ory strategy, manufacturing strategy, customer service strategy and the strategy of integration.
Tourism comprises of different industries' product and service like of Hotels, accommodation, transport, destination etc. SCM strategies can be modified to suit the nature of the product.
Sourcing Strategy -Sourcing mainly constitutes
Make or buy decision
Manufacturing management
Capacity Management
Make or buy decision: Services can be delivered directly or can be outsourced/Co-Sourced as done by Thomas Cook a reputed name in providing tourism services. Thomas Cook implemented strategic sourcing arrangement with Accenture by outsourcing its Back-Office activities. Through this model they were able to improve operations and reduce its cost, by US $ 243.72 million in just 16 months.
Manufacturing management: In tourism, manufacturing component is limited only to certain sectors like food and craft, memento, gifts etc. Services are processed at each stage in the tourism. For example, in transport sector at airport different services like visa and immigration processing, waiting time etc are processed to deliver the maximum satisfaction to the travellers. At the destination the service is processed by providing safe environment and security to the tourists.
Capacity Management: The tourism products are subject to instability of demand. Example during Muscat festival in Oman, the demand exceeds the supply in many of the sectors of tourism like in hotels and airlines. Airlines meet this excessive demand by increasing the capacity by introducing additional special flights at special rates.
Distribution strategy
In tourism industry, the distribution strategy has far reaching impact on the development of the industry. This makes it essential that the channel decisions are sound so that the beginning and end process of marketing are managed efficiently and effectively.
A basic understanding of the structure and working of the distribution system in travel industry, including the middlemen who form the part of the system, is found essential to understand the Economics of the tourism industry. The current practices insist on four types of sales distribution of tourism as a product.
One stage system: This system provides direct sales from primary suppliers of the services to consumers through its own reservation departments. E.g. airlines directly selling tickets to travellers through its reservation office.
Two- stage system: This system involves single middlemen i.e travel agent.
Three-stage system: This system involves two middlemen, retail travel agent and wholesaler or a tour operator.
Four-stage system: This system involves a retail travel agent, wholesaler and additional middlemen known as Speciality Chancellor, who is instrumental in the development of tour packages.
Inventory Strategy: An inventory of tourism products identifies the opportunities and constraints that a local authority has in attracting visitors to their town/ city/region. The number and range of attractions and activities, things visitors can see and do, are particularly important. Gaps in the product range and/or poor quality facilities will make places less attractive to visitors. In the same way lack of transport and accommodation will deter visitors from travelling to and stopping at the destination. Until an inventory of attractions, activities, accommodation and transport has been completed and this is matched w
