Flight Centre: Strategic Management Report - HC3141, Holmes Institute

This report provides a comprehensive analysis of Flight Centre's strategic management. It begins by exploring the company's micro and macro-environments, including its consumers, suppliers, online presence, employees, and shareholders, as well as the political, economic, technological, and legal factors impacting its operations. The report then delves into Flight Centre's competitive advantages, such as its diverse flight offerings, online and physical presence, and expert travel consultants. It examines the company's differentiation strategy and details its growth strategies, including diversification through acquisitions in the hospitality and ground operations sectors. Finally, the report offers recommendations for Flight Centre to improve its business performance, such as utilizing video marketing and creating specialized brands. The report concludes by summarizing the key findings and emphasizing the importance of understanding the tourism industry and the factors that influence Flight Centre's success.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the student
Name of the University
Author note

1STRATEGIC MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Micro and macro-environment of Flight Centre........................................................................2
Competitive advantage...............................................................................................................4
Strategy......................................................................................................................................5
Growth strategies.......................................................................................................................6
Recommendations......................................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................9

2STRATEGIC MANAGEMENT
Introduction
International Strategic Management refers to the management planning process which
helps in developing the strategies that allows an organization in expanding itself in the
international arena. It helps a company in achieving the strategic fit in between the
competence of an organization and global environment where the company wants to operate.
It helps an organization in competing in the international front and strategic planning is
helpful for the company in the development of the international strategy. Flight Centre refers
to largest retailer of the travel within Australia which has the headquarters in South Bank
Brisbane (Flightcentre.com.au 2020). The portfolio of the company comprises of the niche
brands that features 1300 business within Australia. The company helps the people in
booking the flights and the hotels that have resulted in the immense popularity of the
company. This report discusses about the micro and the macro-environmental elements
pertaining to the company. This report elucidates on the aspect of the competitive advantage
of the company and the generic strategies which have been adopted by company. This report
talks about the growth strategies of the company and the strategies that can be made use of by
company that can help in improving the operations of company.
Micro and macro-environment of Flight Centre
The consumers are main players within the framework of tourism industry because
demand for travels is dependent on the interests along with the ability of the people. The
people want to plan the holiday trips on the basis of their preferences so that it can enhance
user experience. Flight Centre have the Global Procurement Network that have helped the
company in the maintenance of the supplier relationships along with the distribution
platforms. It have helped company in the field of hospitality contracting that have helped in
providing benefits to company. It have enabled the company in maintaining strong

3STRATEGIC MANAGEMENT
relationship of company with the hotel along with the ground transport suppliers. The number
of the internet users have grown in Australia in the recent times and number of the active
social media users have undergone increase within Australia. Flight Centre have the online
community that have helped the people in knowing about the various kinds of deals on the
airfares, tours along with the vacation packages. The employees working in Flight Centre
have the skills along with the knowledge that have helped in maximising the performance of
the company. The workers have the work-life balance along with the job security which have
provided the satisfaction to the employees of company. There are various shareholders of the
company like Bennelong Australian Equity Partners Limited, Ellerston Capital Limited,
DWS Investments along with the Black Rock Fund Advisors. Flight Centre have
strengthened the business of the global corporate travel by making the investment in The
Upside Travel Company that was launched in the year 2017. The competitors of Flight
Centre are Locomote, Business World Travel, Hello world Travel and Travel port Locomote.
The political system of Australia is on the basis of liberal democratic tradition that
have ensured the stability within the framework of the country. The Constitution of Australia
lays out rules along with responsibilities of the government that have taken care of the
political condition in the country. Australia was not affected by the global financial crisis and
it possess the resources that have ensured the economic growth of the country
(Austrade.gov.au 2020). Australia have the most successful economy in the world that can
have a positive effect on the growth of Flight Centre. Australia is wealthiest of Asia- Pacific
nations and the economic expansion that have taken place have provided the people with a
good standard of the living. It can have a good effect on the prospect of Flight Centre and
affect its profitability within the framework of Australia. Australia can be said to be a
technologically advanced nation and the households having the access to the internet have
risen since the year 2004 (Abs.gov.au 2020). It can be instrumental in the growth of Flight

4STRATEGIC MANAGEMENT
Centre that can strengthen its hold in the market. There exist large number of the legislative
instrumental that are responsible for the governing of the environmental regulation within
Australia. Law of Australia consists of different level of the codified along with the
uncodified form of the law. The Constitution acts as legal foundation of the Commonwealth
of Australia that helps in setting federal system of government.
Competitive advantage
Flight Centre enjoys the competitive advantage that have been helpful for the
company in getting an edge among rival companies. Company offers domestic, international,
multi-city along with the round the world flights that have helped in satisfying the needs of
the diverse customers of the company (Li et al. 2017). Flight Centre have the online along
with the physical presence that have helped in creating the competitive advantage for the
company. It have made it difficult for the competitors to steal the dominance of the company.
The stores of the company are in the high streets and within the shopping centres that have
helped in leveraging the capacity of the organization. It have helped in the retention of the
customers and it have helped in the positioning of the company. The brick and the mortar
stores of the company delights the customers that draws them towards the company
(Trigeorgis and Reuer 2017). The company advertises the new offers across the store network
that have ensured the profitability of the company. The company communicates about the
deals in storefront with the help of the digital screens which have helped company in getting
new customers. Company have pursued vertical integration opportunities that have helped the
company in selling the third-party products to the consumers (Demir, Wennberg and
McKelvie 2017). It have been instrumental in offering a seamless along with the integrated
travelling experience for the people. The company have acquired the ground handlers along
with the hotels within Asia that have enabled the company in being popular among the
people. The firm possess expert travel consultants that have provided company with real

5STRATEGIC MANAGEMENT
advantage above the competitors. The company have made use of the virtual reality within
the retail stores that have highlighted unique services of company (Holmes et al. 2018). It
have aided company in making profits that have helped it in rising above the competitors.
Figure: Profit of Flight Centre
Source: Flightcentre.com.au 2020
Strategy
Flight Centre follows the differentiation strategy which have made company in
distinguishing service from other companies in market. Company can be said to be unique in
the industry as it offers the services that provide the value to the people. The travel agent
have transformed itself into the world-class retailer with the help of the facility of the
customer insights of the company (Hitt, Li and Xu 2016). The company is operative within
the 11 countries and it possess thirty brands under it which includes the Flight Centre, Escape
Travel, Student Flights along with the Explore Holidays that have increased the popularity of
the company. The company distributes content with the help of the various channels that have
facilitated optimal utilisation of resources. The company have been instrumental in the
creation of the in-house creative studio that have helped in strengthening brand in all the
media along with the digital streams (Luo and Bu 2018). The company provides the tailor-

6STRATEGIC MANAGEMENT
make holidays and creates the exclusive packages that have addressed the new demands of
the people.
Figure: Features of Differentiation Strategy
Source: Panibratov 2017
Growth strategies
Flight Centre have adopted diversification strategy that have enabled growth of the
company within market. The company have been successful in acquiring the Bespoke
Hospitality Management Asia (BHMA) which is the Thailand-based operator of the lifestyle
hotels along with the resorts. The company have invested in hotel sector that have been
advantageous for company. Company has been instrumental in operating 14 properties within
Thailand and they have 19 other properties under the development within Thailand and the
Vietnam (Rothaermel 2016). Company have acquired the 100 % stake within the Olympus
Tours which is a ground operator of Mexico. It have helped in strengthening the foothold of
the company within the main markets like Mexico, Dominican Republic along with Costa
Rica. It have helped in continuing the expansion in the area of the destination management
(Knight and Liesch 2016). The company have acquired the ground operator Buffalo Tours in

7STRATEGIC MANAGEMENT
Asia that have enabled the company in earning profits. Buffalo Tours along with the
Olympus Tours have helped the company in generating around $ 100 million in terms of the
annual revenue.
Recommendations
There are certain measures that can be adopted by Flight Centre at the functional
along with the business level that can improve business of company. Flight Centre can make
use of the video that can prove to be useful in explaining the guiding philosophies of the
company. It can help in the area of functioning of company as it can provide the uniform
standard for the employees that can bring about the improvement of the performance of
business of the company (Panibratov 2017). The short videos can be posted on the platform
of the social media that can aid in process of expansion of company. It can be instrumental in
improving the conversion rate of the customers for the company that can take the company
ahead in the future. The video can help in increasing the click through rate of the company
that can build the relevancy for the customers.
Flight Centre can create the specialized brands that can aid in the growth of the
market segments of the company. It can help the company in capturing the new market that
can help company in deriving benefits. It can create the way for the growth in the market
share of the company that can provide the company with a dominating position in the market.
Conclusion
The customers are crucial to the tourism industry as the demand of the travels depends
on interests of people. Flight Centre possess Global Procurement Network which have
enabled company in maintaining supplier relationships and that of distribution platforms.
Flight Centre have the online and physical presence which have aided in the creation of the
competitive advantage for the company. Stores of the company are located within the main

8STRATEGIC MANAGEMENT
areas that have proved to be successful in leveraging capacity of organization. The company
have taken recourse to the diversification strategy which have helped in developing the
company within the framework of the market.

9STRATEGIC MANAGEMENT
References
Abs.gov.au (2020). 8146.0 - Household Use of Information Technology, Australia, 2016-17.
[online] Abs.gov.au. Available at: https://www.abs.gov.au/ausstats/abs@.nsf/mf/8146.0
[Accessed 12 Feb. 2020].
Austrade.gov.au (2020). Why Australia Benchmark Report 2018. [online] Austrade.
Available at: https://www.austrade.gov.au/International/Invest/Why-Australia/robust-
economy [Accessed 12 Feb. 2020].
Demir, R., Wennberg, K. and McKelvie, A., 2017. The strategic management of high-growth
firms: a review and theoretical conceptualization. Long Range Planning, 50(4), pp.431-456.
Flightcentre.com.au (2020). Cheap Flights, Hotels, Tours, Cruises and Holidays - Flight
Centre. [online] Flight Centre. Available at: https://www.flightcentre.com.au/ [Accessed 12
Feb. 2020].
Hitt, M.A., Li, D. and Xu, K., 2016. International strategy: From local to global and
beyond. Journal of World Business, 51(1), pp.58-73.
Holmes Jr, R.M., Hoskisson, R.E., Kim, H., Wan, W.P. and Holcomb, T.R., 2018.
International strategy and business groups: A review and future research agenda. Journal of
World Business, 53(2), pp.134-150.
Knight, G.A. and Liesch, P.W., 2016. Internationalization: From incremental to born
global. Journal of World Business, 51(1), pp.93-102.
Li, C., Brodbeck, F.C., Shenkar, O., Ponzi, L.J. and Fisch, J.H., 2017. Embracing the foreign:
Cultural attractiveness and international strategy. Strategic Management Journal, 38(4),
pp.950-971.

10STRATEGIC MANAGEMENT
Luo, Y. and Bu, J., 2018. Contextualizing international strategy by emerging market firms: A
composition-based approach. Journal of World Business, 53(3), pp.337-355.
Panibratov, A., 2017. International strategy of emerging market firms: Absorbing global
knowledge and building competitive advantage. Routledge.
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal, 38(1), pp.42-63.