UNIT 6

E-Business Strategies for tourism Industry Strategies

Concept of e-Business Strategies

Introduction

E-Business It is defined as an information system or application which is delegated to business processes. The use of both technology and new business strategies for doing business online. Online business gives a perfect channel for sales, marketing, and information through on-line. It defines the E-business as any business activity that is carried over the Internet, not only trade but also servicing customers and / or collaborating with trading partners. E-Business (Electronic Business) is the process that companies are using to do business using network. Occurs when connecting a company’s computer systems to its customers, employees, distributors or suppliers, and all interact through the Internet, Intranet or Extranet’s. The property (production, promotion, sale and distribution of products via telecommunications networks), only for services (exchange of information through electronic transactions) or only from the business perspective (use of information technology to conduct business between buyers, sellers and partners to improve customer service, reduce costs and ultimately increase shareholder value) lead us to give a more inclusive and comprehensive definition as follows: E-business is the application of information technology to facilitate the sale of products, services and information across public networks based on communication standards. There must be at one end of the business relationship and a computer program on the other side or another computer program, or a person using a computer or a person with the means to access the network. ” The paradigm of e-business, comprising the combination of Internet with traditional information systems of an organization (Web & Information Technology) and can enhance critical business processes that are the basis and essence of a company. Applications based on the concepts of e-business is characterized by being interactive, transaction-intensive, and they allow a resumption of business into new markets.

E- Business Emerging Trends

As e-Business has taken off over the past few years the different associated domains and technologies have also evolved. We will take a look at some of the major trends associated with eBusiness: i. Commoditization of Application Servers ii. Content is the King iii. Open Source Frameworks iv. Integration Across the Enterprise v. Service related Architectures and Web Services vi. Collaboration vii. Grid Computing viii. E-Business has to Make “Sense”

Abusiness strategyis the means by which it sets out to achieve its desired ends (objectives). It can simply be described as a long-termbusinessplanning. Typically abusiness strategywill cover a period of about 3-5 years (sometimes even longer)

The direction and scope of an organization over the long-term, which achieves advantage for the organization through its configuration of resources within a changing environment to the needs of markets and fulfill stakeholder expectations”…Gerry Johnson and Kevan Scholes2

Levels of strategy

Inside an organisation, strategies can exist at three main levels. Again they can be illustrated by reference to MySpace and News Corporation

  • Corporate-level strategy is concerned with the overall scope of an organisation and how value is added to the constituent businesses of the organisational whole . Corporate-level strategy issues include geographical scope, diversity of products or services, acquisitions of new businesses, and how resources are allocated between the different elements of the organisation. For News Corporation, diversifying from print journalism into television and social networking are corporate-level strategies. Being clear about corporate-level strategy is important: determining the range of businesses to include is the basis of other strategic decisions.
  • Business-level strategy is about how the individual businesses should compete in their particular markets (for this reason, business-level strategy is often called ‘competitive strategy’). These individual businesses might be stand-alone businesses, for instance entrepreneurial tart-ups, or ‘business units’ within a larger corporation Business-level strategy typically concerns issues such as innovation, appropriate scale and response to competitors’ moves. In the public sector, the equivalent of business-level strategy is decisions about how units (such as individual hospitals or schools) should provide best-value services. Where the businesses are units within a larger organisation, business-level strategies should clearly fi t with corporate-level strategy.
  • Operational strategies are concerned with how the components of an organisation deliver effectively the corporate- and business-level strategies in terms of resources, processes and people . For example, MySpace engineers had to keep developing enough processing capacity to cope with the strategy of rapid growth. In most businesses, successful business strategies depend to a large extent on decisions that are taken, or activities that occur, at the operational level. Operational decisions need, therefore, to be closely linked to business-level strategy. They are vital to successful strategy implementation.

Advantages and Disadvantages

E-business involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners. Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business can be conducted using the web, the internet, intranets, extranets, or some combination of these.

Activities using e-Business tools include:

  • Trading of goods or services online, such as e-Procurement, primarily through the web-sites;
  • Electronic retailing (e-Tailing);
  • Use of the internet, intranets or extranets to conduct research and manage business activities;
  • Web-site marketing;
  • Online communications, such as e-mail; and
  • Online training for staff (e-Learning).

e-Business tools include:

  • Mobile phones;
  • Personal digital assistants (PDA);
  • Electronic Data Interchange;
  • File transfer;
  • Facsimile;
  • Video conferencing, internet, intranets and extranets.

Advantages

The benefits of implementing e-Business tools is not so much in the use of technology, but in the streamlining of business processes and the ease in finding new markets. Some of the advantages and disadvantages include:

  • Quicker and easier communications.
  • Strengthened marketing capabilities and reach.
  • Increased hours of operation (a web-site provides 24-hour seven day information to existing and potential customers).
  • Access to broader information through research.
  • Reducing the cost of doing business by lowering transaction costs and increasing efficient methods for payment, such as using online banking and reducing stationery and postage costs.
  • The opportunities to adopt new business models and develop tailored customer support.

Issues

•Online pricing compared to other pricing

–LCCs push online

–Full service carriers use consolidators and intermediaries to sell their discounted seats to protect the brand

•Bundling product

–Once the role of intermediaries but now consumers

•Survival of travel agents

–Commission versus service fee

–Tourist information & tour guiding

–Mobile phone technology

–Smart websites and search enginesConsumer preferences

•How do we get the various databases to communicate?

•Harmonise Project (EU project in tourism)

–Allows the reconciliation of different standards and provides the minimum ontology to formally describe the domain of reference.

–It will allow providers and users to communicate, while keeping their proprietary data formats.

•Growth of blogs (Consumer generated content)

•Will virtual travel replace real travel?

VALUE CHAIN of DMO

“Value chains are an integral part of strategic planning for many businesses today. A value chain refers to the full life cycle of a product or process, including material sourcing, production, consumption and

Refer Porter’s value chain in given slides in the class

Destination Management Company (DMC)

Adestination management company(DMC) is aprofessional services company possessing extensive local knowledge, expertise and resources, specializing in the design and implementation of events, activities, tours, transportation and program logistics. According to a DMC company website a "DMC is a service professional company with a wide-range of knowledge and experience over the conditions and touristic resources of a region

A DMC provides a ground service based on local knowledge of their given destinations. These services can betransportation, hotelaccommodation, restaurants, activities, excursions, conference venues, themed events, gala dinners and logistics, meetings, incentive schemes as well as helping with overcoming luggage barriers. By acting aspurchasing consortia, DMCs can provide preferential rates based on the buying power they have with their preferred suppliers.

Other services that a DMC can deliver are:

  • Reception at airports or bus stations
  • Gastronomy tours
  • Theme parties (traditional or modern).
  • Excursions and typical activities of the area.
  • Projects teamwork and collaborative.
  • Gifts for workgroups.
  • Decoration for events.
  • Entertainment events.
  • Suggestions and support for housing.
  • Graphic design and event signage.
  • Recommendations agents customs.
  • Car audio and video.