Flight Center Ltd - International Operations with Canada - Case Study Example

Australian Company Name: Flight Center Ltd. Countries considered in which company has international operations: New Zealand, South Africa, the USA, UK, and Canada. The one country selected for this report: Canada. Name and phone contact details of author of this report (i.e. you): Table of Contents Content Page Number Part I: Summary of Report………………………………………………………………… 3 Part II: Introduction to Report ………………………………………………….….……… 4 Part III: Body of Report ………..………………………………………………….………. 4 Part III (a) POLITICAL ECONOMY ENVIRONMENT ………………………………… 4 Part III (b) BUSINESS ENVIRONMENT ………………………………..……….……… 6 Part IV: Conclusions and Recommendations ……………………………………….…….. 7 References ………………………................................………………………...………….. 9 Part I: Summary of Report The Flight Center Ltd is based in Australia, and it has its operations in about eleven other countries worldwide. These countries include New Zealand, South Africa, the USA, UK, and Canada. This report has reviewed the international business, political, legal and regulatory environments for the Flight Center in Canada. Canada has one of the best environments for doing business and even for settlement in the world. Canada is the most closely related country with the USA, and this alone makes the economy of Canada a growing and a stable one, making the environment suitable for business (Zimmerman, 2008). However, this close relationship means that the political and regulatory factors in the US directly affect the travel agencies in Canada. For instance, the new security rules by the USA are very expensive and hard for Canada travel agencies and the travel industry to comply with (Potter, 2009). Another thing is the frequency of terrorism attacks in the US, making terrorism attacks in Canada become frequent. Though these attacks are usually mostly indiscriminate, they usually affect Canada based on its close relationship with the USA. The inconsistency in Canada’s social environment makes business trends by the Flight Center Canada to be very inconsistent and unpredictable. Also, diversity of the customer categories causes a huge segmentation in the business of the travel agency. Trade fairs in Canada create such a great opportunity for Flight Center Canada. The Flight Center Canada also has great opportunity for the short-break travellers who travel between Canada and USA every day (Shalla, 2006). Part II: Introduction to Report Among the various travel agencies in Australia, the Flight Center Limited is the largest and the most renowned travel agency. Flight Center Ltd, though mainly based in Australia, has its services reaching far and wide to other countries. Also, the company has made foreign investments in eleven other countries, and these countries include New Zealand, South Africa, the USA, UK, and Canada (Zimmerman, 2008). The purpose of this report is to review the international business, political and economic environment of Canada, one of the countries of operation of Flight Center Ltd. Most of the data for the report will be obtained from secondary sources such as journals, news, books and credible sources from the internet. Part III: Body of Report Part III (a) POLITICAL ECONOMY ENVIRONMENT Canada is one of the countries in the entire world that are recognized for having the best environment for business and for living. Life in Canada is said to be very stable and the economy is ever-growing. Canada is very closely related to the US in every aspect, and the border between the two nations is unfortified to ensure free movement and interaction between the two. However, there are political, legal and regulatory factors that affect business, specifically the travel agency business, in Canada both positively and negatively (Sorensen & Williams, 2010). Canada is very closely related to the USA, and this means that the political and regulatory factors in the US directly affect the travel agencies in Canada. For instance, the regulatory environment of the US has become more stringent, with new security rules for USA being put across. Canada has more potential for business in the US than in Toronto, its capital city, and this makes it compulsory for it to comply. Complying with the new rules in US for security has become quite an expensive task for the Flight Center Canada, among other travel agencies, and this has greatly affected the business therein (Littlejohn & Carleton University, 2009). By virtue of the fact that Canada has close relations with the US, terrorism attacks in Canada have become frequent. USA is one of the countries in the entire world that have frequent terrorism attacks, and these attacks are also at times directed to USA’s close friends. Terrorism, though indiscriminate, has become one of the greatest threats the Flight Center travel agency has faced and continues to face. An example is the terrorist attack that did not succeed on Christmas day of 2009 as the plane was flying from Amsterdam to Detroit (Potter, 2009). The social environment of Canada also affects travel business therein. Canada has many places of visit, but it seems that people have different preferences of places to visit over time. It would be accurate to say that to most people, some of the places of visit become “outmoded” for most travellers over time. The inconsistency in Canada by the people when it comes to places of visit make business trends by the Flight Center Canada to be very inconsistent and unpredictable. Some destinations, due to low investment in them, become unpopular with time. However, the positive side to his is that due to social trends and the changes caused, new travel destinations are emerging everywhere, thus creating a new glimpse of hope for the travel agency (Lane, 2004). Also, Flight Center Canada finds it hard to categorize its customers so as to concentrate on the right customer category. This is because of the diversity of the customer categories, thus causing a huge segmentation in the business of the travel agency. Canada is made up of leisure travellers, business travellers, immigrants and other travellers who are independent, travellers who are related to a specific age group and those who travel on holiday packages. The Flight Center Canada therefore has to distribute its attention and resources to all these different groups, thus making it difficult to grow one specific area relative to others. Such segmentation of resources makes profitability way less than it would have been had the segmentation been lesser (Zimmerman, 2008). Part III (b) BUSINESS ENVIRONMENT The frequent and well-attended trade fairs in Canada create such a great opportunity for Flight Center Canada. In these trade fairs, the Flight Center Canada displays all its services to different destinations across the world, and they also give gift packages to some visitors. The advantage is that not only are the trade fairs highly attended, but they are attended by all types of customers interested in a wide range of destinations. According to market research, trade fairs in Canada and USA have created huge profitability for the Flight Center Canada (Goeldner & Ritchie, 2009). Also, of late, it has been noted in Canada that the people who travel to destinations of ethnicity and heritage are on the rise every day. This sector is therefore one which is full of emerging opportunities for the Flight Center Canada if proper research and marketing is done. The Flight Center Canada also has great opportunity for the short-break travellers who travel between Canada and USA every day. It is estimated that close to half a million people travel between the unfortified border of USA and Canada every single day. This is such a great opportunity for Flight Center Canada, because of the great volumes of daily travel (Singh, 2008). There are several threats that the Flight Center Canada and other travel agencies face. As stated earlier, the trends and expectations of the travellers really vary with time, age and location. Therefore, the company has to invest a lot in researching on the trends and expectations of the travellers in different markets it operates in. this is more so because aboriginal tourism is said to be on the rise in Canada. The human resource is also a very vital part of the company, and strategic human resource has to be applied. This makes it quite expensive to retain employees and to keep them in the best working conditions. The Flight Center Canada is directly affected by the trends of tourism, and therefore investments have to be made to improve the infrastructure of tourism in the country (Shalla, 2006). Part IV: Conclusions and Recommendations The general international business and political environment in Canada is suitable for the travel agency business. The rate of economic growth of the USA is very high, and this translates to high economic growth in Canada as well. Close relations between the two countries have caused an increase of the instances of travel between the two countries because of the business relations, making the travel industry an ever-growing one. However, this is amidst many emerging threats that need to be dealt with regardless (Sorensen & Williams, 2010). The Flight Center Canada should put a substantial amount of focus on the short-break travellers who travel daily between US and Canada. The travel agencies may ignore this group of travellers because of the assumption that this short distance and short-break travelling is less profitable. In the real sense, when compared to other travel groups, it may be less profitable, but high profitability is attained not because of the voluminous profits per traveller but because of the huge volume of the total travellers of this category. It is easier to make more profits if a little is made per traveller for huge masses of travellers than when a kill is made on each traveller for a small bunch of them. This huge group will give the Flight Center Canada more sustainability and great competitive advantage in the travel agency market. References Goeldner, C.R & Ritchie, J.R.B. (2009). Tourism: Principles, Practices, Philosophies. New York: John Wiley and Sons. Lane, B. (2004). Tourism Collaboration and Partnership: politics, practice and sustainability. London: Channel View Publications. Littlejohn, M. & Carleton University (2009). Shaking the Feathers: Canada’s aboriginal cultural tourism in the 21st century. Does native tourism strengthen communities and inform non-native people, or does it reinforce negative stereotypes? An examination of Woodland Cultural Center in Brantford, Ontario. Ontario: Carleton University Press. Potter, E.H. (2009). Branding Canada: projecting Canada’s soft power through public diplomacy. Sydney: McGill-Queen’s Press. Shalla, V. (2006). Working in a Global Era: Canadian perspectives. Ontario: Canadian Scholars’ Press. Singh, L.K. (2008). Management of Travel Agency. New York: Gyan Books Ltd. Sorensen, A. & Williams, C. (2010). The Rough Guide to Canada. Ontario: Rough Guides. Zimmerman, K. (2008). Canada. Ontario: Lonely Planet Publishers. Read More