1: Routes to take in starting an internet travel company

1.1 The survival-base strategic route

This route puts heavy emphasis on organisations being able to survive a hostile and highly competitive context. It does this through an emergent process, seeking out opportunities in strategy content as they occur. ”Lynch 5th edition p416 STRATEGIC MANAGEMENT”

As explained by Brent Hobermanin the case study that this is a scale game and you’re always facing global competitions. The real success Is to attract enough customers more than your competitors to generate more sufficient business.

And with small internet business the fixed costs of operations in the early days are small no expensive office premises, no major colour printers and brochure costs, direct contact with potential customers, etc.

They are two mechanisms in operation

1 adaption to the environment
2 selections among those present for survival

1.2 Network base strategic route

The network based strategic route forward explores the links and degree of co-operations present in related organisations and industries and places a value upon that degree of co-operation. ”Lynch 5th edition p429 STRATEGIC MANAGEMENT”

They are two major aspects of networks from strategy perspective covered

* Network Externalities

Network externalities-these arises when an organisation is part of an external network that is seeking to standardise some aspect of operations across the industry. The key moment is the tipping point which is reached when the installed base of network users moves from one company supplying the network and away from rival suppliers.

As in a case of Europe when they introduced the Package tours of which it is a complete package covering flights, transfers, hotels and other activities. These packages are famous because they are complicated for individuals to organise, all inclusive of children’s activities, accompanied by comprehensive travel insurance and guaranteed hotel quality.

* Network co-operation

Network co-operations- arises when companies engage in formal agreements with each other for their mutual benefit. Value is added and competitive advantage is developed by the precise combination and co-operation that organisations have with others

As in the case were Air France, Lufthansa and Iberia set up the Amadeus airline computer booking system and British Airways, KLM and Sabena responded with the same system called Galileo system to allow travel agencies and tour operators to buy airline tickets on behalf of individual customer and groups.

How networks add value to organisation. ”Lynch 5th edition Exhibit 11.6 p431 STRATEGIC MANAGEMENT”

Internal networks

* Economies of scale and scope * Development of superior, even unique, knowledge and technologies * Investment in customer service, marketing and reputation * Skills, knowledge and expertise in cash handling, financial transactions and other financial instrument

External networks

* Cost effective logistics, stock handling and other outside transport facilities * Superior purchasing from suppliers * Skilled external sourcing of new technical developments, licensing of new technologies and other technical advances * Strong and stable relationship with government and other influential organisations
Internet is the best tool of networking because it is wide and global and it makes it much easier for a small business in a specialise area to find sufficient clients for a profitable operations by offering its services across national boundaries.

1.3 Learning based strategic route

The learning based strategic rote emphasises learning and crafting as aspects of the development of successful strategic management.it places particular importance on trial and feedback mechanism. ”Lynch 5th edition p434 STRATEGIC MANAGEMENT”

As a small business we need to establish the company purpose and objectives. This means that the travel agents and the management must work must attend workshops and transfer the skills that they have acquired to the junior agencies.

A learning organisation is an organisation skilled at creating, acquiring and transferring knowledge, and at modifying its behaviour to reflect new knowledge and insights.”Lynch 5th edition p434 STRATEGIC MANAGEMENT”

We introduce the double loop learning in the organisation to explain the complexity of the company

Double-loop learning is an educational concept and process that involves teaching people to think more deeply about their own assumptions and beliefs. It was created by Chris Argyris, a leading organizational trainer, in the mid-1980’s, and developed over the next decade into an effective tool.

Source: https://sites.google.com/site/reflection4learning/double-loop-learning

This aspects refers in particular to people and learning occurs more readily were managers and teams have a higher developed emotional intelligence and there is a greater emotional and social intelligence

1.4 SMEs and Entrepreneurship

International consideration

Lynch (2009:441) explains the differences around the world in cultures, social values and economical traditions it is possible that some strategy process may be difficult, if not impossible, to introduce and manage in certain countries.

In some countries the government influences will be important in guiding strategy development

Small and medium enterprises (SMEs) have begun to play a critical role in international trade. Statistics from the Organization for Economic Cooperation and Development (OECD) and other sources indicate that SMEs now account for a very substantial proportion of exports from most industrialized nations. But very little is known about the effect of having an international entrepreneurial orientation, or the role of specificstrategies associated with this construct, on the foreign performance of such firms. Using data from an empirical study of SMEs, we devise a structural model that reveals the role of international entrepreneurial orientation, key strategic activities, and the collective effect of these constructs on the internationalperformance of the modern, internationalSME. These findings and their implications for scholars and managers are discussed. Source: http://www.sciencedirect.com/science/article/pii/S1075425301000424

2: Strategically route most definitely not to employ in a small company

2.1 The Chaos based strategy route

Uncertainty- Based theories of strategy regard a prescriptive, defined strategy is being impossible to develop because the strategic process is unpredictable, unstable and liable to chaotic outcomes. . ”Lynch 5th edition p422 STRATEGIC MANAGEMENT”

Renewal and transformation are vital aspects of strategy. Inevitably they will involve uncertainty. Such uncertainty can be modelled mathematically. However, the long term consequences are unknown and cannot be foreseen or usefully predicted

Uncertainty based approaches therefore involve small steps forward. Management needs to learn from such actions and adapt accordingly

Because of the uncertainty about the future, strategy options and selection between them using the prescriptive approach are therefore irrelevant

The reason why the uncertainty based strategic route won’t work is that the company will be small and needs all the attention it can get we cannot afford to loosen up

We must work as a team because other companies are our competitive so they is no need for competitive approach in the company
We must go with the new innovations when they come we cannot afford to wait and jump after other companies have already done that.

Online travelling we must be able to form partnerships with our competitors in other to succeed and build a strong customer base we should be going out and selling ourselves to competitors so that we get trust from customers and make a good impression.

3 Strategic Route for established internet provider

The network based strategic route

First you check the main providers of on line travel services. ”Lynch 5th edition p427 STRATEGIC MANAGEMENT” * Primary providers: these incudes the main airlines, the budget airlines, the main hotel chains, the main car rentals companies and the main rail companies. It is time –consuming for individuals to search each of the internet sites for prices, availability and specials deals. However, some of the leaders buy headline space on the main internet search engines like Yahoo and Google * On-line travel agencies: they include those that offer a wide range of travel services –like Expedia, Travelocity and Orbitz-and those that have been primarily driven by specialists’ sector like Opodo, which was set up by the airlines to sell travel tickets (but now also hotels and car hire through internet links). Some of the companies are shown in exhibit 11.5 * Metasearch travel websites: these are relatively new and use sophisticated search engine technology to trawl across all available prices and make price comparison. Some of these are listed on exhibit 11:5. Some main brand name hotel and travel sites block metaseach activity

Example of this is the case of Flight sight which is Africa leading online travelling company decided to bring about all major airline companies for domestic and international flights through their network co –operation with other organisation

They collaborated with Companies such as South African Airways, British Airways, Emirates and Etihad for all their inclusive packages for international flights and negotiated with Kulula, Mango and One time for domestic flights

They managed to negotiate with many hotels so that when you book for a nice holiday you also get discounts on their packages and accommodations.

4: Conclusion

4 Internet Impact on travel in the future

The Internet and World Wide Web remain one of the most topical issues for travel agents. Some analysts predict there will be no need for travel agents in the future as consumers turn to the Internet to make their travel arrangements. The aim of this research was to investigate the travel purchasing behaviour of consumers and the future implications for traditional travel agencies. Primary data for the study were collected in the USA, where it is generally recognised that a high level of Internet usage exists. The results suggest that while travel consumers are increasingly turning to the Internet, many are still hesitant to book online. Many travellers surveyed had utilised the Internet for purposes such as obtaining information, but few regularly book online. The main barrier stopping consumers from booking travel via the Internet is the perceived lack of a secure payment method. Other significant barriers stated were a lack of confidence in the technology and a need for a personal service and human interface. The results of this research conflict with suggestions in the literature that travel agents will lose their client base overnight when secure payment methods are developed and consumers become more experienced with the technology. The study highlights that many experienced Internet users still prefer to book their travel via traditional distribution channels and believe there will be a need for travel agents in the future. The study also highlights opportunities that may exist for travel agents, such as the promotion of their services to more informed consumers who have already accessed the Internet.
Source: vm.sagepub.com/content/6/4/368
Thus this shows that in the near future with the latest technology we should be able to approach new future startegies that will accomoated mobile booking and smart phones and smart booking machines

References

1. Lynch 5th edition p427 STRATEGIC MANAGEMENT” 2. Steyn, Schmikl, & van Dyk . Transformational Corporate Strategy Cranefield Module 4 study guide 3. vm.sagepub.com/content/6/4/368 4. https://sites.google.com/site/reflection4learning/double-loop-learning 5. Ehlers & Lazanby third edition strategic management southern African conceps and cases

Executive summary

Buying on-line: choosing a strategy for the internet age

This shows that the internet technology is revolutionising and it is rapidly growing fast on on-line traveling market.
Looking at this case it shows us the importance of having strategically approaches when you are working in this environment .some of the agencies are already having relevant networks contacts with hotels, airlines, car hire rentals and rail operators.
Like the Europeans they already introduced their all-inclusive package which they named package tour which includes holiday package, covering flights, transfers, hotels and other activities.
The downside of this packages is that it doesn’t cover the independent travellers who have limited time and cash. Therefore they likely to go to the internet to book for those short flights, discounted flights and low rented cars.
With the rapid growth of internet booking market opportunities for smaller companies are high the cost of registering and maintain an internet website is small. What need to be done is trying to get as much customers as we can whereas it comes to the strategically approaches that we must take.
This are the following strategically routes that need to be followed when starting a small internet on-line buying company.
These are emergent approaches we must follow * Survival based strategic approach * Network based strategic approach * Learning based strategic approach * SMMEs and entrepreneurship