Restructuring For Growth, Research Paper Example

Introduction

A supply chain is a coordinated system of activities, people, organization information and resources that are involved when a product or a service is moved in a virtual way from a supplier to a consumer. In travel industry, there are constant changes with time such as the way the business is conducted, the way the services and products are sold and how an individual link of the supply chain connects and works with others of the same chain.  The supply chain in the travel websites involve the connection among airline, hotels, cruise lines, car rental and event tickets for the customers who are willing to make trips to different places in order to meet their wants and needs.

Initially, the travel websites were operating at a “brick and mortar” environment. Such travel agencies had opened up brick and mortar places with offices conveniently located in different cities so that the travelers could utilize the services in planning a trip. The offices provided personal services and information for those who wished to travel for either business or personal reasons. In the supply chain, there was a face to face interaction between the customers and the travel agents. Customers walked into these offices in order to organize and purchase the travel services. The agents also had the opportunity of marketing other types of travel services to their clients (Tina 2002).

In order to serve the changing needs of the travel industry, it was necessary to look for a collaborative approach that uses technology. The supply chain was modified to counter the increased competition. This was done by use of virtual travel agencies and travel websites in which the consumers could easily book their travel. In this way, the suppliers of the services offered by travel agencies (tour operators, airlines, cruises, car rentals and hotels) could sell these products and services directly to the consumers and thus not including the travel agents in the supply chain. They started using websites in promoting online sales.

Travelocity.com is the leading in operating online travel websites in which the travelers control their reservations, bookings and research information on their destination. It provides a source of reservation information for more than 50000 hotels, 700 airlines and 50 car rental companies. On addition, it also offers 6500 packages and tour and cruise departures. It offers its services in many countries.  Travelocity.com arose as a result of a merger with Preview Travel which was another leading online travel service. This was after Travelocity had separated from a parent company, Sable which retained 70% of ownership while Preview Travel owned 30%. Sable continued being the principal technology partner of Travelocity, handling their online transactions. This merger made Travelocity to become a third most visited electronic commerce site and was preferred in all major internet protocols like yahoo (Bianco 2002).

The losses that both companies incurred prior to their merger made them to pursue a marketing strategy so as to build market share. Their major competitor was Expedia. According to Michaelson (2002), Preview travel and Travelocity made an agreement with Priceline.com in which the three companies decided to refer customers to each other’s sites and also collected referral fees after purchases were made. This kind of arrangement, “the name-you-own-fare online service”, enhanced the expansion of their services for those customers who applied for cheapest fares for Travelocity and preview travel.

After the closure of this merger, the new Travelocity launched a campaign worth $50 million (both television and print) so as to gain new customers. The complete integration with Preview travel resulted into introduction of a redesigned website. New features were included such as a group shopping tool where travel plans for groups were made easier. The site also included message and customer review boards and the home page was redesigned and started offering wireless travel services. Travelocity.com also published Travelocity Magazine, a periodical which was part of the company’s strategy of extending its brand (Bianco 2006). The customer service provided by Travelocity.com was international. It served customers in the United States, United Kingdom, Canada and Germany. There was introduction of new services. For example, Travelocity Preferred Traveler travels club, a negotiated fare service and rooms at different hotels. They also introduced Option Finder in their website where alternate airports and departure dates were searched. It partnered with other companies in providing cruises and rally passes.

Conclusion

The introduction of e-Commerce technology has greatly led to the success of Travelocity.com in offering its various services hence moving from a “brick and mortar” ways of conducting their businesses. The travel agencies have changed tremendously to the extent of incorporating the use of websites in online sales promotion. Therefore, the supply chain has also changed. During the process, Travelocity has used various strategies in marketing their products and services

References

Bianco D. 2006. Travelocity.com L.P.-Company History. Retrieved on 23^rd April, 2010 from <file:///C:/Documents%20and%20Settings/Administrator/My%20Documents/Downloads/travelocity-com-inc.htm>

Michaelson J. 2002. Restructuring for Growth: Alternative Financial Strategies to Increase Shareholder Value. New York: Mc Graw Hill.

Tina G. 2002. International Directory of Company Histories, Volume 46. California: St. James Press.