Strategic Management at Jetset Travel World Group - Case Study Example

Running Header: Strategic Management Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Contents Contents 2 Strategic Management 3 Introduction 3 Strategy and Challenges Faced 4 Main Customers and Competitors 5 Success of the Company 5 Appropriate Strategic Business Units 7 Conclusion 8 References 9 Strategic Management Introduction Jetset travel world group is a merged group involved in travel business. It recently merged with the Stella travel services holding to offer wholesale travel business, retail urgency networks, air ticket consolidation, and airline representation and travel Managements services. Jetset Travelworld Group operates in United States of America, South Africa, Asia, Fiji, New Zealand, United Kingdom, and in Australia. Jetset TravelWorld Group has various groups which include: Jetset, Harvey World Travel, TravelWorld, Qantas Holidays, Viva Holidays, Travel 2, Travelescene Holidays, Newmans Holidays, Travel Indochina, ReadyRooms .com, Travelscene American Express, JTG Business select, Concorde Agency Network, and Harvey TravelWorld in South Africa among many others. The Jetset TravelWorld group is in the business of tourism and travel. As it is indicated by the Jetset TravelWorld Group (2011), travel agent services and airlines are provided with international airfare and tickets; this is done through ticketing technology which is available 24 hours a day. Jetset TravelWorld group offers retail, air, wholesale, and travel management services. Retail services include the Travelscene America Express; an Australian travel brand. The Harvey World Travel; comprised of dealership-owned stores and some Jetset TravelWorld Group owned stores. Jetset a dealership and an associate travel agent; this provides customers with products related to travel including: Air, cruise and leisure; the main target for Jetset is customers of the middle income group. TravelWorld is also a dealership offering air, land and cruise services to young couples. A web based fares database gives agents a chance to search for airfares online. Other retail services include: Smart tickets, Concorde Agency Network, World Aviation Systems and Global Aviation Services. The wholesale services offered by the Jetset TravelWorld Group include: Qantas Holidays which sources land and air travel services. The Viva Holidays provides airline flights. The other wholesale services include the Travelscene Holidays, Travel 2, and Travel Indochina. The travel management services offered by the Jetset TravelWorld Group involve flight arrangement for customers, car hire, visa facilitation and travel plan management. These services are offered by the QTB, Travelscene Corporate, Atlantic Pacific Travel, and JTG business select. Strategy and Challenges Faced According to Steve (2011) the pre tax of Jetset Travelworld was $6.4 million earnings before interest, tax and reduction of its assets of $23.3 million. It has a transactional value rising about 8% to $2.8 billion. It is also difficult to compare with previous years mainly because of the merger of Jetset Travelworld with the Stella. This has been the major strategy for the group together with the strategy of positive growth; this is in order to position the company in a competitive market and be able to explore growth opportunities which are readily available in Australia, New Zealand and the vast international market. This will naturally provide future benefits to the Jetset TravelWorld group Limited. This saw some of its director quit their jobs in efforts to change the management of the group. The operating environment of the group has been Improving.The Company is likely to be affected by the Queensland flood, Christchurch earthquake and cyclones. These are natural disasters which are likely to affect the confidence of the consumers, consequently, affecting revenues of the group. The merger process has been a challenge to the group though according to the managing director. There is an estimate of $10 million cost saving to be realized at least by 30 June 2012.As identified by Holloway (2006), there is an increase in online competition and this is likely to have a negative impact on the performance of the group; the Jetset Travelworld group has to come up with the right strategies to manage this. The declining commissions from the airline are also a threat to this group. Despite getting an assurance that the merger will not cause a threat to consumers, there is a challenge of a battle between the merged Jetset Travelworld groups to have other agents switch to SmartFares, though their most preferred is the Quickfares.The main strategy of the group is to merge with the Stella which is proofing to be effective as no major challenges have been mentioned by the directors of the group. Main Customers and Competitors The key customers mainly consist of the public in general, airlines, businesses, companies offering cruise services as well as tour operators. This group also provides their services to the government departments, corporate bodies and medium and small enterprises. The main competitors come from many other travel agencies plus other tourism and leisure related companies or businesses which offer the same services. Among the competitors include: The Travelworld, Jetset, Travelworld Newcastle,TravelWorld Bega, TravelWorld Blackwood among others. As Raduan (2009, p. 25-26) claims, there is need to identify the key customers as they are key to the running of the business. Success of the Company The Jetset TravelWorld group cannot be seen to be successful, though this particular company has a lot of businesses running in various countries, it has continuously been getting low revenue collection, and in return reduction in the profits as indicated in the figure below showing the revenues and the profits as at 30 June 2010.On the other hand the success of this group can be measured through the many number of businesses it owns. This Group has many branches in various countries, such as in United States of America, South Africa, Asia, Fiji, New Zealand, United Kingdom, and in Australia. The merger resulted to challenges especially on picking up; the process involved a lot of money, therefore, this led to the company changing it management to enable the company The figure below show the income statement of Jetset TravelWorld Group for the year ended 30 June 2010. The figure clearly shows the reduction in revenue from the previous year as well as the declining profits from the previous year. Income statement (Jetset TravelWorld Group 2010, p.30) In review of the Jetset TravelWorld group’s documents there is no where it is clearly indicated about their Mission and vision statements. Neither has it indicated its objectives. Therefore, it becomes difficult to asses if this particular group is meeting its objectives. It is very vital for a company to have its mission, vision and objectives well stated so as to enable even its own assessment of growth. According to Charles and Gareth (2006), it is the business brand is clearly shown by the mission and vision statement; a company with an attractive mission and vision statement is seen by the customers to be competitive. The major and key stake holders of this group are the corporate customers, the according to government departments, employees and the general public.According to Michael (2009). All types of customers are key stakeholder to the performance of a business. Therefore all customers should be treated with much consideration for the purpose of a business profit making and growth. In this case the first key stakeholders are the group’s employees; this is because they form the base to the success and marketability of the group. Regular individual customers are a key factor mainly because they can be relied on more often. Corporate bodies are equally very important stakeholders in the growth of a company; they are considered regular customers. Corporate customers are like the government departments, the two get their services in groups mostly to their workers. David (1998, p. 324), suggests that the group customers or customers who book facilities in groups are very crucial as they are considered to bring in huge revenues at once unlike the individual customers. Appropriate Strategic Business Units Paul and Adrian (2001, p.578), describes a strategic unit as the unit or units within an organization which is more profitable or beneficial to a company’s growth. The best units to focus on the analysis of the company are the air travelling sector, the air ticketing sectors and the accommodation sectors. All these are found within their major business segments, namely: retail, wholesale and air travelling business. These strategic units are distinguishable within the company because they all serve markets which are defined and can easily be used for planning both in services and in relation to the available markets. Since the Jetset TravelWorld is a huge company and it conducts its businesses in a number of countries, it becomes difficult to rely on just one strategic business unit. Therefore, it is taken as a group of businesses and in order to strategically planing for the future and for management purposes. Conclusion Strategic management is very crucial in running of any kind of business regardless of its size.Jetset TravelWorld Group has to put things in order as winning customers’ confidence requires strategies and visions. Every business which is successful is highly attributed to the management of that particular company and of the customers’ royalty towards the services offered. Profit Maximization is not the only aim or objective of a company; it should also aim at satisfying the market as well as fulfilling the customer’s desires. Jetset TravelWorld deserves appreciation for its efforts to improve in its management and service delivery in all the countries it operates in. References Charles, H and Jones, G 2009, Strategic management theory: An integrated approach, United States, Cengage Learning. David, E 1998, Strategic management: From Theory to Implementation, 4th edn, Heineman, United Kingdom. Holloway, J 2006, The business of tourism, 7th edn. Pearson, Harlow. Jetset Travel Group 2011, Our story, viewed 30 March 2011, Jetset TravelWorld Group 2010, Annual report, viewed 30 March 2011, Michael, A 2009, Strategic management: competitiveness and globalization, 8th edn, Cengage Learning, United States. Paul, J and Adrian, W. 2001, strategic Management: a fresh approach to developing skills, knowledge and creativity,United Kingdom, Kogan Page Publishers. Raduan , C 2009, Management, strategic management theories and the linkage with organizational Competitive advantage from the resource-base view, European Journal of Social Science vol. 11, no.3, pp. 25-26. Stephen, J 2011, Jetset on solid footing, viewed 30 March 2011, Read More