A Strong and Competitive Package Holiday Industry of the UK - Assignment Example

?Strategic Management Analysis Table of Contents 0 Introduction 4 1 Brief Introduction of Virgin Holidays 4 2 Brief Introduction of Package Holiday Sector 5 1.3 Reason of Choosing the Company 5 2.0 Task A 6 2.1 PESTEL Analysis 6 2.2 Porter’s Five Forces 9 2.3 Critical Success Factors 12 2.4 Driving Forces 12 2.5 Product Lifecycle 13 2.6 Summary of Part A (Opportunities and Threats) 14 3.0Task B 15 3.1 Value Chain 15 3.2 Value Network 18 3.3 Competitive Advantage- Threshold v Unique Resources or Competencies 18 3.4 Financial Resources 18 3.5 Financial Competencies 20 3.6 Human Resource Competencies 21 3.7 Physical Resources Capabilities 22 3.8 Intangible Resources Capabilities 22 3.9 Sustainable Competitive Advantage 22 3.10 Summary of Task B (Strengths and Weaknesses Analysis) 23 4.0 Task C 24 4.1 Strategic Direction 24 4.2Strategic Fit with Environment 24 4.3BCG Models 25 4.4 Summary of Task C 26 5.0References 27 Appendix 35 Appendix A: PESTEL Analysis Scan 35 Appendix B: Five Forces Analysis Scan 36 Appendix C: Value Chain Scan 37 Appendix D: Value Network Scan 38 1.0 Introduction 1.1 Brief Introduction of Virgin Holidays Virgin Holidays is regarded as one of the most flourishing transatlantic operators of tour. Virgin Holiday is a UK based company. It is also considered as one of the market leaders that arrange travel trips to the USA along with Caribbean. From the year 1985, the company is arranging the entire holiday travels and has customized the experiences of holiday all throughout the world. Besides the two places it also offers holiday packages to other places such as Canada, Australia, South Africa, Far East, Middle-East, Indian Ocean, New Zealand, and Mauritius. The prime objective of the company is to provide customers with best holiday destination so that they can take pleasure of the place (Virgin Holidays, 2011). 1.2 Brief Introduction of Package Holiday Sector The package holiday industry in the UK is one of the largest as well as fastest emerging industries. The industry provides various holiday destinations to the customers. Besides other kinds of holiday packages, the package holiday is also arranged which provides customers with numerous destinations both internationally as well as nationally. In the package holiday industry, tour operators perform as ‘wholesalers’ as they are entitled to bargain with the travel agencies regarding the commission for selling to the customers (Rowe & Et. Al., 2002). 1.3 Reason of Choosing the Company Virgin Holidays has been chosen because it is the successful ‘transatlantic tour operator’. The company is much efficient to arrange holiday programs for the travellers as it is operating in the market since the year 1985. It also possesses excellent customer service with unique travel intelligence (Virgin Holidays, 2011). 2.0 Task A 2.1 PESTEL Analysis The PESTEL analysis will analyse the political, social, economical, technological, environmental and legal factors that have impact on the package holiday industry in the UK. Political The political insecurity has an impact upon the selection of tourist destination of a traveller. The political conflicts in various countries have restricted the package holiday destination for visitors. From the UK, trip towards Croatia and Serbia has seen improvement as the political situation has re-established, particularly in Croatia. The different political scenario in various countries may decrease the package holiday trips to the attractive destinations, which may result in low demand of the tourism packages in the UK (Philip Allan, n.d.). Economic The tourism industry has faced challenges due to the fluctuation of economy in the UK. The economy of the country is rising; as a result it will result in growth of the service industry such as tourism sector. The changes in the GDP rate and wage will have an impact on the tourism industry in the UK. In the UK the NMW (National Minimum Wage) rate is as follows: Rate (per Hour) Age ?5.93 Greater than 21 ?4.92 18 - 20 ?3.64 16 - 17 ?2.50 Apprentice under 19 Source: (Directgov, 2011). It is expected that the NMW will increase for employees greater than 21 year age to ?6.08 and employees with 18–20 years will rise by ?.08 per hour. Thus, it can affect on the direct expenses of Virgin Holidays. The increase in economy growth rate in the country will bring development of travel and tourism sector. The UK economy has shown a growth rate of 0.5% in the initial quarter of the year 2011 after a reduction of 0.5% in the end period of 2010 (BBC News, 2011). Thus, the growth in the economy is expected to facilitate increase in the travels and tours by the consumers. Travel and tourism play a major role in development of economy in the UK similar to other countries of the world. In a survey it was estimated that the prime reason for travel among the UK residents had been holidays, ranging around 64%. This enables contribution to the GDP growth rate of the country and in turn provides scope of growth for package tour operators (House of Commons, 2000). Social It has been identified that the people of the UK survive longer and are healthier. They normally spend huge money for tours and travels. The aged populace of the UK also have enough time to spend for travelling purpose. They make up a significant market for operators of travel and tourism. The tastes of the customers vary from season to season (Dale & Oliver, 2005). Figure: Visits of Travellers to and from the UK Source: (Office for National Statistics, 2011). In the period of February 2011 to April 2011, there has been a rise in the number of visits to as well as from the UK. Holidays as well as business related visits in the UK have risen substantially in 2011, whereas there has been a slight decline in the visit to overseas destinations by the UK residents. Holiday visits have declined by a figure of 3%. Thus, these aspects have to be kept in mind by Virgin Holidays while designing their holiday packages (Office for National Statistics, 2011). Technology The technological change has a high impact on the package holiday industry. Through internet the customers are able to make ticket booking through online and can search the desired destination where they are willing to visit. The technology advancement has enabled the visitors to make online payment through debit card and credit card. The development of transport system such as ‘new-generation cruise ship’ and super-jumbo Airbus have made trips much more comfortable, which result in rising demand of air travel (Philip Allan, n.d.). Environment Environment has a great role in the development of the locality related to the places of tourism. There are various areas such as coastal resorts, mountain ranges, national monuments and sites of cultural interest which are related to the holiday travel. However, there are various environmental factors that may have an impact on the tourism. Rising air travel on the atmosphere of earth has an impact on the climatic change. Natural disaster generates problems for the UK travel and tourism companies. The tsunami in the Asian countries had affected package holiday tours to the destinations around Indian Ocean. The UK may face huge challenges in its tourism sector as the number of people to undertake such package tours might reduce due to such natural disasters (Philip Allan, n.d.). Legal Association of British Travel Agents (ABTA) possesses certain code of ethics which the tourism industry is required to follow. If the code is violated then there is legal department that will administer the case and there will be fine for such violation. This legal issue may have an impact on the package holiday that the company offers (Advice Guide, 2011). In recent times, package holiday industry has started a campaign regarding “Fair Tax on Flying”. ABTA, the travel related trade body has led the way in this campaign in order to prompt the government to halt the rise in the aviation tax. This aspect is a crucial recent development in the UK which needs to be taken care of by the Virgin Holidays as aviation tax rise can directly impact upon the package holidays tours taken from the UK to foreign destinations (Eleftheriou-Smith, 2011). 2.2 Porter’s Five Forces Porter’s Five Forces model is related to the corporate level strategy of Virgin Holidays in order to fulfil the opportunities as well as threats of the external environment. The five forces are: Bargaining Power of Suppliers The bargaining power of suppliers seems to be high as the company requires global suppliers for working in a global basis. The numbers of suppliers is limited and there is large number of buyers who demand for the package holiday trips (Recklies, 2011). Bargaining Power of Buyers There are large numbers of travel and tourism companies in the UK; as a result the buyers’ bargaining power becomes high. The customers may switch to other trips related to package holidays of another company as they have available substitutes. As the customers are price sensitive, they may integrate backwards if the price is high (Recklies, 2011). With regard to package holiday industry, there are already several strong players in the UK for example: Thomson Holidays, Thomas Cook and My Travel which provides cheap holiday package to travellers. Threat of New Entrants New entrants in the market may reduce the attractiveness of the company’s products. The threat of new entrants is quite low in the UK tourism industry. There is a chance of switching of customers to the new company. The new entrants may attract customers with more products and also can in turn reduce the market share of Virgin Holidays (Recklies, 2011). Threat of Substitutes The challenges may arise from the threat of new substitute products with better quality and lower price. If the new entrants may provide package holidays with more destination trips in an affordable price then the buyers will switch to it. Besides new entrants’ holiday packages there are other substitutes of Virgin Holidays such as the rail travel or roadways because package holiday is depended on air travel. Thus, these substitutes can also have impact on the package tour industry (Recklies, 2011). Competitive Rivalry between Existing Players It signifies the intensity of competition that exists between existing players within the tourism industry. As the market of the UK comprises of various tourism companies, therefore there is already existence of competition among the companies. The competition may arise from same strategy, products and price differentiation among others (Recklies, 2011). In the year 2007, the market share of Thomas Cook in package Holiday industry was 11% and My Travel had 10%. Thomson Holidays which is another major competitor of Virgin Holidays has captured the majority of market share in this segment i.e. 30% in the year 2011 (Travel Weekly, 2007) & (Package Holiday Guide, 2011). 2.3 Critical Success Factors The political scenario of various countries where the company is arranging for package holiday trips can be identified as one of the critical success factors for Virgin Holidays. As a result, it has provided a new dimension to the tourism sector to become successful in the market. The development of innovative technology related to internet and transport system enables the customers to make online booking and choose the destination they are fascinated to visit. Through the use of technology, Virgin Holidays can provide faster operations such as traffic administration, extensive web communications and server optimisation. It helps customers in terms of a flawless and protected way of booking experience. The technologies of Virgin Holidays provide real time result for any enquiry of customers. The capability of Virgin Holidays in this aspect is a major critical success factor for the company to sustain in the competitive market of the UK. 2.4 Driving Forces The environment of the company comprises of various internal as well as external driving forces. The company is required to determine changes in its environment so that it can act actively in the changing economic market. The customer demand for the holiday packages and other trips may get changed on a seasonal basis. The demand for other unique type of holidays may arise; therefore the company is required to be conscious of the changes in the demand of the customers and need to fulfil them accordingly. The external forces that may have an impact on the company are management style, human resources and economic resources. The internal forces include the competitors and the available technology to standardise the systems of operations. These may facilitate the company to analyse its strategic planning for future (Walden University, 2010). 2.5 Product Lifecycle The product life cycle model comprises of five major stages and these are ‘Product development’, ‘Product introduction’, ‘Product growth’, ‘Product maturity’ and ‘Product decline’. The product ‘package holidays’ of Virgin Holidays is in the growth phase of product lifecycle. The sales of the package holidays provide by the company have increased in recent times and in the meantime the prices of the product have also been kept at affordable range which has enabled to attract more visitor to avail their tour packages. In this phase, the company focuses towards growing its market share. Advertising and promotional methods is continued in this stage but not as similar to introductory phase. The company offers entire products to the third parties and also provides special offers in order to differentiate from its competitors. The discount policy and special offers are regularly provided by the company in this stage so as to enhance the loyalty of customers. The company in the growth phase can fulfil the expectation of the customers by providing the exclusive tour facilities (Komninos, n.d.). 2.6 Summary of Part A (Opportunities and Threats) The opportunities as well as threats of the company in relation to its product can be established from the above analysis. It has been observed there are several opportunities which are gained by the company due to its different types of packages and destinations. The quality service of them will enhance opportunities in the market. However, as the market of the UK comprises of various travel and tourism companies, therefore the company may face challenges from similar products and prices. There are other companies in the country which are offering advanced services and more facilities. Opportunity Comments More Innovative Services Virgin Holidays can introduce more innovative holiday packages and enhance its customer service Technology Improvement Virgin Holidays can introduce new technology such as wireless internet on plane, or more advanced stock management system. Spread the Business Virgin Holidays can start offering new package holiday routes to customers Threat Comments Terrorism The terrorism acts such as 9/11 or plane hijack can possess threat on air travel and thus on package holidays Brand Strength Virgin Group is spread across the world but it is not specialised in any particular product that can make the brand stronger Fuel Price The fuel price is increasing continuously which can make Virgin Holidays to increase the cost of package holiday that can affect on the demand of it Competition There are major competitors in the package holiday industry which also possess potential threat for Virgin Holidays 3.0 Task B 3.1 Value Chain Value chain analysis entails the activities that have occurred within the organisation and around an organisation and are related to the competitive strength of the company. Primary activities are related to the creation towards delivery of products or services (Recklies, 2001). The five primary activities are: Inbound Logistics The different holiday destinations are provided by the company so that more customers can be influenced to make a trip through Virgin Holidays. Various offers are provided to the customers based on a seasonal basis. Due to their various types of packages with wonderful destinations the visitors are highly attracted to the trips. For inbound logistics, Virgin Holidays arranges ‘regular flier program’ that can attract more customer towards the package holiday (Virgin Holidays, 2011). Operations The company is focused on delivering effective services and it is their vital operation to keep the promises, as stated by them, to the customers. The operations are carried out in such a manner that the right things can happen at the right time. All these require huge planning of the team members (Virgin, n.d.). Outbound Logistics The company arranges trips to various attractive destinations so that the visitors can enjoy the pleasure out of them. The destinations provided in package holidays by Virgin Holidays are Florida, China, Indian Ocean, Thailand, Dubai and Caribbean. Besides these destinations there are various other destinations that are associated with other trips. The destinations provided by Virgin Holidays are places of great interest (Virgin Holidays, 2011). Marketing and Sales The promotion of the products is performed by marketing teams of Virgin Holidays to travel agents as well as customers. The promotional method is carried out by means of advertising and direct marketing to third party such as hotel groups, travel agents and tourist boards. The destinations as well as special offers are offered to these third parties. Virgin Holidays utilises Virgin Atlantic as their marketing instrument. It provides several advertisements of the services of Virgin Atlantic for the package holidays (Virgin Holidays, 2011). Service The company possesses excellent customer service department where all the queries can be solved. After the booking of a holiday package, the details are sent to the emails of prospective customers (Virgin Holidays, 2011). Whenever any complaint is received the Service Delivery Team instantly provides all efforts to solve any problem. The intention of providing quality service is to enable the customers to consider the Virgin Holidays as the company where they would ‘love to travel’ (Virgin Holidays, 2011). The primary activities are associated with the support activities which are categorised into four parts and these are: Procurement The customers have huge expectation from the tours provided by Virgin Holidays. As a result, the procurement team is much essential. It tries to make the cheapest deals, by balancing between cost as well as quality. Highly enjoyable holiday experiences are arranged for the customers. Good quality hotel rooms, tours as well as activities are arranged for the customers with fair price. Virgin Group constantly introduces new flights and increases its demand by inexpensive travel and quality customer services (Virgin, n.d.). Technology Development Virgin Holidays has executed ‘GlobalSign’s Extended Validation (EV) SSL technology’ in order to keep secure its website with which it contacts with the consumers. With the implementation of such technology the company would enable to keep its brand from copy cat websites and may protect the customers from the phishing attack. The technology would also help to raise their sites image and to stop the abandonment of shopping basket by online travel package buyers, thus it may result in enhancement of conversion of sales. As a result, there will be win-win situation for both online customers and Virgin Holidays (Global Sign, n.d.). Human Resource Management There are almost 200 companies which are formed by Virgin. Virgin Group provides 50,000 employments internationally. The human resource department of the company is well organised; as a result there is integrity and respect among the workforce inside the company. The work culture of the company is quite strong and this results in employee commitment towards work. The employees are focused towards achieving the goals of the company (Docshare, 2011). Regardless of inspiring and motivating HR department, the company creates supportive work environment for the employees based on their demographic characteristic (Virgin Holidays, 2011). Infrastructure The infrastructure of the company is highly developed by incorporating various technical equipments. Within the workplace, there is IT based support team to help users with desktops as well as printers and also aid with application related queries such as Microsoft Office, thus in turn assist the users to carry out the regular work activities by removing the entire dilemmas which help them to complete the tasks. The tasks are carried out in the entire parts of business in the UK as well as all over the offices of foreign countries (Virgin Holidays, 2011). 3.2 Value Network The value network of Virgin Holidays connects it with other associates such as hotel, bus, airports and tourists spots. Virgin Holidays performs business by joint cooperation with many hotels internationally. It has also joint venture with several bus companies to carry their customers to hotels. Virgin Holidays frequently pay for value creation services from the suppliers to execute the business operation more efficiently. The suppliers of Virgin Holidays comprises of vehicle companies, electronic companies, media & advertisement agencies among others (Refer Appendix D). 3.3 Competitive Advantage- Threshold v Unique Resources or Competencies The company provides special offers and discounts. The special qualities of products along with other varied types of holiday trips make the company unique from its competitors (Virgin Holidays, 2011). The company believes in competitive challenges and provides ‘value for money’ for its customers, and also provides ‘innovation’, ‘quality’ as well as ‘fun’. This may result in attaining competitive advantage over its competitors (Virgin Holidays, 2011). 3.4 Financial Resources The financial department is in charge of analysing the financial scenario of company. The statutory financial obligations are fulfilled along with other financial needs through stakeholders such as trade bodies, shareholders and suppliers (Virgin Holidays, 2011). In the year 2008-2009, Virgin Holidays made a financial contribution towards the global communities worth ?294,830. The sales, marketing teams of Virgin Holidays are provided task to raise money apart from their profit for communities. Thus, the financial capabilities of Virgin Holidays can be observed to be quite stable to encourage further growth in the future (Virgin Holidays, 2009). Financial Health of Virgin Holidays The table below shows the major financial ratio of Virgin Group and one of its major competitors Thomas Cook in 2011. Financial ratio Virgin Group Thomas Cook Group Current ratio 0.6 0.4 Asset Turnover ratio 0.4 1.2 Source: (Bloomberg L.P., 2011) & (Bloomberg L.P., 2011) In the above figure, it can be seen that Virgin Group’s current ratio is less than 1 which indicates that Virgin Holidays is less competent to pay the debt but the ability to pay debt is higher than Thomas Cook. It indicates that it has average financial performance in the package holiday industry. In case of asset turnover ratio Virgin Group has low asset turnover than its competitor Thomas Cook which indicates that Virgin Group has high profit margin than Thomas Cook. Thus, it can be seen that Virgin Group has good financial health and it has average performance in the market. 3.5 Financial Competencies Virgin Holidays is a subsidiary of Virgin Group. Virgin Group is a leading private organisation in the UK. It has strong financial competencies. In the year 2000, the annual sales of Virgin Group were calculated as ?3 billion. Virgin Group has multiple business units. Source: (Ese Courses Online, n.d.). Thus, the financial configuration of Virgin Group is uneven and very hard to trace. In the year 2002, the total revenue of Virgin Travel was almost 2028 million USD which was the second highest among other subsidiaries of Virgin Group. This represents the fact that the travelling companies of Virgin Group such as Virgin Holidays have strong financial competencies (Grant, 2004). 3.6 Human Resource Competencies Virgin Holidays has strong human capital and they share similar business culture as Virgin Group. Virgin has its own HRM (Human Resource Management) and it permits the employees to search for opinions which can improve the value of Virgin Holidays brand towards the customer. Employees are likely to act according to the value of the company. The employees of Virgin Holidays are responsible for their performance (Ese Courses Online, n.d.). 3.7 Physical Resources Capabilities Virgin Group has several physical resources. Virgin has own airlines, hotels and cargos that are related to Virgin Holiday’s performance. The physical resources of Virgin Group help to offer impressive holiday packages to the customers. Source: (Grant, 2004). 3.8 Intangible Resources Capabilities The most intangible resources of Virgin Holidays are its brand value. The brand name ‘Virgin’ is one of the renowned brands in the world. In the year 2007, the brand value of Virgin Group was calculated as almost ?2.2 billion to ?2.6 billion. In the year 2007, Virgin was ranked in the first position in the ‘UK’s Most Admired Brand’ by ‘HPI Research’ which makes the Virgin Holidays an expensive brand internationally (Telegraph Media Group Limited, 2007) & (SyncForce, 2011). 3.9 Sustainable Competitive Advantage The efficient service delivery to the customers enables the company to gain sustainable competitive advantage over its competitors. The quality services, affordable prices along with varied types of holiday packages enable Virgin Holidays to attain sustainability in the tourism market. The operations undertaken by the ‘Health and Safety Team’ make certain that the highest standard of service is offered which enable them to develop reputation as well as sustainable tourism (Virgin Holidays, 2011). 3.10 Summary of Task B (Strengths and Weaknesses Analysis) The company possesses various positive aspects that facilitate to achieve huge competitive advantage in the tourism market. The service offers to the customers are of highly effective and standardised. The service and safety team members of the company are also efficient to provide quality service to the customers and solve any problem that may take place during the trip. The holiday packages are also large in number and the company is responsible for providing customers with the best destinations to make the trip of customers more special as they have expected. A weakness which has been identified is that the new techniques of promotional method have certain deficiencies in terms of marketing. The communication about the package holidays has also become sluggish. The other significant drawback which can be identified is that the financial report of the company is not published. 4.0 Task C 4.1 Strategic Direction The strategy of the company, to launch social media solution on its website, enables the company to retain the existing customer segment and to reach more customers (Monster Holidays, 2010). The company also has developed iCrossing strategy for higher quality and unique contents in the website of them. It will result in creating additional consumers as well as to drive the search engines. This facilitates the customers to get information from the sites (Slide Share, 2011). The strategy of Virgin Holidays is to deliver a strong competitive advantage by means of delivery of services in sync with enhancing the brand value related to the company. 4.2 Strategic Fit with Environment The success of Virgin Holidays is based on the strategies that have been developed to carry out the effective functioning of the company. These strategies facilitate them to gain huge competitive advantage and reputation in the tourism market. Though in the UK there are quite a many tourism companies, Virgin Holidays by implementing such strategies influences large number of customers to experience the packages that it offers. The strategy that has been developed and executed fit the policies and objectives of the company. In relation to the market of the UK, the company has adopted various strategies for attaining competitive advantage but to be a market leader in tourism sector in the country, other strategies need to be formulated. For increase in growth and market share the company can implement certain innovative strategies in relation to promotion of special offers and tour packages so as to attract more number of customers. 4.3 BCG Models The ‘BCG-Growth Share Matrix’ is considered as four cell matrix which is utilized to carry out the business portfolio analysis for strategic planning process. The four different strategic and investment approaches are cash cows, stars, question marks and dogs. Source: (VectorStudy, 2008). Virgin Holidays can be identified to be in the stage of ‘Question Mark’ with small market share operating in a high growth market. The company has been operating in the market of the UK which is already developed. In spite of its operations in high growth market it has till date not been able to explore the maximum capability prevalent in the market and achieve high market share. It requires huge resources to develop its market share. With its efficient services and quality packages the company has the ability to reach the phase of ‘Star’ in the BCG matrix. The human resource team of the company is highly responsible to perform the tasks and they can take the company to the next level of achieving success (Business Tools & Templates, 2005). 4.4 Summary of Task C The strategy adopted by Virgin Holidays in order to attract customers towards the provided services has been based on increasing their customer base along with enhancing their brand image. Virgin Holidays emphasises on providing enhanced services through their upgraded website. For this function, they have developed iCrossing strategy. Unique customer service has been one of major strengths of the company in order to attract customers. The transatlantic tour packages as provided by the company have made them unique to a certain extent and have helped them to draw a certain segment of customers who generally prefer to visit such locations. 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[Online] Available at: http://careers.virgin.com/your_path/operations-logistics/ [Accessed July 08, 2011]. VectorStudy, 2008. The BCG Matrix. Management Theories. [Online] Available at: http://www.vectorstudy.com/management_theories/BCG_matrix.htm [Accessed July 08, 2011]. Virgin Holidays, 2011. Special Offers and Late Deals. Home Page. [Online] Available at: http://www.virginholidays.co.uk/special_offers/?cm_re=default-_-or_maybe_you'd_like_to-_-special_offers [Accessed July 08, 2011]. Walden University, 2010. Driving Forces in Business Planning. Management. [Online] Available at: http://thinkup.waldenu.edu/management/business-planning/item/11907-driving-forces-business-planning [Accessed July 08, 2011]. Appendix Appendix A: PESTEL Analysis Scan Political Aspects Impact Comment Stability 5 of 5 The Impact of political insecurity in the package Holiday industry is high. Unstable political condition can have an affect on Virgin Holidays Rules and Regulation 3 of 5 The impact of rules and regulations on package holiday industry is high because different rules in countries can impact on holiday trips to the respective country Economical Aspects Impact Comment Fluctuation 4 of 5 The fluctuation in economy can impact the package tourism industry and Virgin Holidays as a whole GDP Growth Rate 3 of 5 The GDP growth rate of the UK can impact on Virgin Holidays, because it can determine the economic condition of any country and trends towards holidays Social Aspects Impact Comment Trends 3 of 5 The citizens of the UK are financially capable to spend on holidays and thus it can help Virgin Holidays to introduce seasonal offers Technological Aspects Impact Comment Internet Facilities 4 of 5 Through internet the customers are able to book tickets online and can search the desired destination Transport System 3 of 5 The innovative transport system has made the trips for holidays more flexible and comfortable and it increases the demand of package holidays Environmental Aspects Impact Comment Tourism Spots 4 of 5 The tourism location such as presence of beautiful mountains, natural monuments, sea and other sites can automatically attract customer to spend on holidays Legal Aspects Impact Comment Code of Ethics 2 of 5 The Code of Ethics composed by ABTA has impact on the package holiday industry and changes in rules must be followed by every company such as Virgin Holidays Appendix B: Five Forces Analysis Scan Threat of New Entrants (Low) Comment Huge Money In order to enter package tourism industry, huge amount of money is needed to compete with other competitors and provide superior packages. Thus, threat of entry is low. Bargaining Power of Supplier (High) Comment Global Supplier As Virgin Holidays needs suppliers from all around the world, thus the bargaining power is high Bargaining Power of Buyers (High) Comment Large Customer In the package holiday industry there are many customers and they can easily switch from one company’s products to others thus there is high bargaining power of buyer of Virgin Holidays Threat of Substitute (High) Comment Competitor products The package holiday products of other competitors are major substitutes of Virgin Holidays. Other competitors can provide more suitable products than Virgin Holidays to attract customers towards them Rivalry (High) Comment Strong Competitors There are many competitors of Virgin Holidays and it can face rivalry because of difference in prices, products, packages and services Appendix C: Value Chain Scan Appendix D: Value Network Scan Read More