimately the company’s economic state.

Even if the company can have a strong position against its buyers due to the business characteristics the close relationship that the customers have with the travel agencies gives their a greater influence over the ticket price.

Backward integration is a type of vertical integration in which a company takes control over its suppliers. It is a form of acquisition of the intermediary players involved in supplying the raw materials used in the production process of the firm. Raw materials, intermediate manufacturing and assembly are controlled by the firm whereas distribution to the end customer is done by a third party company. In this way, company increases production efficiency and gains a competitive advantage by lowering its production cost.

The buyers of the services of travel agencies are consumers, that is, individuals and businesses. For this industry we are dealing with a small degree of concentration, due to the wide range of services.

From the outside, a travel agency should look inviting to the prospective customer, whether it is in a town centre high street location, a city suburb or a small country town. Certain aspects of the travel agency will be fixed, for example the size of the overall shop frontage. Kings travel is positioned well in relation