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Analysing supply issues in tourist transport (Theoretical perspectives on…
Analysing supply issues in tourist transport
Theoretical perspectives on tourism and transport supply issues
Perfect competition
There are a substantial number of consumers and firms, implying that neither can
affect the price of an undifferentiated product
There is free entry to and exit from the market, assuming that there are no barriers
Contestable markets
Information and supply conditions are available to all producers and, whilst producers cannot change prices instantaneously, consumers can react immediately
New and established firms are able to challenge rival businesses through pricing strategies
Monopoly
Best described as the opposite of perfect competition, where a major business or firm is able to exercise a high level of control over the price of the product and level of output
Oligopoly
An oligopoly exists where a limited number of producers dominate the transport sector
In an oligopoly, each firm controls its price and output levels and there are entry and exit barriers
The supply chain in tourist transport services
Descriptions of the industry and its operation, management and marketing
The spatial development and interactions that characterise the industry at different
geographical scales
Transaction analysis
Maximise profit by eliminating costs
Reduce the price to the consumer to boost market share
Increase their level of concentration in the tourism industry
Integration in the tourism sector: implications for the supply of tourist transport
Integration is based on the concept of common ownership, which may involve the coordination or control of the production process or may have no direct effect on it
Horizontal integration occurs where two enterprises with the same output combine to increase the companies’ control over output. It can occur through mergers, acquisitions, collaboration, franchising agreements and more complex contractual arrangements, and may induce concentration in the same business
Vertical integration occurs when an enterprise with different interests and involvement in the supply chain acquires or merges with companies contributing inputs to its activities, or where output purchasers provide a ready market for the service