Review of Business Performance of Explore –Vlc and Importance of Gaining Competitive Advantage

This report analyzes the business performance of Explore –Vlc and the importance of gaining competitive advantage. It includes a review of sales trends, Porter's five force model, and disruptive technology. The report concludes with the importance of considering external factors and analyzing financial statements.

IBIS

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Review of Business Performance of Explore –Vlc............................................................3
2. Examine and explain the importance of gaining competitive advantage...........................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Explore Plc is an organisation which is based in Melbourne, Australia. It works as a tour and
holiday business which has tied-up with the other hotel business and also with the staff whom
got commission based on the sales made by the management. The tour includes activities such as
day tours, weekend tours, summer special, bicycle specials, mining specials, Bespoke cycling /
Camping. The organisation has always been in profits since 2017-18. It is continued till 2019, in
2020 the organisation has faced a lot of cancelation of orders, which have affected the
profitability of the business. The report is prepared to ascertain the financial position by studying
various activities of a business concern (Akhmetova and Seytbenbet, 2018).
MAIN BODY
1. Review of Business Performance of Explore –Vlc.
The above chart states that Explore Vlc. Sales trends shows that the company’s sales have
increased only in activities such as weekend tours and bicycle specials. In both the category of
the company it has shown positive impact in the sales and maintained their sales and also have
attained such growth of the business (Eaton and et.al.,2018).

Categories such as day tours, summer specials, bespoke cycling, bespoke camping and
others were had a good increase and they have shown an increment in their sales. But in the last
year these categories of the company have shown a decline in the sales because of the
cancellation of the tour packages by the clients of the company. These declines are also because
of the introduction of new competition in the market of new online sites and holiday tour
companies. Their existing customers are attracted towards theses new competitors because they
offer more discounted rates than the organisation. It is possible because they do not have
physical existence of the business which helps in offering the best possible prices in the market.
The organisation has to follow the following steps in order to make its decision making
sound:
1. Investigate on the existing situation of the business in detail.
2. Create an environment under which such situation can occur.
3. Generate alternatives according to the different situation.
4. Explore various options that can be exercised by the organisation.
5. Select the best option from the number of alternatives.
6. Evaluate the outcome of the plans.
7. Discuss the decision with the others and take decision.
Company can also start their operations on online platform which will help in reducing the
operating cost of the business concern (Kaçar and Işık-Güler, 2021).
2. Examine and explain the importance of gaining competitive advantage.
Porter’s five force models have in gaining competetative advantage over its competitors by
analysing the future uncertainties and future opportunities in the market. This theory is based on
attractiveness and intensity of the external environment.
There are five force model:
1. Supplier power: This model focused on the prices marked by suppliers in the industry.
This is based on the fact the number of suppliers in the market, uniqueness of the product,
their size and strength, opportunity cost of switching from one supplier to another. In the
following there are few supplier thus it does not affect the position of the firm in the
market.
2. Buyer power: This studies the impact of buyers in deciding the prices in the market. In
this buyers decide the prices of the product in the market. In the following case the

Explore Vlc. the buyers were in numbers thus with the coming of new supplier it has
caused decrease in the sales of the organisation. It is due the buyers were in number in
order to sell their product the sellers have to reduce prices of the product (Lee, 2019).
3. Competitive rivalry: The most impactful factor for any business concern is their
competitors which includes number of competitors and variety of products offered by the
business. In the following case the company was performing very well with its strategies
but with the introduction of its rivals have caused reduction in its sales.
4. Threat of substitution: When there is a close substitute available in the market then the
products are available at the discounted prices. In case of Explore Vlc, its online
competitors provide prices which are very low priced because they do not have their
physical existence in the market. Thus the company’s clients have switched towards its
competitors.
5. Threat of new entrance: The profitability of a business may be affected by the new
entrance of competitors in the market. In the following case, Explore Vlc. The entrance
of new competitors has caused fall in the sales and which have ultimately reduced the
profitability of the business (Lock, Schroeder and Eaton, 2019).
Disruptive technology
It is related to the advancement in technology that will result in the transforming business
as well as the industry. With the help of advance technology new business have been able to
offer prices that are very low as compared to the traditional businesses. It in be seen in the case
of Explore Vlc that the organisation sales got affected because of the introduction of new
technology and absence of physical existence have facilitated the competitors in making their
space in the well-established industry by providing advanced technology in the market (Miller,
2021).
CONCLUSION
From the above report it is concluded that the sales of the business organization is dependent
on the various factors. There are various external factors which have an influence over the
business activities. This is very important aspect for the business in order to identify the
difference forces which can impact on the sales of the company. In context of Explore Vic it is
analyzed that the sales in been declines from the past years. It is very important for the company

to take consideration the various aspect of the external environment and analyses using financial
statement the position of the company.

REFERENCES
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