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The Operating Environment - Coggle Diagram

- - - - Economic
        
        All factors that indirectly may impact negatively on disposable income and thus demand for tourism and/or on the expenditure of tourist as well as the cost of tour operators.
      - Political
        
        Under direct control or influence by government
        
        May include: legislation and regulation, economic policy, governmental international policy
      - Sociocultural
        
        Influences include demographics
      - Technological
        
        The travel sector has always been at the forefront of new technologies
      - Environmental
        
        Disasters caused by nature
        
        Sustainability
      - Legal
        
        Includes the legislation and regulation of companies
  - - - Can be used to audit the organization and its environment
        
        Weaknesses
        
        Opportunities
        
        Strengths
        
        Threats
    - - Industry Rivalry
        
        The ability to understand the competitors, in particular their marketing strategies and product.
      - Suppliers' Bargaining Power
        
        The uniqueness and scarcity of potential suppliers will dictate the level of bargaining power of the tour operator.
      - Buyers's Bargaining Power
        
        Influence on the demand for products and have impact on the price that can be charged by operators.
      - Threat of New Entrance
        
        According to the ease or difficulty involved on the part of new operators seeking to enter the market.
      - Threat of Substitutes
        
        Can limit the opportunity for companies to raise prices. It depends on 2 factors: the closeness of the subtitute in terms of price and performance and/or the willingness of buyers to switch the products.
- - - - Focus on premium products features
        
        Specially targeted to the needs of customers
        
        Create to the customer perception that the product is subtaintially better than that of the competition
      - Rely on innovation, research and development
    - - Focus on reducing cost
      - Replicating an existing product while utilizing less-experience resources
      - Economy of Scale are achieved for this strategy by standardization
    - - Aim at a specific segment of the market, a niche market
      - Adopted by small or medium-sized enterprises
  - - - The market envidences growth potential for a specific product
      - The product does not need to be changed, but can be exploited further.
    - - New products are introduced to existing markets or existing products are modified in some appropiate.
      - Aim to increase the level of purchase by existing customers and thereby increase market share.
    - - Focus on the entry to a new market
      - Sell existing products to new markets
        
        A potentially new target market segment
        
        Targeting a new geographical source of potential customers
        
        Adopting new methods of distrubution
    - - Indentify new products and new markets concurrently
      - Can be adopted in 2 ways
        
        Into products that are unrelated to the market they work in
        
        Diversify within the same market (diagonal diversification)
- - - - Gaining futher economies of scale by increasing their demand from suppliers
      - Increase market share
      - Reduce competition
  - - - Forward (downstream) vertical integration
      - Backward (upstream) vertical integration
    - - Ensure control over supply and pricing
      - Ensure a consistent level of customer service
      - Provide opportunities to reduce transaction costs and gain economies of scale
      - Minimize the cost of distribution
      - Ensure increased awareness of the product