Challenges that Steven B. Belkin faced and recommendations for their solution - Case Study Example

Case Analysis: Steven B. Belkin Recommendations Introduction Steven Belkin was a resident of Grand Rapids in Michigan. As a grown up, he had the ambition of establishing his own firm that would operate privately in the back to back group charter industry that is still growing. Steven and his friend Alan established The Travel Group Corporation (TTG) that operated in the industry. However, in the course of its establishment, they faced many challenges such as financial and logistical challenges that affected the establishment of the organization. One of the major challenges was inadequate capita to begin operations for the firm. This paper examines organizational challenges that Steven faced and recommendations for their solution (Belkin 9). Situation Analysis The situation analysis examines the TTG Company and its environment. TTG was established as a private corporation that provided group travel designated groups of individuals at a low cost. The aim of formation of the group was to meet the increasing demand of low cost travel groups in the U.S. The industry itself is not yet mature. It is ten years old and is still growing given that it has only ten competitors to TTG. The main customer base of TTG are prime groups that are known to be extremely responsive to group travel such as shriners, medical associations and teacher associations among many others. The main product provided by the firm are deluxe group tours. SWOT Analysis This analysis provides an examination of the internal and external environment of TTG Corporation. The internal environment is examined using strengths and weaknesses. Strengths TTG has the strength of low cost services compared to its competitors. The company wishes to provide its deluxe group tours at low costs of $199 per person for a trip to the Caribbean or Europe. Moreover, the back to back business strategy aims at minimizing air fare because as the firm will be dropping one group for a holiday, it will be picking up another group that has completed its holiday in the same destination. In addition to the cost, the company has an excellent marketing strategy that if implemented, could lead to increased sales turnover for the firm. The firm intends to market its products and services throughout the U.S using agents and different kinds of broadcast media. Weaknesses TTG has several weaknesses that could undermine its excellence in the industry. To begin with, the firm is new in the industry since it is a new firm that is venturing in the industry. Consequently, the company has no experience of doing business and providing group tours. The inexperience of the firm could undermine its marketing efforts. Financial challenges are other issues that are affecting TTG. The company has inadequate capital to establish and run the firm. Steven and Alan faced difficulties of soliciting funds from investors and other financial companies that lend capital to firms since the company had no assets (Belkin 12). Opportunities TTG had the opportunity of venturing into the lucrative group travel industry. The industry is less developed therefore offering the company an opportunity to venture and grow with the industry. In addition to the opportunity in the industry, TTG has the opportunity of diversifying and venturing into other businesses in future. Threats TTG faces the threat of high competition in industry. Although the industry is still growing and has only 11 firms including TTG, it is characterised by free entry and exit and therefore, there could be new entrants venturing into the industry. This could trigger rivalry among competing firms. Unfavourable competition from dominant firms could affect the operations of TTG. 7Cs Methodology The 7Cs of consultancy are important to any organization including TTG that is operating in a new environment as described below. Client: customers are important people in an organization as they are the reason for the existence of an organization. Understanding the needs of the clients is of vital importance because their satisfaction determines continued existence of the organization. TTG has identified its clients as prime groups that are responsive to group travel. Clarity: this is the extent to which the firm makes clear the nature of the problem at hand. The problem at hand for TTG is increasing demands for group tours, which the organization has identified, made clear and decided to venture into the industry. Create: after the identity of the problem, there is need to create and develop a plan for implementation in order to solve the issue. TTG has developed a business plan to venture into the industry. The plan involves seeking of venture capital, marketing the firm and beginning provision of group tour operations. Change: this step involves enhancement of changes in the operations of the firm that increases its revenue. Others are the confirmation of the outcome of the company operations. These outcomes are confirmed through improved financial performance. Moreover, the firm should ensure continuity of its operations in the industry while it should ensure that it publishes it measured outcomes to close its services. Publication of its measured outcomes is vital for shareholders. Action In order to tackle issues facing TTG, the management could undertake various measures. First, the company should capitalize on its low cost strength to establish a competitive advantage. Secondly, TTG management should utilize their previous experience in teh business to establish the firm. Concerning the issue of inadequate capital, TTG should cut its budget drastically while dedicating much attention to its initial operations. Given that the management are using their personal savings, they should each contribute a given amount of their personal savings to the running of the firm. Impact and Sustainable Competitive Advantage for TTG TTG operates in a growing industry that is characterized by increased entries of new firms. Competition and rivalry among competitors are high. TTG has a sustainable competitive advantage of lost cost for its services. This advantage should be utilized by the management of TTG that comprises of Belkin and Alan to increase the company’s competitive advantage. Moreover, Porters generic strategies of market segmentation, low cost leadership and product differentiation should be used. The expected outcome of low cost is gradual increase in the company’s market share. Although low cost leadership strategy is already in application, its effectiveness should be enhanced by the other two strategies. Differentiation its group tours from its competitors could be in terms of offer of additional services and excellent customer care while the market could be segmented based on regions and type of organization. With these strategies in place, TTG would be successful with increased customer loyalty, performance and growth being witnessed by the company. Work Cited Belkin, Steven. Case Analysis: Steven B. Belkin. Harvard Business School. 1988. Print. Read More