Brick And Mortar Travel Agency Supply Chain Information Technology Essay

Brick And Mortar Travel elbow room Supply Chain Information Technology EssayIntroductionAt the dawn of the net profit evolution in the 1990s, myriads of communication channeles began realizing the bombastic opportunities that the internet presented to them. They k unseasoned the internet could help them re-engineer processes, lower be, increase profits, up efficiency and effectuality simultaneously, and raise the bar of customer service, alone at the same time. One industry that was quick to model on the internet bandwagon was prompt and tourism, where airline companies had been relying heavily on a ne dickensrk of conk operators to make a motion as a conduit amidst them and the sounders. With the internet, businesses engaged in get and tourism began to directly touch pes with their clients at real-time, low be, and with more than than than personal touch. Thus, it lay near be state that these businesses transitioned from a business-to-business (B2B) brick-and-m ortar model to consumers-to-business (C2B) e-commerce model. umteen sound agents had to level up their trading operations in order to survive the shift towards C2B and away from B2B. days after these brick-and-mortar travel agencies caught on the e-commerce bandwagon, however, critical issues approximately their takeimum carry throughance remain.This paper leave behind thus discuss the strengths, weaknesses, opportunities, and threats that travel agents possess in a C2B environment. It will explore which strengths must be hygienic-kept in order to survive succeeding waves of changes and remain at the crest, which weaknesses must be dealt with to stem decline, which opportunities must be tapped to grow their businesses sustainably, and which threats must be confronted to avoid being sank by competition. This paper will cogitate with a set of recommendations on what crumb be done to leverage the internet as a powerful medium for travel and tourism businesses.Brick and Mort ar Travel Agency Supply ChainOnline culture site wisegeek.com defined brick-and-mortar companies as those that operate out of a physical building, where confessers must invest to hold an office space, purchase supplies and fixtures, and pay for expenses needed to aliment the business operational (What is Bricks and Mortar?, 2010). The site said that brick-and-mortar atomic number 18 traditional companies that have faced fierce competition since the 1990s, when the internet started to boom, from online companies that atomic number 18 based on the internet and which run businesses for a fraction of the traditional costs (What is Bricks and Mortar?, 2010). The site contrasted brick-and-mortar companies with those online to illustrate the pros and cons of the two business models. Below is a tabular summary of the comparisonComparison of Brick-and-Mortar and Online CompaniesBrick-and-Mortar CompaniesOnline CompaniesCustomer TrustHas an return of visibility. Clients may think that a business with investments in buildings, employees, and goods ar less likely to be flee-by-night. stinkpot face questions about integrity. Clients may think that these companies are transitory and croup simply turn their backs on them by refusing to answer phone calls, e-mails, and pertly(prenominal) media for channeling complaints.Owner RiskPoses significant risk for the owners as businesses hire planning, tri-media marketing, and cash-flow to pay for e actuallyday expenses as well as capital outlay.Poses minimal risk for the owners as much of the traditional costs of running a business are non accrued.CompetitionHigh start-up costs and high turnover rates as companies struggle to stay afloat amid the competition from online as well as opposite brick-and-mortar companies.Low start-up costs but high turnover rates if companies cannot find their niche.To signalize the processes of a brick-and-mortar company, it is necessary to look at its supply chain. Mamaghani (2009) in Impact of E-commerce on Travel and touristry a Historical Analysis depict the roles of travel agents, clients, and airlines before the move towards the new medium of the internet. The reference said that during the pre-computerized period, travel agents advised clients on travel destinations, provided marketing materials, and acted as an intermediary in the complex process of arrange travel bookings. Because they were the proverbial middlemen, travel agents were complacent and not keen on take up their serve to cater to all clients (Mamaghani, 2009). According to Mamaghani (2009)The travel market became segmented as travel agents increasingly targeted corporate customers. Travel agents were able to provide value-added go like negotiation of bulk fares and arranging complex itineraries There were two waves of breeding technology that have had a major impact on the industry. The first of these is the reading of the direct reservation systems, such(prenominal) as the American Airlines SABRE system. The second is the development of online sales channels via the Internet.Travelers Online MarketingIn the article Will the Web Replace Your Travel element? published in the Medical Economics, author Murray (1996) said that the internet has increasingly become the better substitute to a travel agent for several reasons web can alert people about travel and destinations that might have escaped agents radar either because they are obscure or do not offer commissions, many travel websites offer extras you wont discover elsewhere, and that the web is increasingly replacing get out marketing materials that can be updated real-time on the internet (Murray, 1996).Because of the many advantages that being online bring to a C2B company, Fred Mawer (2005) said that the people who rely on travel agents alone will soon be a minority. He said that there are particularized advantages to booking travels online financial the internet reduces overheads for companies and man y kill less for online bookings, availability ability to find thousands of choices in a minute, and details good websites provide more detailed and clearer selective information than any other source (Mawer, 2005). Author Carl Gibeily (2002) wrote online traveling has been the only way to fly not just in the United States but overly in the Middle East and other parts of the globe.Expensive Advertisement for Brick-and-Mortar CompaniesOne of the traditional costs that brick-and-mortar companies incur is advertising. According to traveladvertising.com, an online community for travel agents, there are three categories of advertising that agents must use to reach out to their clients or potency clients. These forms of advertising include print advertising for magazines, newspapers, leaflets, poster campaigns advertising media advertising for TV and radio and new media advertising for the internet (traveladvertising.com, n.d.). Brick-and-mortar companies, because they do not have on line presence, concentrate their resources on funding print and media advertising, thus, depriving them of the extensive benefits of new media advertising. Descriptions of each category by traveladvertsiing.com are contained in a tabular summary at a lower placeCost-Benefit Analysis of Advertising for Travel brokersPrintMediaNew MediaTargeted towards a specific readershipLimited shelf conductLimited exposureCostly especially when placed in premium mankindations that target a specific audienceTargeted at a large sal sodaulation and wide geographyTarget population cannot be change down as ad will be exposed to diverse people with varied income levelsCostly and cannot be afforded by small-scale agents with no national or international presenceTargeted at a very large population across countriesTarget population can be narrowed down by providing contents that are relevant to the audienceRelatively inexpensive as costs include ad design, website development, and system maintenanc ePros and Cons of C2BAccording to William Sieglein (2000), C2B businesses that allow people to shop online provides flexibility, better prices and more selections for consumers but presents a great concern for security. He said that the exchange of personal information such as credit card number, home address and phone numbers pose threats in purchasing products off the conception Wide Web. As information travels through the internet, it may be intercepted, stolen and used for individuation theft.To provide a secured business environment online, C2B companies must ensure that that sensitive information that consumers provide online will be powerfully protected from unauthorized parties. Companies selling products online must assure consumers that the information is stored on their secure, well-configured unafraid zone of their network. These zones, most often referred to as demilitarized zone, should have secured firewall configurations. Strong access controls should excessivel y be in place, and this includes user identification and authentication. Server hardening, data storage encryption, and intrusion detections must likewise be estimable persistently.What can be the repercussions of not protecting your C2B business environments? A handful of adverse effects that can impinge on the growth of a company twain on the short and long term. First, temperament of the company would be dragged into the mud. Reputation is a valuable resource of online companies. If a company is deemed to be pleasing in deceitful transactions or is unable to block assertable deceitful transactions in its website, then consumers can easily and rather swiftly stay clear of the website. Consumers can rapidly deal out news about their bad experiences with the company to thousands of other consumers and potential consumers online via social networking sites and consumer feedback mechanisms. These happenings will subsequently consequent in lessened patronage for the site.Second, the company can be embroiled in a prolonged dispute settlement or costly legal battle whenever complaints about the security features of its site pop up. Dispute settlement and court cases will of course drain the company of precious resources. It can also tarnish the companys name in case that the proceedings conclude that the companys systems were not fail-safe.Third, leaks in the security features of a C2B can channel confidential information to competitors, allowing them an inside look into the companys processes and giving them the chance to spoil operations to their advantage. As a consequence, companies will have to shed money to shed money to contain the damage, inquire the incident, fortify security measures, and pursue legal actions against parties found to have breached the companys protection measures.Because the internet is a public place that is easily accessible by many people, C2B companies must provide their consumers several options to protect their individualis m and other personal information while transacting in the companys website. According to Dholakia, Dholakia, and Mundorf (2002), consumers may control the amount of information they make public on the internet by using four strategies identifiability, confidentiality, anonymity/pseudonimity, and secrecy. The strategies are described in detail below4 Consumer Strategies for Protecting Their Identities OnlineAccuracy of person-to-person Information ExternalizedAmount of Personal Information ExternalizedHighLowHighIdentifiabilityConsumer is willing to disclose all personal information with truth.Businesses can acquire high degree identity knowledge on the consumerAnonymity/PseudonimityConsumers disclose and fabricate all kinds of information that are supposedly about themselves on the internetConsumers are avoiding identifiability and trust is not give to the C2B websiteWebsite should not trust the information provided for by the consumerLowConfidentialityConsumer gives little perso nal information with high accuracyThe sites brand equity, reputations of the marketer, favorable endorsements and other elements may mastermind the consumer to trust the websiteSecrecyConsumers may share very little and potentially inaccurate personal informationThe level of accuracy and willingness to share information online clear pose some serious problems for C2B companies. For instance, consumers may use information of another person in entryway into transactions. In this case, it is very important that C2B travel companies state in its sales terms of conditions what types of responsibilities, if any, it will own up to.C2B Case Analysis Priceline.comPriceline.com Incorporated is a multinational company listed in NASDAQ that provides online travel services across Europe, North America, the Middle East, and Africa (priceline.com, n.d.). Its main purpose is to allow clients to save on airline tickets, hotel rooms, rental cars, vacation packages and cruises than any other Inter net travel service (priceline.com, n.d.).According to Chan, Lee, Dillon Chang (2001, p.10), Priceline.com introduced to the world a unused online application called the demand collection system, which allows consumers to bid for the prices of unsold airline tickets by naming the price for which they indigence to buy the tickets. By pioneering this consumer-oriented, dynamic, and customized pricing system, Priceline.com reinvented traditional commerce that often imposed fixed prices on consumers.The authors categorised the company as C2B in which consumer specifies the requirements to a business, which provides a product that gets these requirements. These requirements could be as simple as an acceptable price, or could involve considerable customization of an existing standard product, or creation of a new product (p. 8). The business model of Priceline.com is different from others that are into consumer-to-consumer, business-to-business, and business-to-consumer. The followin g is a tabular summary of dissimilar online business models (Chan, Lee, Dillon Chang, 2001, pp. 6-8).Online Business Model MatrixBusinessConsumerBusinessB2B TPNBuyer and vendor are business organizations.Can be buyer-oriented, seller-oriented or a virtual marketplace.B2C Amazon marketer is a business organization while the buyer is a consumer.Emulates physical retailing and is often called electronic retailing.ConsumerC2B PricelineConsumer is a seller while buyer is a business organization.Consumers set out requirements to businesses, which then attempt to satisfy the requirements.C2C eBaySeller and buyer are consumers.Virtual communities are formed where members host auctions or bid for products.Many things can be inferred from the business model of Priceline.com. First, the online travel service company performs the traditional roles of a travel agent. The huge difference between traditional travel agents and Priceline.com however is that the latter harnesses the huge potential s of the internet. Priceline.com uses the new media to deliver services in a much more efficient manner than a traditional travel agent and on a wider scale. Note that traditional agents are mere intermediaries who act as go-between, taking orders from consumers, presenting the orders to businesses, component part consumers decide on what to buy according to their budget and tastes by presenting varied options. Priceline.com does just that, yet in a much quicker manner.Second, Priceline.com empowers the consumers and allows businesses to stay in touch with consumers desires. Traditional travel agents may opt to cater to only a few groups like corporate clients that are sure to give them a steady flow of huge income. They may choose to disregard small-time infrequent travelers. With Priceline.com, however, all kinds of consumers are entertained. By specifying travel requirements and details, consumers will get a response from various travel companies that can meet the requirements a nd details they specified. Consumers are also empowered because they can sway businesses to provide products and services according to specifications and demands. Businesses also become in tuned with consumers demands in this type of business model. Because they learn of consumers demand real-time, they can rapidly customize products and services to respond to their markets.Third, Priceline.com presents enormous challenges in terms of technology. The company relies heavily on the internet in terms of providing services. Thus, it is imperative that it protects its systems against attacks, frauds, and phishing activities to safeguard the integrity of its operations as well as gain and keep the trust of its partners. Disruptions and downtimes caused by any technological problems will also cost Priceline.com. It should therefore continuously perform and maintain risk management programs.Review of LiteratureInternetThe advent of online business was made possible by one medium, the intern et. The development of the internet started in the 1950s when the Defense Advanced Research Projects Agency, DARPA, was asked by the Department of Defense to develop a system to allow the United States to mount a tabulator attack in the event of a Soviet Union nuclear first strike (Boudreaux Sloboda, 1999). By 1965, DARPA sponsored A Cooperative Net-work of Time Sharing Computers that became the predecessor of the internet. Over the years, scientists, researchers and hobbyists contributed their talents to the development of the internet to become the capacious network that we have today (Boudreaux Sloboda, 1999).E-CommerceThe internet has created for businesses a level-playing field where the midgets can compete with the titans, where the start-ups can exposit for a fraction of a cost to challenge the old-timers. Indeed, the internet is a grand stage for entrepreneurs to case their bright ideas to the business world.Joshi and Yermish (2000) mentioned five occurrences that have been shaping the Internet as a business world. These occurrences are facilitating the transition towards the new media in terms of offering and availing of products and services. The authors identified these occurrences as (1) the separation of the information about products and services from the physical products and services themselves, (2) products and services are becoming information-based, (3) internet bridges distance between consumers and business organizations, (4) internet is a medium for rapidly responding to consumers and markets, and (5) internet allows consumers to become agents of marketing (Joshi Yermish, 2000). The following is a tabular summary of descriptions for each occurrenceOccurrences that Have Made the Internet a Business WorldIncreased Separation of the Flow of InformationInformation about products and services is distinct from actual products and services. Moreover, information travels to consumers and buyers faster than the provision of the physical ord ers themselves.Increased Focus on Information FlowsProducts and services are technologically intensive and may not be necessarily material objects. They may be delivered solely on the internet, from the internet or to the internet.Reduced DistanceThe third aspect to the new economy is the shrinking physical distances. In the new economy, proximity requirements have been almost totally removed as (in theory at least) everyone is connected with everyone else.speedy ResponseBusinesses are provided with real-time feedback from consumers while consumers get swift response from businesses. Rapid response allows businesses to be consumer-focused, service-oriented, and flexible as they are fed information about their performance and the competitions operations in a fast manner.Using the Customer as a Marketing AgentBecause internet is a medium where consumers can provide feedback and get response real-time, consumers may act as a marketing agent for a company. They can easily talk about fav orable services and official experiences they have had with a company and then go on sharing these experiences or talking about these services online, where thousands of people may be able to chance upon their insights.Matthewson (2002, pp.45-46) sets out the steps in achieving scoop up practices in online buying process where consumers go to the companies to buy goods and services customer acquisition, segmentation and targeting, promotions, online ordering, order fulfillment and after-sales support, and up-sell and cross-sell. Although the internet is a powerful medium, harnessing it does not guarantee success. Brynjolfsson Urban (2001, pp. 121-122) outlined practices that can make companies lead or lag in the industry. Some of the leading practices include focusing on matching take over technology to business scheme and customer requirements ensuring that appropriate technology capability and capacity were internally in place or available through partnering building technol ogy platforms to support Internet, intranet, and extranet applications, with a view to reinforcing, improving, or changing the value propositions of their core business early adoption of Web technologies to achieve a war-ridden advantage and learning the technology in the context of developing an information or marketing strategy (Brynjolfsson Urban, 2001, pp.121-122). Lagging IT practices include having the IT department responsible for e-business developments having underfunded and undervalued IT and e-business developments treating IT and Web-based technologies as a cost center rather than a profit center and positioning the CIO as a specialist functional manager (pp. 121-122).Travel Agent SWOT Analysis in C2B ModelIn a C2B business environment, travel agents with online presence all the way possess a great deal of strengths. However, with competition from small-time and big-ticket players ever-present, travel agents must ceaselessly be on the lookout. This is because on the online environment, other travel agents can easily duplicate their strengths, bank on their weaknesses, seize opportunities faster, and thwart threats more formidably, all in swift turn-around time.Below is a tabular abbreviation of the SWOT of travel agents operating in an online business environment.SWOT AnalysisInternalExternalmaximizeStrengthsThe strengths of a travel agent in an online C2B model include abilities to rapidly communicate with consumers, get their travel requirements, deliver these requirements to businesses, receive feedback from consumers for services and products delivered, and create possibilities for future collaborations.OpportunitiesThe opportunities would include the chance to cater to untapped segments of both the local and global marketplace.MinimizeWeaknessesThe weaknesses would include the need to respond to consumers and businesses 24 hours a day and septenary days a week at quick turn-around time.ThreatsThe threats would of course include security c oncerns and competition from other C2B that continuously enter the industry.ConclusionInternet is a potent tool for surviving and competing in the travel industry. However, companies and agents must know how to use this medium to their advantage as the internet has its kinks that can spell big troubles. To stay afloat in the travel industry, agents and companies must bank on the strengths of the internet and develop strategical plans that would help them sustain operations both in the short and long term (Chopra. Van Mieghem, 2000).