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Situation Analysis for Travel Agency

Introduction—Situation Analysis

For establishment of natural a travel agency in Canberra, situation analyses encompass assessment of external factors as forces which affect the market as a whole for Kieran. The travel agency in cannot influence these forces and but injecting the $100,000 would try to accommodate and adapt to the environment for the opportunities and risks. This study analysis the situation considering the external environment and ways in which it can be accompanied by the Kieran and his travel agency’s approach to determine competitive advantage. Travel agency’s approach is focused on the factors that favour the establishment of travel agency that will ensure this business becomes a success to the owners as well as the buyers in Canberra (Grasset & Titov, 2014). There are competitors in the market who have similar businesses and better approach is to be made upon analysis to take care of such. Australian government budget indicates that the outlook for the Australian economy is favourable, with growth, low unemployment and inflation all well contained. Therefore, establishment of travel agency targets Australians and tourists of all ages including those in low and middle economy.

Travel Industry Analysis

Political and legal factors

In as much as this industry faces substantial competition from other companies that offer almost similar services, there is a negligible political influence. Traveling industries have been dominated by companies such as the Global Work & Travel Company. The legal factors that affect this industry are, however, of gross importance. Marketing decisions are strongly affected by legislation, government regulations and pressure from competition and social groups in in Canberra (MacKinnon, Verkuil & Murray, 2012). This is turn is a risk factor for Kieran’s travel agency since losses in profit and marketing, as well as losses in terms of damaged company reputation, can be realised (Lo, Mak & Chen, 2014). Constant visits by the Australian Federation of Travel Agents Limited (AFTA) are aimed at ensuring adherence to regulatory framework for all travel agencies in Canberra. Failure to observe these comes with intolerable consequences such as complete closure of the business.

Economic Factor

The Canberra economy has a very sustainable trend, even with the nominal GDP growth being subdued (Lin, Lee & Wang, 2012). There has been a stiff growth and competition economically in travel agency (Rice, 2010). This is attributed to the continued investments in Canberra, which is also advantaged by the fact that it is strategically positioned and is the capital city of Australia as a nation. The general public, especially the working class and higher institution consider travels during their vacations (Merla, 2015).

Social Factors

In terms of socio-cultural factors, the growth of travels, need to explore both socially and educationally, and the growing demographic shift in taking up different cultures for different generations positively affect the expansion of travel agency in Canberra. However, conservative nature of some communities or families who chooses to hire their vehicles for similar course remain as some of family or society based decisions and initiatives that may decrease revenue for Kieran, especially that the company is expanding its services using only $100,000.

Technological Factors

Advancement in technology has seen the development of high technology cars fitted with trackers, alarm systems and speed monitoring devices that help boost travel agency businesses. Additionally, Australia, and Canberra in particular, is focusing on rapid and continued implementation of cloud computing as one of the plans of National Broadband Network which travel agencies can rely on in integration of their travel schedules, data backing and tracking processes (Sharam & Hulse, 2014). It also enhances real time service where orders can be made and the desired product prepared as soon as the order occurs.

Technology has also made it easier to advertise products, conduct sales online and make communication between business participants effective. Different social media channels such as Twitter, Facebook and Google+ can be used at different occasions to help conduction of feedback, analysis and other activities that make it simpler for the business to be carried out without hurdles.

Cultural Factors

In terms of cultural orientation, travelling agencies enjoy competitive advantage within Canberra. There is continued growth of online education and the growing demographic shift regarding the need to take vacation and safety measures that come along using travel agencies (Sharam & Hulse, 2014). It is for this reason that most people would register with travel agencies to take different trips rather than using family means of transport (Sharam & Hulse, 2014).

Competitor Analysis

The only viable competitors of this business are those that already involved in traveling businesses operating within and outside Canberra but still having their headquarters within Canberra. In terms of strategic development, the travel agency will be able to reach even further improvement in service standards. Considering lifestyle demand, change of service and a feel to have different environment many people prefer taking travelling agencies (Sharam & Hulse, 2014). However, key competitors in the industry include:

  • Travel Designers

  • Flight Centre Canberra

  • Active Travel and

  • Travel Makers

All these agencies offer competition due to market deregulation. Again, their pricing schemes do not favour constant variation in the market including low and high seasons (Sharam & Hulse, 2014). Additionally, these companies are favoured by competition due to increment of entry barriers, driven by the industry deregulation.




S1: Economies of scale and outreach on different travel plans and schedules

S2: Strong relationships with suppliers and other hotel agencies having had experience in hotel industry

S3: Brand reputation connected to 5 years of experience

S4: Having loyalty from customers derived from one-stop-shopping solutions.

W1: Strong dependence on customer loyalty and experience from hotel services

W2: Weak internal funding position

W3: Asset-heavy strategy.

Popularizing the business may take quite some time

Has not greatly taken route in the country


O1: Growing economy and increasing domestic consumption of travelling agencies in Canberra

O2: Favourable governmental regulations in the sector

O3: Advancement of technology including adoption of 4G networks for coverage, online booking and freight management.

T1: Increasing costs of operations and advertisement

T2: Increased competition due to market deregulation

T3: Increased communications and media convergence.

Other business minded people may come up with the same business but different brand to offer stiff competition


Lin, Y. H., Lee, Y. C., & Wang, S. C. (2012). Analysis of motivation, travel risk, and travel satisfaction of Taiwan undergraduates on work and travel overseas programmes: Developing measurement scales. Tourism Management Perspectives, 2, 35-46.

Lo, A. S., Mak, B., & Chen, Y. (2014). Do travel agency jobs appeal to university students? A case of tourism management students in Hong Kong. Journal of Teaching in Travel & Tourism, 14(1), 87-121.

MacKinnon, J., Verkuil, Y. I., & Murray, N. (2012). IUCN situation analysis on East and Southeast Asian intertidal habitats, with particular reference to the Yellow Sea (including the Bohai Sea). Occasional paper of the IUCN species survival commission, 47.

Merla, L. (2015). Salvadoran migrants in Australia: An analysis of transnational families’ capability to care across borders. International Migration, 53(6), 153-165.

Rice, K. (2010). ‘Working on Holiday’: Relationships between Tourism and Work among Young Canadians in Edinburgh. Anthropology in Action, 17(1), 30-40.

Sharam, A., & Hulse, K. (2014). Understanding the nexus between poverty and homelessness: Relational poverty analysis of families experiencing homelessness in Australia. Housing, Theory and Society, 31(3), 294-309.