Strategic Management: Analysis and Recommendations for Flight Centre

This report provides a strategic analysis of Flight Centre Travel Group, recommending a merger strategy to enhance profitability. It includes a detailed examination of the company's internal and external environments, incorporating PESTLE and SWOT analyses to assess its market position and competitive advantages. The report evaluates current strategies, proposes changes to business units, and discusses organizational structure adjustments to facilitate smoother operations. Furthermore, it outlines processes for monitoring and controlling implemented strategies, addresses potential issues, and suggests evaluation methods for managers. The analysis emphasizes the importance of adapting to technological advancements and improving brand positioning to ensure the company's long-term viability and success in the travel industry. Desklib is your go-to platform for accessing a wide range of solved assignments and past papers to support your academic journey.

Strategic Management
Flight Centre Travel Group
6 / 7 / 2 0 1 8

STRATEGIC MANAGEMENT 1
Executive Summary
Strategic planning is very important for the successful survival in the market so as for Flight
Centre Travel Group. This report is aimed towards recommending a strategy for the company
such as Merger for the increased profitability. The report has identified the general internal
and external environment of the travel industry along with industry and competitor analysis
which has helped in knowing successfully the position of the company. Moreover, merger
strategy will be fruitful for the company as it will help in improving the marketing strategies
and diversification of the product.

STRATEGIC MANAGEMENT 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Recommended Strategies.......................................................................................................3
External Analysis...................................................................................................................4
PESTLE Analysis...............................................................................................................4
Industry Analysis...............................................................................................................5
Competitor analysis of Flight Centre Travel Group..........................................................6
Stakeholder Analysis..............................................................................................................6
Internal Analysis....................................................................................................................7
Balanced Scorecard............................................................................................................7
Value Chain Analysis.........................................................................................................7
Competitive Advantage......................................................................................................7
Evaluate/Assessment of Current Strategies.......................................................................8
SWOT Analysis.................................................................................................................9
Long-Term Viability of Company...................................................................................10
Theory related to Implemented strategy..........................................................................10
Business units need to be changes...................................................................................10
Organizational Structure..................................................................................................10
Staff and Skills.................................................................................................................11
The process of Monitoring and Controlling.....................................................................11
Method of Monitoring......................................................................................................12
Issues related to implemented strategies..........................................................................12
Evaluation of the strategies..............................................................................................12
Method of Evaluation.......................................................................................................12
Evaluation method for Managers.....................................................................................13
Conclusion................................................................................................................................13
References................................................................................................................................14

STRATEGIC MANAGEMENT 3
Introduction
Strategic planning is significant for every company as it offers direction and outlines of the
measurable goals. It is said to be a tool utilized for directing daily decisions and assessing the
progress and altering approaches while moving forward (Lohrey, 2018). This report is
focused towards planning strategies for Flight Centre Travel Group which will support it in
surviving for longer-term in the industry. The report will highlight company’s internal and
external environment and stakeholder analysis. Besides this, it will discuss what parts of the
company’s business need to be changed for smooth functioning. Further, monitoring and
controlling of the strategies will be provided and issues that are associated with the
implementing strategies. Evaluation of the strategies will be provided in the report.
Flight Centre Travel Group Limited offers retailing services of travel under single brand i.e.
Fight Centre in corporate, wholesale, and leisure travel sectors across the world. Other travel
brands of the company are comprised of Student Flights, Liberty Travel, Escape Travel,
Infinity Holidays, Travel Associates, Infinity Holidays, Cruise about, Corporate Traveller,
GOGO Vacations, FCm travel solutions, Campus travel, Stage and Screen, and Cievents. It
provides leisure services of travel in order to serve niche sectors, along with mass, premium,
cruise, and youth markets; and corporate services of travel to cater the requirement of the
organization of different sizes all over the industry. Besides this, the company also provide
services and products to its network of international and national retail outlets. Further, it also
provides various other services like travel academies, bike retailing, and foreign currency,
employee benefit, and recruitment marketing businesses (Bloomberg, 2018).
Recommended Strategies
Recommended Strategy Reason Priority

STRATEGIC MANAGEMENT 4
Competing of Edge Competing of Edge theory
can be used by the company
because it will be beneficial
for longer-term and helps the
company in remaining
always updated.
High
Blue Ocean Strategy Blue ocean strategy will help
the company in focusing on
the future growth as it is a
systematic approach and
creates value and eliminate
cost.
High
Merge Strategy If Flight Centre Travel Group
opts to adopt merge strategy
then it will help it in creating
new products and
understanding customers
more specifically.
High
External Analysis
PESTLE Analysis
Political The terrorism, coups, warfare, and violence
have an adverse direct effect on the travel
industry's development

STRATEGIC MANAGEMENT 5
Economic This industry is paying good compensations
to its employees. The profit of the industry is
effective in handling the positive position in
the market.
Social The innovative culture established by the
industry has appealed the customers. The
company has always maintained the values
and norms of the environment.
Technology Travel Industry has always adopted the new
and innovative technology. It includes
airlines, buses, and trains as a transport mode
and casinos and hotels.
Legal The Travel Industry should follow all the
rules and regulations formed by the state
government that are indirectly and directly
related to the complete traveling procedure.
Environment The basic concerns related to the
environment are effective utilization of oil
and fuel in the traveling (Pratap, 2017).
Key Success Factor of Travel Industry is the Market position, diversification, distribution and
marketing network, and operating management.
Industry Analysis
Supplier’s Bargaining Power Medium to low

STRATEGIC MANAGEMENT 6
Buyer’s Bargaining Power Medium to high
The threat of Substitute Goods Medium to low
Rivalry among competitors High
Entry Barriers Medium to high
The travel industry possesses some players who dominate the industry. They hold a
maximum of the market shares and they also affect the shaping and structure of the industry.
The players of the industry are normally focused towards generating profit just need to have
an effective strategy. Therefore, it requires a strategy that helps in making it easy for the
customers to know more about the firm.
Competitor analysis of Flight Centre Travel Group
Flight Centre Travel Group is one of the largest outlets of travel with the head office in
Australia. The overall turnover of the company is $20 billion and has 20,000 employees
besides, this it is listed on the stock exchange of Australia. Some of the competitors of the
company are Travelport Locomote, Global Work and Travel Co., Smaller Earth, and Travel
perk. The Travelport Locomote advertises its services with the help of mass communication
tools such as Advertisement. Along with this, it makes use of celebrities to promote the
services and products.
Stakeholder Analysis
Stakeholders are those people who possess some interest in the business activity like
customer, employees, government, society, etc.
Flight Centre Travel Groups is very much focused towards their stakeholders it tries to fulfill
their needs and desire in the market. However, it is suggested that company need to focus on

STRATEGIC MANAGEMENT 7
all the stakeholders because just focusing on a single group of stakeholder can create issues
and result in losses for the company.
Internal Analysis
Balanced Scorecard
Perspectives Objectives Measure
Financial perspective Increasing International Sales
Increase in the revenue
% of revenue from
international sales
15% increase in ROE
Customer Perspective Satisfaction of customer and
acquisition
Lifetime value for the
customer
Internal business process
Perspective
The decrease in employee
turnover
Employee satisfaction by
offering perks, benefits, and
bonus.
Learning and Growth Adopting new and innovative
technologies
Increasing number of clients
or customers
Value Chain Analysis
Value chain analysis can be used by the company as its support in identifying methods to
reduce cost, eliminating waste, optimize effort and increasing profitability of the company.
Competitive Advantage
VRIO Analysis
VRIO is said to be an internal analysis of the company. It is utilized to recognize and assess
resources of the company. It involves four criteria i.e. value, rarity, imitability, and
organization (Jurevicius, 2013).

STRATEGIC MANAGEMENT 8
The resource of the company i.e. human resource, destinations and packages of the tour
provides value to the company. The resources of the company provide a competitive
advantage to the business.
The resources of the company are not rare because many of the other companies also offer a
similar type of services by using a similar type of resources, however, the way of utilizing
those resources is different.
The resources of the company are not imitable because the management of the company is
very skilled and frame strategies that are different from the competitors.
The business is organized because it makes maximum use of its resources in order to get
success in the market (Frue, 2017).
Evaluate/Assessment of Current Strategies
The current strategies of the company are to upsurge the productivity in short run in three
major sectors:
Retailing of Leisure travel, which is securely largest sector of FLT in terms of sales
Corporate travel, which accounts for the success of the overall business
The TEN which is a new and quickly growing pillar of business
In the sector of leisure travel company desires to make multiple channels to improve the
interaction with the consumers in all the brands like high touch channel, low cost an 24/7
services. As per the analysis of the external environment travel industry is one of the
developing industry, therefore it has potential to improve the customer service.
In the sector of corporate travel, the company is focused towards developing the sector.
Technology will be utilized because it will enable corporate travelers to remain linked and

STRATEGIC MANAGEMENT 9
track the performance. It will be very expensive to imitate, therefore, this is the strategy that
will be effective for the company.
The TEN as the business pillar. If the company will invest in this strategy it will provide
various benefits for the company that will be aligned towards fulfilling strategic objectives,
comprising control over the experience of the customer.
SWOT Analysis
Strength- Company has a positive track record of assimilating complimentary companies by
acquisitions and mergers.
It has talented and skilled workers by successful learning and training programs. It has
invested a huge amount of resources in the development of its employees.
Weaknesses- The product’s marketing is not up to the market. It is known that the products
are performing goods in terms of sales however they have poor brand positioning and USP
(unique selling proposition).
The company does not have effective technologies. In today's business environment it is very
important to be updated with the technologies however company is not able to do so.
Opportunities- Company has the opportunity to cover new customers with the help of online
channels.
The company can adopt new standards of technology and free trade agreements of the
government that can help it in entering into new and developing markets.
Threats- One of the major threat to the company is its incapability in offering innovative and
new products in the market.

STRATEGIC MANAGEMENT 10
Another threat is of new and advanced technologies developed by the competitors of the
company (Fern Fort University, 2018).
Long-Term Viability of Company
The financial statement of the company is reflecting the positive position of the company in
the market as it revenue has increased in 2017 by 1.3 % which reflects that it is capable to
survive in the market for a longer time duration in the market (Flight Centre Travel Group,
2017). However, due to some weaknesses such as lack of technological environment, the
poor brand positioning of the products can create obstacles for the company while moving
towards growth.
Theory related to Implemented strategy
Pure Diversification Theory of Merger- Performing diversification by mergers is
commonly known as diversification by internal growth. This strategy is adopted when
managers of the company demand for the diversification for tax advantage, and reputational
capital.
Business units need to be changes
Flight Centre Travel Group Company need to do change and can eliminate some of its leisure
brands from its portfolio. These brands can be Escape Travel and Cruiseabout (Skift, 2018).
This can be done to attain market share and perform mergers in diversified business that can
increase the market share of the company and customer base.
Organizational Structure
Flight Centre Travel Group needs to do some changes in its organizational structure because
it is only compatible with its current model of business, therefore, restricting expansion in
diversified product segments. The company can adopt divisional organizational structure

STRATEGIC MANAGEMENT 11
because in this company can possess various basis on which different departments are created
such as geographical territory, functions, combination approach, product.
Source [(Policy Council, 2018)]
Staff and Skills
In order to perform merger in the diversified business flight center travel group need to hire
staff which will be skilled and experienced in the adopted merger strategy and can effectively
manage the functions of the business. The company needs to conduct recruitment and
selection to hire skilled and desired employees that can help in attaining success and growth
by maintaining the viability of the company.
The process of Monitoring and Controlling
In order to monitor and control the recommended strategies company need to follow the
following procedure:
 Forming standards in order to measure the actual performance
 Measure Actual Performance
 Comparing actual performance with the set standards
 Take corrective actions (£opatowska, 2015)