Business / Business Innovation and Entrepreneurship
Introduction
The tourism industry has experienced significant growth of great nature over the last three decades. This growth could be mainly attributed to the benefits of globalization characterized by a borderless world and the increased dissemination of information about the major tourist spots of the world, with the Asian region being no exception. As such, companies in the tourism industry are in the brink of harnessing the potential of a very lucrative market with trends going towards the increases in the number of tourists in the different countries of Asia and in which Limousine Travel and Tours Incorporated could capitalize. Limousine Travel and Tours Incorporated is a company engaged in travel and tours offering tour packages and airline tickets in a number of destinations in famous tourist spots in the Asia-Pacific region. The boom of the tourism industry in this region provided the spark for the growth of travel services presented by travel agencies. Hence, a great opportunity is presented for the company given the huge boom of the global tourism industry and moderate competition in the market.
Limousine Travel is established in the heart of Bangkok, Thailand to take advantage of the success and expansion of this industry captures the opportunities offered by sustainable arrival of European and American tourists in the region. The company intends to offer adventure and travel packages to tourists with specific focus on the tourist destinations of the Asia-Pacific region. Limousine’s core services will initially include custom packages based on the specifications of clients, pre-arranged tours, reservations for lodging and travel consultations and other related travel services. The firm is targeting to differentiate itself from other business players by providing Internet empowered tourism services within its area of operations in the Asia-Pacific region.
Objectives of the Company
The business strategy of Limousine Travel and Tours will focus on providing the needs of its clients and satisfy them through exceptional service quality. This core objective could be done by recruiting professional people who would provide superior and customized travel packages that caters to the specific needs of clients. In the long-term, the company’s marketing campaign will augment the awareness associated with its tourism services in different segments of its target market. Specifically, the new venture could achieve this by establishing the major benefits of a moderately competitive tourism market with clients to be offered with the chance of focusing on their major activities while the aspect of transporting them to their destinations are fully satisfied by the company. Professional marketing materials will be produce for the purpose of reflecting the intended reputation and image of Limousine Travel and Tours. Likewise, the company will position itself as a high quality operator in the business of commercial transportation that offers reliability, enjoyment, customer-need fulfillment, and good image. The firm is also intending to build good rapport with all tourism stakeholders like travel agents and hotels to further expand its operations in the target market.
Limousine Travel and Tours also plans at the production of well-designed promotional materials and brochures that will allow clients to have full idea and understanding about the types of tourism services being offered by the firm. Likewise, informative and well-done brochures, business cards and fact sheets have significant effects on the contemplation of clients that utilize the company’s services. Therefore, these marketing activities could significantly contribute to the increases in the sales of the services of the travel company. Overall, the company is intending to achieve the following general objectives: (1) Continuous offering of enjoyable trips or excursions with considerations of the budget and schedule of the clients (2) Produce fully satisfied clients all of the time (3) Create a presence in the market that ensures both short and long-term profitability for the organization and (4) Full commitment of supporting the development and growth of the tourism industry and the communities where the company has operations.
The Company’s Mission Statement
The mission of Limousine Travel and Tours Inc. is to provide the relevant needs of both foreign and domestic tourists by means of the quality of services being offered to them ranging from airline ticketing, guide to destinations, competitive rates on vacations, and the security of their travel with the help of various transportation facilities used by the company. Limousine Travel is also aiming at fostering lasting relationships with clients through the provision of excellent customer support and quality training and be distinguished as one of the leading travel services company in the region. Meanwhile, the firm’s goal is to grow profitably to serve more customers and expand to be able to create employment opportunities to communities where we operate.
Products and Services
Limousine Travel and Tours offers full range of services related to the needs of both domestic and European and American tourists to include airline ticketing, tour guiding, rental of transportation facilities for local tours, briefings on pre and post vacations, secure travel on selected destinations in the region and directory of services related to every activity and travel destination. With the growth of the tourism market in the Asia-Pacific region, the company is expecting yearly increases on demand for its services related to the various needs of these tourists.
Management Team
The company is primarily headed by an able Chief Executive Officer who supervised its major operations. In addition, the company’s competent staff provides competitive support to clients and tourists in terms of their needs of services related to travel. In particular, employees were involved in the processing of transactions of tourists via booking their flights, providing their request on reservations of destinations and various services related to the guiding of tours and customer support.
Market Research/Industry Analysis
With the recovery of emerging market economies in the Asia-Pacific region, the company could be able to capitalize with the booming opportunities presented by the tourism and travel industries. Various factors will be included in this market analysis that will provide full knowledge about the growth potential of the company in its chosen industry or business.
Social and Economic Factors
The Asia-Pacific region is composing of more than twenty countries with China and Japan at the forefront of the region’s economic power. With the recovery of these economies from the recent economic recession, these countries are expected to take-off in terms of the increase in the number of tourist arrivals from both American and European countries which were hardly hit by the economic recession as they search for cheaper way of spending their vacations or tours (Weiermair and Mathies, 2004). This trend would give way for travel agencies like Limousine Travel and Tours to flourish. Asia is predicted to continue its momentum as the global economic leader with the forecasted continuous economic growth of the four largest economies of India, Japan, China and the Republic of Korea. The continent is also expected to have the most number of cities by 2020 with a population of more than 10 million. Other trends in the Asia Pacific region include the transformation of travel as an activity based interest than a destination based interest. Countries like India and China are also expected to be the main contributors of the tourism industry in the region allowing air travel or airline as a low cost business. In particular, the expansion of low-cost airlines makes both inter and intra regional travel more inexpensive that would definitely alter the patterns and habits of travel of people from other regions. Transactions done online will also pave the way for the transformation of travel agents into travel consultants (UNWTO, 2006). These positive trends of the tourism industry will definitely affect the manner Limousine Travel and Tours operate within the industry.
Geographic Area
Limousine Travel and Tours Inc. is currently operating its main office at the heart of Bangkok, Thailand, one of the most visited countries in the region in terms of tourist arrivals due to its attractive destinations. The company is specifically targeting to offer its range of travel services to European and American tourists who are likely to travel in tourism priority areas of the firm in various territories in Thailand, India, the Philippines, China, Japan and Malaysia and other destinations in the Asia Pacific region. Cities passing this region include Bangkok, Kuala Lumpur, Manila, Jakarta, Beijing, New Delhi and Tokyo which are considered to be well-developed cities for travel and tourism.
Market Size and Description
The size of the Asia-Pacific region was too huge that it covered two continents of Asia and even South America. As such, the target market of the firm can be described as a really competitive environment making other players enter and exit the market in a rapid pace. Meanwhile, Bangkok, where the company is operating, is considered as the largest city and capital of Thailand. Bangkok is also famed as one of the world’s top destination for tourists making it the main tourist gateway for the country (United Nations Environment Programme Industry and Environment, 1998). In this sense, the company is strategically situated in a country recording a huge traffic of tourists every year. The city is known for the grand palaces and its river districts were residents uniquely transact with the used of the rivers. Major facilities can be found in the city of Bangkok like modern airports, universities and colleges, and modern medical centers equipped for the specific needs of tourists. Focusing on the market presented by Bangkok, it can be stated that the five million population of the city based on 2005 census speaks well for the huge opportunity presented by domestic tourism in the area. On a regional basis, the Asia-Pacific region is a multifaceted composition of countries with unique destinations making them attractive in the eyes of both European and American tourists which we consider as our main market. These tourists tend to visit the beautiful beaches in Thailand (Phuket), the Philippines (Boracay islands) and Indonesia (beaches in Bali). They are also attracted with the beauty of China (Great Wall), Japan (its cities and nightlife) and in Malaysia (its Buddhist temples).
Market Definition
Based on the WTO’s or World Tourism Organization’s Tourism 2020 Vision, arrivals of global tourists is predicted to reach to over 1.56 billion at the start of 2020. Of these global arrivals being predicted for 2020, 0.38 billion tourists were considered as long-haul travelers while 1.18 billion will be intraregional tourists. The Asia Pacific region was also predicted as the top two receiving destinations with 397 million expected tourist arrivals after Europe (Conrady, 2009). As such, the market presented by the Asia-Pacific region is a great opportunity for businesses like Limousine Tours and Travel since it is first and foremost concerned with the basic needs of arriving tourists. In addition, the world tourism industry is expected to grow at 4.1 percent per annum which is faster than the current growth of the world economy at 2.4 percent (World Tourism Organization, 2001). The region of Asia and the Pacific is also expected to receive the most number of tourist arrivals surpassing the capacity of the Americas which is expected to decline at the receiving end due to the financial crisis.
Market Opportunities
Focusing on the opportunities presented by the boom of European and American tourists’ arrivals in this region including the prospects presented by the local tourism market, the company will be able to maximize its existing resources with the offering of competitive rates to them that will surpass the travel services offered by the company’s competitors and that will satisfy the needs of the customers at the end of the day. To be specific, most arriving tourists want professional services from their chosen travel agency since a number of them are adventurous in nature as they choose destinations that make them feel the challenge of being out of their respective home countries.
Business Strategy Analysis
Business strategy is defined as the long term approach in the implementation of an organization’s business plan to be able to achieve its stated business objectives. It is also defined as the plan or pattern with the capability of integrating a firm’s major policies, actions and goals into an interrelated whole. Business strategy also refer to the scope and direction that an organization wants to attain in the long-term by means of taking advantage of company resources given a competitive environment, meeting the needs of consumers or markets as a whole and fulfilling the expectations of stakeholders. Well-established business strategies support the proper allocation of the organization’s resources with the goal of viably and uniquely position the firm’s shortcomings and internal competencies, adjustment to probable changes in the environment, and anticipation of business moves of smart opponents in the market (John and Gillies, 1996). Majority of the definitions of business strategy emphasize the involvement of the general direction of the business enterprise. For multinational corporations, questions on location or what countries will the company operate is also considered. Michael Porter defined business strategy in the aspect of achieving competitive advantage wherein the multinational corporation is expected to achieve greater competitive advantage than domestic businesses.
The environment of a business shapes the manner with which strategies and decisions within the firm are being formulated and implemented. Various types of business strategies include low cost leadership, differentiation of a product or service, customer relationship strategy, and the network effect strategy. Meanwhile, the process of formulating business strategies and ensuring their known competencies and resources is known as strategic audit. The phases of a typical strategic audit include resource audit, value chain analysis, core competence analysis, performance analysis, portfolio analysis and strengths, weaknesses, opportunities and threats analysis. When all of these processes were successfully conducted by the firm, implementation of outlined business strategies is the next crucial activity.
Formulating business strategies is one of the pivotal tasks of managers especially in a small business environment. In particular, the managers or CEOs of small businesses are primarily engage in the formulation of effective business strategies. They are also involved in strategic decision making including its implementation. Therefore, it is essential to study and learn how managers of Limousine Tours and Travel deal with the formulation and implementation of business strategies. Strategy formulation is known as the initial stage of strategic management and is often linked to long range or strategic planning concerning the development of the firm’s mission, strategies and objectives. This stage is specifically composing of three major elements namely: the development of vision and mission of the company, development of the strategic objectives of the organization and the outlining of overall business strategies. Defining the company’s corporate mission is the initial step towards the effective formulation of business strategies.
The corporate mission is referred to as the primary reason for the existence of the firrn and is considered as the fundamental element of corporate philosophy (Schroeder and Mörling, 2006). Statement of a specified mission is crucial in the promotion of shared aspirations among employees and managers conveying an image to the public and to vital stakeholder groups in the task environment of Limousine Travel and Tours. The next step in the formulation of business strategies would be the specification of achievable and measurable objectives. Business objectives are known to be the outcomes of any activities that are planned and are engaged in the conversion of mission statement into specified goals shaping the general activities and direction of a small business. Development of strategies is the final step in the strategy formulation.
SWOT Analysis of Limousine Travel and Tours
Given the complexity of the current environment of business where competition is highly apparent, it is thus imperative to establish and position people and resources which have the capability of developing the firm’s strengths, determine the weaknesses, opportunities and threats that could hinder the company growth and expansion. The strong management strategy is a huge help that is desirable to expose the company in the doorway of the global markets. Since the global economy knows no boundaries, the high point in the open market and in the arena of the global market has gradually increasing. The implausible advances in technology has made parallel with the transformation of the economy. Its gradual transformation has gone beyond borders that barely spill in the process of increasing social and environmental specification of people. Furthermore, the complex aim of advancing the changes to lead the firm’s ecological milieu has speed up the ground. The interconnection and interrelation even in the extent of definite feature has moved towards the assumption of the possible terms in the future. The modern techniques have contributed to maximize the trends of countering the various base of difficulty. In order to respond and encourage the diverse view of today’s calling for strategic management, it has pointed to study the most critical aspects of development, for only such manner could oversee the significant and unwanted factors that are necessarily to be sustained and trashed, respectively.
SWOT analysis is usually the initial stage in the formulation of business strategy. It is the short term for strengths, weaknesses, opportunities and threats which is generally aimed at the careful assessment of the company’s internal strengths and weaknesses and external threats and opportunities. In this type of analysis, the best strategies will determine the accomplishment of a firm’s mission by means of utilizing a firm’s opportunities and strengths while avoiding external threats and correcting internal weaknesses (Griffin, 2007). The strengths of the organization are referred to as the capabilities and skills that empower it to execute and conceive its business strategies. Meanwhile, the weaknesses of the organization are known as facilities and skills that are considered hindrance to the firm in choosing and implementing business strategies that carry its mission. Opportunities are defined by the organization as areas that could produce higher performance for the employees and managers of a firm or an organization while the threats are known as areas that augment the difficulty of performing an organization’s tasks and objectives and that could affect the competitiveness of the firm.
References
Analoui, F., and Karami, A., (2003). Strategic Management in Small and Medium Enterprises. London: Cengage Learning EMEA.
Conrady, R., (2009). Trends and Issues in Global Tourism 2009. New York: Springer.
Griffin, R., (2007). Fundamentals of Management. London: Cengage Learning.
John, R., & Gillies, G., (1996). Global Business Strategy. London: Cengage Learning EMEA.
Schroeder, J., & Mörling, M., (2006). Brand Culture. London: Taylor & Francis.
Schuler, R., & Macmillan, I., (1984). Gaining Competitive Advantage through Human Resource Management Practices. Human Resource Management. http://www.rci.rutgers.edu/~schuler/mainpages/GainingCompAdvantageHRMpractices.pdf
Stair, R. Reynolds, G. & Reynolds, G., 2009. Principles of Information Systems. 9th Ed. Belmont, CA: Cengage Learning.
United Nations Environment Programme Industry and Environment (1998). Ecolabels in the tourism industry. Geneva:UNEP/Earthprint.
UNWTO, OMT, & IOHBTO (2006, June). Mega-Trends of Tourism in Asia-Pacific. http://www.tourism.wu-wien.ac.at/Summit/Material/megatrend_in_asia-pacific.pdf
Weiermair, K., & Mathies, C., (2004). The tourism and leisure industry: shaping the future. London: Routledge.
World Tourism Organization (2001). WTO Long-Term Forecast Tourism 2020 Vision. Tourism Market Trends: World Overview & Tourism Topics. http://www.tpdco.org/pdf/Tourism%202020%20vision.pdf?dynawebSID=6d8
Tiwari, R., (2007). The Role of Offshore R&D in Strengthening Competitive Advantage: Chances and Challenges in India. Proceedings of the Third Rexroth Doktoranden Kolloquium, Lohr Am Main, Germany.
2018/5365
