Paradise Vacation Case
Key Decisions: * Should Leduc agree to Air India’s offer? * What’s the company’s competitive strategy for 2008/2009? * How to respond to FunTours’ expansion and aggressive pricing strategy?
SWOT Analysis: Paradise holds strong buyer power which enables it to bargain for lower price and discount. As market leader and Quebec company, Paradise can promote itself through reminding customer about company hisotry to strength their preference and loyalty . The weakness lands at that Quebec is the only market in Canada; the collapse of one location will damage the entire business. The threat mainly lands at pricing competition from FunTours.
Competitive Analysis and Consumer Analysis: Because Paradise has its main market in Quebec, Benoix is the main competitor. However, the biggest threat comes from FunTours’ expansion currently. The competitive advantage of FunTours is its low pricing strategy. Travelling is has an elastic demand. With price being the most important determination, FunTours ' strategy could drive Paradise out of the market. This strategy targets at mid and base segment of the market. It creates threat to the same segments for Paradise, which represent 90% of the revenue. Nonetheless, Quebec is a brand new market where FunTours does not have supplier connections or customer loyalty yet. FunTours serves no premium market where 10% of the revenue comes from for Paradise. Therefore, Paradise can utilize its bargain power with its suppliers to ask for lower prices, also lower its retail price to keep customers from switching to new brand, and advertise to strengthen brand loyalty. Segment | Focus | Conclusion | Base | Low price | Lower price than FunTours offers | Mid | Best value | Lower price than FunTours offers, and special promotion with higher value. | Premium | Luxury service | Lower price to prevent customer from downgrading to Mid segment. Keep agents as partial distributors for better services. |
Recommendation : Base and Mid
SWOT Analysis: Paradise holds strong buyer power which enables it to bargain for lower price and discount. As market leader and Quebec company, Paradise can promote itself through reminding customer about company hisotry to strength their preference and loyalty . The weakness lands at that Quebec is the only market in Canada; the collapse of one location will damage the entire business. The threat mainly lands at pricing competition from FunTours.
Competitive Analysis and Consumer Analysis: Because Paradise has its main market in Quebec, Benoix is the main competitor. However, the biggest threat comes from FunTours’ expansion currently. The competitive advantage of FunTours is its low pricing strategy. Travelling is has an elastic demand. With price being the most important determination, FunTours ' strategy could drive Paradise out of the market. This strategy targets at mid and base segment of the market. It creates threat to the same segments for Paradise, which represent 90% of the revenue. Nonetheless, Quebec is a brand new market where FunTours does not have supplier connections or customer loyalty yet. FunTours serves no premium market where 10% of the revenue comes from for Paradise. Therefore, Paradise can utilize its bargain power with its suppliers to ask for lower prices, also lower its retail price to keep customers from switching to new brand, and advertise to strengthen brand loyalty. Segment | Focus | Conclusion | Base | Low price | Lower price than FunTours offers | Mid | Best value | Lower price than FunTours offers, and special promotion with higher value. | Premium | Luxury service | Lower price to prevent customer from downgrading to Mid segment. Keep agents as partial distributors for better services. |
Recommendation : Base and Mid