Holmes Institute: International Strategic Management Report Analysis

This report provides a comprehensive analysis of Flight Centre Travel Group's international strategic management. It begins with an introduction to strategic management and globalization, highlighting the importance of understanding internal and external environments. The report then provides an overview of Flight Centre, including its history, global presence, and services. A detailed SWOT analysis examines the company's strengths, weaknesses, opportunities, and threats. Furthermore, a PESTEL analysis evaluates the political, economic, social, technological, environmental, and legal factors affecting the company's operations. The report also explores Flight Centre's competitive advantages, growth strategies, and market development approaches, offering insights into its success and future prospects. The analysis incorporates relevant academic research and industry data to support its findings.

1
INTERNATIONAL STRATEGIC MANAGEMENT
International Strategic Management
Name of the Student:
Name of University:
Author Note

2
INTERNATIONAL STRATEGIC MANAGEMENT
Introduction
Strategic management comprises of the processes which involve evaluation of strategies,
effective decision making and implementation of ideas which makes the business sustainable in
the industry and gain competitive advantage. Strategic management helps to analyze and develop
strategic goals by understanding the internal and external environment of the company (Oliver
and Schoff 2017). The objectives of the firm become easier to be implemented and achieve
success with the help of strategic management (Rothaermel 2016). Short term and long term
goals can we set for the company which can be achieved by developing effective plans. It is,
thus, very important to understand the environment in which a company operates which include
internal as well as external factors which play crucial roles in the process of company’s growth.
Globalization has been one of the reasons behind the increase of global tourism. It is
opened new doors and opportunities of international tourism across borders. Industry has grown
and shows signs of continuous growth in the years to come. It is also undergone changes and
evolution as time has passed. The number of people travelling outside one’s own country has
increased which makes the industry a very potential one. Organizations and governmental bodies
of countries who have promoted tourism and attracted people from across various locations in
the world. This has led to a rapid expansion of the global tourism industry. One of the very many
companies who have done great in the tourism industry is Flight Centre.
Company Overview
Flight Centre Travel Group is considered to be one of the largest travel agency to exist in
Australia. Retail Travel Company was established in 1981 which has its headquarters situated in
Brisbane (Fctgl.com 2020). The company has almost 2800 stores is as well as offices functioning

3
INTERNATIONAL STRATEGIC MANAGEMENT
under several corporate and retail brands. The business has flourished and spread across several
countries which include United States, New Zealand, Canada, United Kingdom, India, South
Africa, China, Hong Kong and so on. The company has on revenue from travel wholesaling is
well is retailing which also include Hotel Management services (Fctgl.com 2020). Flight Centre
travel Group limited also offers to its customers foreign currency exchanges through various
platforms which contributes to make peoples experiences worthwhile.
SWOT Analysis
The SWOT Analysis is very effective to evaluate the position of the organization in the
industry to make corrective changes wherever necessary. The aspects of the business which are
analyzed are Strengths, Weaknesses, Opportunities and Threats. The analysis can be made use
of, to the best advantage and diminish chances of risks and failures (Gürel and Tat 2017).
Effective strategies to help the company grow and be ahead of the competitive forces in the
market can be developed, based on the SWOT Analysis.
Strengths
1. Flight Centre travel group limited has great geographic presence in various regions in the
world. This suggests that company has been able to penetrate through markets in various
countries and to a massive audience who are able to access can avail services.
2. Flight Centre Travel Group has a diverse product portfolio which allows the customers
to choose the right products and services from the ones which are offered.
3. The company has been able to identify social networking sites and online platforms to
have great potential (Lu, Yang and Yuksel 2015). They have been able to build strong

4
INTERNATIONAL STRATEGIC MANAGEMENT
presence on online platforms which help them build better relationships with the
customers even when they are located at far geographical location.
4. The company has efficient, dedicated and hardworking human resources who contribute
to the growth of the company and gain competitive advantage in the industry.
Weaknesses
1. The company has been majorly credit for its waste management practices which is one of
the biggest concerns associated with them.
2. There have been instances when the company has not been able to understand the likes
and dislikes of the customers which are very important to develop products and strategies
to meet their needs (Businessnewsaus.com.au 2020).
3. Customer service of the company is not that capable how it should be to dominate the
market.
Opportunity
1. The great opportunity for business growth is there is rise in the population specific to the
segmentation of potential customers in the industry.
2. There is growing preference for social media and e-commerce usage among customers.
Flight Centre Travel Group should be able to identify this prospect in the industry.
3. The boundaries between countries are less rigid giving rise to better communication and
interconnectedness among countries. This is an amazing opportunity for the company to
widen the reach in the international market and enter developing countries which would
increase the profitability.

5
INTERNATIONAL STRATEGIC MANAGEMENT
Threats
1. The ever changing regulations may post serious threats to the operation of the company.
2. It is important to acquire the right talents and skilled labors to help the company grow.
Shortage of the same might lead to ineffective services.
3. The profitability of the business may get affected by factors such as rise of the cost of
production inflation rates.
PESTEL
PESTEL Analysis is a framework which is followed to assess the macro environment of a
business. The framework is a widely used one for strategic planning and management (Menet
2016). The acronym follows as Political, Economic, Social, Technological, Environmental and
Legal Factors which shape the business and it operates within. These factors affect the business
to a considerable degree (Sohel, Rahman and Uddin 2014). Flight Centre Travel Group Limited
is a company which operates within a complex industry which is characterized by its dynamic
environment. The industry gets subjected to turmoil and changes which affect the functionality
and operation of the company as well as the entire industry. Those aspects will be analyzed with
the help of PESTEL Analysis.
Political Factors  Political Stability of the country plays a huge role to determine
how operational a company can become in a given environment
(Sohel, Rahman and Uddin 2014). Flight Centre Travel Group
Limited is currently operating in various locations and countries
which make it vulnerable to political tensions. These can directly

6
INTERNATIONAL STRATEGIC MANAGEMENT
affect the business.
 Government introduce new policies which makes the
environment uncertain which might get difficult for Flight
Centre Travel Group to cope up with.
 Corruption and Bureaucracy are factors which influences a
company negatively. Many countries which have high rates of
corruption and law enforcement which is weaker in nature
(Sohel, Rahman and Uddin 2014). Issues related to Licensing,
Fraudulent lawsuits and contracting might come into play posing
hindrances in their operations.
 Restrictions posed to enter counties, such as high taxation and
protection of intellectual property rights should be paid close
attention to.
Economic Factors  Economic development of a country is a very important factor
which directly affects the company and its business. It might be
difficult to enter mature industry as there might be saturation
within the industry.
 GDP rate, exchange rates and interest are factors which affect
the company and its long term strategies. If the GDP is high, it
suggests that the consumers will be able to spend money on
products. The rate of exchange is also most likely to influence
international commerce and trade along with profitability (Sohel,
Rahman and Uddin 2014).

7
INTERNATIONAL STRATEGIC MANAGEMENT
 The wage rates which are received by labors is a very important
factor as it depends of the demand and supply of skilled labor in
the country. If the cost of labor is high, the cost of production
will also rise eventually. It is i0mportant to have the right human
capital to be successful in the business.
Social Factors  Demographic trends which include migration trend, population
and other socio economic variables are to be paid attention to, in
order to understand the expectation of the target audience in the
market.
 The power structure of the society plays a very important role as
there is growth of inequality which contribute to unequal
distribution of power and distribution which might affect the
company and its sales.
 Gender roles is a growing issue which should be paid attention
to and made scopes to contribute to positive development in the
country. Traditional and patriarchal expectations are to be
subverted by creating more opportunity for female workers and
consumers to be associated with the company.
Technological
Factors
 In the age of digitalization, social media marketing plays a very
important role. Employing innovate ways to market the products
will be affective to draw attention of the target audience.
 Newer technology can be made effective use of to reach to a
wider consumer base which will offer better facilities and

8
INTERNATIONAL STRATEGIC MANAGEMENT
features to the consumers.
 Newer technology as used and developed by competitive
companies are to paid attention to which leaves significant effect
on operations and bring micro and macro level changes in the
industry. Making use of disruptive technology will maximize
revenue collection and profits.
Environmental
Factors
 It is necessary to manage wastes effectively to contribute to the
management of pollution in a positive manner.
 Engaging in renewable and recyclable technology will help a
company to gain subsidies from the government which will
benefit the organization, i.e., Flight Centre Travel Group.
 The company could introduce ecofriendly initiatives which will
attract buyers and strengthen trust among the stakeholders.
 Exploiting the environment and not managing wastes may lead
to negative responses from customers, media and environment
protection groups.
Legal Factors  Flight Centre Travel Group should follow labor and safety laws
as many countries have strict laws and regulations.
 The company needs to pay attention to intellectual property laws
as not abiding by those may lead to losing of competitive
advantage.
 Flight Centre Travel Group should protect consumer privacy,
rights and security to maintain quality and standards of the

9
INTERNATIONAL STRATEGIC MANAGEMENT
services which are offered to them.
Competitive Advantage
Flight Centre Travel Group Limited is deriving its revenue collection by wholesaling and
retailing services online as well as offline. The company has over 19,000 employees working for
the company which makes it possess a strong human capital. The company has major tie ups
with big hotel brands and companies in the countries it operates in which adds competitive
advantage to the company profile. Flight Centre Travel Group Limited also maintain tie ups with
airlines which makes them offer services to the customers availing services from the airlines
companies (Fctgl.com 2020). This makes them immensely successful and profitable in the
industry.
Some of the major competitive rivals in the industry are Travel Perk, Victorianz and
Headout as the competition happen very neck to neck in the industry and influence each other’s
business. TravelPerk, Victorianz and Headout is a comparatively new company whereas, Flight
Centre Travel Group Limited was established in 1981. This makes Flight Centre Travel Group
Limited have a better presence in the industry for having been in the industry and serving patrons
for a far longer tenure (David and David 2016). The company has thus gained great market share
in the industry. Flight Centre Travel Group Limited has its locations across diverse geographic
sites whereas, the other companies are largely restricted to host country and few other places.
Flight Centre Travel Group Limited has immense presence on the social networking sites which
is an added advantage for the company.
Growth Strategies

10
INTERNATIONAL STRATEGIC MANAGEMENT
The company is entering new markets and countries to spread its business and make
expansions. Flight Centre Travel Group Limited has grown eventually after spreading across
many countries in the market. The company have sustained through changing conditions of the
market. The company offers quality service and travel experiences to its customers though online
channels and retail spaces (Fctgl.com 2020). The services include hotel management, tour
operation, destination management companies.
The company follows Market development, which can be understood with the help of
Ansoff Matrix as it is followed in Flight Centre Travel Group Limited. The company has entered
new markets and offered their existing products and services to cater to the consumers in the
market. The strategy has been immensely effective for the company to be successful in the
market as the behavior of the consumer do not vary much from the existing markets. The
company has employed strategies such as catering to a different segment of customer, expanding
in a regional as well as international market.
Recommendation
1. Flight Centre Travel Group Limited can introduce newer and customized services and
products in new markets according to the needs of the customers.
2. The company can come up with packages such as offering discounts on perusal of travel
bucket lists. Flight Centre Travel Group Limited can develop packages which meet the
expectations of the company.
3. The priority of the company has been market development, as can be understood with the
help of Ansoff Matrix, but they can follow diversification to cater to greater customer
base. The company has long followed Market Development which has proven to be

11
INTERNATIONAL STRATEGIC MANAGEMENT
effective (Businessnewsaus.com.au 2020). Taking risk and initiating Diversification will
help the company cater to different sections of the society.

12
INTERNATIONAL STRATEGIC MANAGEMENT
References
Businessnewsaus.com.au (2020). Flight Centre profits under strain despite e-commerce take-off.
[online] Business News Australia. Available at:
https://www.businessnewsaus.com.au/articles/flight-centre-profits-under-strain-despite-e-
commerce-take-off.html [Accessed 24 Jan. 2020].
David, F. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson–Prentice Hall.
Fctgl.com (2020). About Us - Flight Centre Travel Group. [online] Flight Centre Travel Group.
Available at: http://www.fctgl.com/about-us/ [Accessed 24 Jan. 2020].
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).
Lu, Q.S., Yang, Y. and Yuksel, U., 2015. The impact of a new online channel: An empirical
study. Annals of Tourism Research, 54, pp.136-155.
Menet, G., 2016. The importance of strategic management in international business: Expansion
of the PESTEL method. International Business and Global Economy, 35(2), pp.261-270.
Oliver, J. and Schoff, P., 2017. Agency and Competition Law in Australia Following ACCC v
Flight Centre Travel Group. Journal of European Competition Law & Practice, 8(5), pp.321-
328.
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.