(HOS801_PGRD3255) Strategic management assignment discussing strategic management issue at Flight Centre Travel Group
Task: Write a strategic management assignment on one critical strategic management issue for an organization of your choice in the tourism and hospitality industry.
The tourism and hospitality industry is one of those industries which have huge potential to generate more revenue. After the pandemic situation, this industry has witnessed a significant rise in revenue bases. This industry solely believes in serving customers with the best quality services. Management is one of the main departments in every organisation in this industry to look after the customers. In order to provide the best service to the customer, a strategic approach is required. Otherwise, if the customer is not happy with the service then the organisation may experience loss. This strategic management assignmentwill be based on a strategic management issue. Flight Centre Travel Group is chosen here and the increase in customer value is the management-related issue which will be highlighted here.
Findings discussed in the strategic management assignment
Background of the organisation
Flight Centre Travel Group is a renowned name in the tourism and hospitality industry. As per the strategic management assignment findings, based in Australia, this organisation was founded in 1982 by Graham Turner and Geoff Harris. The headquarters of the organisation is based in Brisbane, Australia. Across the world, under many names, this organisation is trying to operate its business. In Canada, New Zealand, the United States, India, and Hong Kong this organisation is trying to advance its functions while generating a huge amount of revenue. As per the statistics of 2020, there are at least 6,000 employees working with this organisation. Across the 40 countries in the world, this organisation is trying to do business while providing the customers best ever services. Importance of strategic management explained in the strategic management assignment Management is the most important department for any organisation trying to do business in the tourism and hospitality industry. These organisations are mainly customer-centric organisations trying to provide the best services to the customers. Hence, it is quite important to have a management department which will help the organisations run the business properly. It is quite important for this industry to have a strategic plan (Matarazzo et al., 2021). For an organisation like Flight Centre Travel Group, it is analyzed from thstrategic management assignmentthat management should have some strategies to help huge numbers of customers across the globe. In order to serve customers in around 40 countries, it is quite essential to have some strategies. The organisation currently is having issues with an increase in customer value. The management department is not able to deal with this issue for certain reasons.
Increased customer value
As per the strategic management assignment findings, customer value simply refers to the perspectives of the customers about a product or a service. That simply means customers have their own preferences while making some products worthy and some totally useless. Flight Centre Travel Group actually provides more freedom to the customers. In the meantime, they are having serious issues with increased customer value. Customer Value can be good for a while for any organisation (Rêgo et al., 2021). If the consumer thinks that the product or service is worth it, then they will pay the exact amount to avail of the product or the service. But in any case, if they think that the concept has no worth, then the product or the service becomes useless. As per the strategic management assignment the future of the organisation may become very unpredictable because the driving force is in the customers’ hand. In order to avoid such issues, often the organisation has a few strict policies. In the case of Flight Centre Travel Group, they are experiencing an increase in customer value. If the customers are given more opportunities to decide the value of the product, it will be a bit problematic for the organisation. It is not much factual and customers are deciding the success of any products and services (Yen, Teng, & Tzeng, 2020). Thus the creativity of the management team in Flight Centre Travel group diminishes slowly. It is found from the strategic management assignment that their innovative ideas often get blocked because of increased customer value. Customers often may lower the price of the products and services and thus the organisation may face more troubles while generating revenue. In case of increased customer value, customers often may ask for more specifications in the products and services. This will consume a lot of manual labour, energy and financial resources. Flight Centre Travel Group may suffer from loss if the customer values increase in a significant way. Increased customer value will jeopardise the management system for a while. It takes huge efforts to work on various strategies which may help the organisation. Management now needs to think of potential ways to keep customer values in check. At the same time, management needs to focus on a few strategies which will help to build more revenues from the market without even taking help from the customers (KetchenJr, & Craighead, 2020). At the same time, it is found in the strategic management assignment that customers may often ask for more benefits and specifications from the products and services provided by the organisation. Flight Centre Travel Group may have a serious impact when the customers ask for more benefits. Management needs to focus on market trends in order to understand the reason behind the increased customer value, As well comparing the prices of other organisations may help Flight Centre Travel Group to understand the situation (Hitt, Arregle, & Holmes2021). This will be a very hectic scene if the prices of products or services lower all of a sudden or the customers ask for more benefits. A few recommendations are added in the strategic management assignmentto help Flight Centre Travel Group to survive in such a situation.
While doing business in more than 40 countries across the world, it is quite necessary for every country will have its own trends in the tourism and hospitality industry. At the same time, the people in these countries may have their own ideas while choosing various products and services from Flight Centre Travel Group. The increase in customer value may often help the customers while it has the power to control the cost structure of the organisation (Zadeh, Zolfagharian, &Hofacker, 2019). When the consumers are given the power to decide the cost structure it may become a bit problematic for any organisation. It is quite essential to devise a few recommendations in the strategic management assignmentwhich will have a significant impact on the strategic management procedures of the organisation.
Doing a proper market research
Proper market research is needed in order to solve the problems with increased customer value (Fuertes et al., 2020). If the managers know about the requirements of the customers then it will be easy for them to enhance their production. At the same time, market research will provide them with more knowledge of market trends. As per the strategic management assignment thus they will easily be able to devise new plans for products or services. At the same time, market research will give them an idea about the cost structure. They can control the cost structure from their sides only.
Gathering customer feedback
It will be helpful enough if the customers are engaged in the procedure. Proper and effective communication may help Flight Centre Travel Group to bring them in. They can together discuss the improvements in customer value. At the same time, customers may ask to leave feedback (Carvalho, & Alves, 2022). As per the strategic management assignment this feedback will give an idea about more improvisations and their requirements in the organisation. This may be sent to their mailbox or messages directly which will help to communicate with the customers. Gathering this feedback will enlighten the organisation about the requirements of potential customers across the world.
Focusing on quality
Though the quality of services of Flight Centre Travel Group is excellent, still people look for more quality services. For this reason, it is high time to focus on quality and improve it within the given price range (Bindra, Parameswar, &Dhir, 2019). As per the strategic management assignment it will be quite beneficial for the organisation if the organisation may provide the best quality within a very cheap cost structure. Eventually, more consumers may feel attracted to the products and services. Thus the profitability of the organisation will enhance in a significant way. Enhancing quality will also provide more opportunities to control the customers.
Focusing on customer demographics
While devising strategic plans from the management teams, it is quite important to understand the customer demographics . While understanding the customer demography, it will help the managers to devise a potential plan targeted to those customers only. At the same time, it is found in the strategic management assignment that this will enhance the sales of products and services across the organisation when the customers are targeted. For example, if some tour plan is arranged within a moderate price range providing more facilities for women solo travellers, then young women would definitely buy this (An, & Han, 2020). Thus targeting a customer base will be easier after understanding the demographics and it will help to maintain the customer value.
It is quite important to implement strategic managerial approaches to provide best services to the customers. As per the strategic management assignment analysis customers are the main sources of revenue. In the hospitality industry, it is quite necessary to maintain the atmosphere and service while treating a customer. Here, Flight Center Travel Group is experiencing an issue with customer value. In order to mitigate the situation, the management team devised a few strategies which may help the organisation. At the same time, it is found from the strategic management assignment that it is quite important to understand the long-term effects of these strategies on this organisation. Being in the hospitality industry, often the trends may get changed and Flight Center Travel Group needs to be aware of that.
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