A travel agency is considered as public service or private retailer which provides the tourism and travel related services. It provides the services on the behalf of suppliers or to general public. The travel agencies are responsible for providing airlines, cruise lines, railways, recreation activities, car rentals, hotels, travel insurance, package tours, guidebooks etc. They also serve as the general sales agents for some airlines which do not have their offices in particular regions. Travel agencies can be independent operations at small or large level (Morello, 2020).
Every company whether big or small, requires the growth strategy to grow. As many companies’ strategic objective is to expand and grow across the globe. Ansoff matrix helps the company in planning the expansion strategies. The matrix suggests the growth strategies in combination of products and markets by analyzing the companies’ strategic position. Here is the Ansoff matrix analysis of Travel agency.
Market Penetration
Market Penetration is the strategy suggested by the Ansoff matrix. This strategy focuses on increasing the market share by penetrating deeply in the market. Companies adopt this strategy focus on increasing the current product sales in the current market they are serving to. This is the east risky strategy. Travel agency is a wide industry. Travel agencies can penetrate in the market by more advertisements and marketing techniques. They can introduce new packages, offers, discounts etc to encourage people for travelling. They can also take care of the whole trips in reasonable charges, as this will make it easier for the travellers for business or holiday purpose. Competitive pricing strategy also helps the company in growing (Marketing, 2020).
Product Development
Product development is the second strategy suggested by Ansoff matrix. This strategy suggests the companies to expand its product portfolio by introducing new product for the current market. The new product development can be the introduction of completely new product for the existing consumers, or the different versions of existing product. There are few travel agencies who do not offer all the services like hotel bookings, travel insurance etc. They can introduce these to gain more consumers who prefer this with their airline tickets. Travel agencies can also provide the service of tour guides if needed by any consumers. Moreover, they can also takeover small travel agent or go for mergers (UK essays, 2018).
Market Development
Market development is the strategy suggested by Ansoff matrix. This strategy encourages the business to expand in other markets with the existing products. the company in this strategy attracts new consumers base. The company explore new markets either geographically or demographically. There are travel agencies who operates internationally. They expand itself in new geographical locations to increase the customer base. Travel agencies who operate at large level can also takeover other travel agencies in the region they are intended to expand. This is a risky strategy as operating in new markets and targeting the new customer base is time consuming and requires huge capitalization (Robinson, 2016).
Diversification
Diversification is the riskiest strategy suggested by Ansoff matrix. This encourages the company to introduce completely new product for the new markets it was not operating before. This strategy helps the company in diversifying the risk to larger areas. Company opt for this by identifying the consumer needs and demands of the products in the regions. This is a risky strategy but if it gets hit, company can take advantage of it. This strategy also opens the door of new opportunities for the businesses. Travel agencies diversified its services by offering hotel bookings, and car rentals etc. Travel agencies can further diversify themselves in marketing industry. it can promote and market the different tourism locations and gain the commission from the government (Marketing, 2020).
References
Marketing, 2020. Marketing in travel and tourism. [Online], Available at: https://allassignmentexperts.com/sample_assignments/marketing/Marketing%20In%20Travel%20and%20Tourism.pdf, [Accessed on: 19th February, 2020].
Morello, R. 2020. How does a travel agency make money? [Online], Available at: https://smallbusiness.chron.com/travel-agency-make-money-55659.html, [Accessed on: 19th February, 2020]
Robinson, P., Fallon, P., Cameron, H. and Crotts, J.C. eds., 2016. Operations management in the travel industry. Cabi..
UK Essays, 2018. Analysis of The Tourism Industry Marketing Essay. [Online]. Available at: https://www.ukessays.com/essays/marketing/analysis-of-the-tourism-industry-marketing-essay.php?vref=1, [Accessed on: 19th February 2020].