Strategic Positioning of Travel Agencies: Competition Analysis

To develop and refine your own positioning, it is important to understand the positioning of your competitors. The purpose of this article is to give you practical tools to analyze your competitors.

What is competitor analysis?

Competitor analysis is the systematic examination of competitors’ strategies, service offerings, strengths, and weaknesses. Ideally, we would like to have the same information about competitors that we have about our own agencies. Clearly, this ideal condition will never exist. It is surprising, however, the amount of competitor information available if one takes the time and effort to search for it. A close examination of competitors will help you identify potential threats to your business and opportunities for differentiation.

Competitor positioning maps

A useful technique used in competitor analysis is called Competitor Mapping. A map is simply a graphical representation of the relative positioning of competitors along two or more dimensions. Dimensions should be attributes that allow you to make meaningful distinctions between competitors. In general, these attributes should reflect how clients perceive the distinctions between competing agencies. Attributes of importance to leisure travelers when selecting a travel agency, for example, may include location, agent’s knowledge of the destination, range of vacation packages offered, price, business hours, credit terms and parking facilities.

Competitor mapping is a useful tool for summarizing information about competitors and displaying it in a way that helps understanding and decision making. It can help answer questions like “Why am I losing business to the agency next door?” or “What new services or products could you offer that a competitor doesn’t currently offer?”

What information is collected?

When deciding what information to collect, remember the reasons for doing the exercise in the first place. You want to understand the positioning of your competitors, their strategies, capabilities, resources, strengths and weaknesses. Understanding your competitors’ past actions (strategies) combined with knowledge of their capabilities helps you predict future strategy and action. These insights are invaluable in identifying threats and opportunities in your market and in formulating your own strategies.

Below is a checklist of basic information you should have about your competitors. Accumulating this information over time will allow you to put together a complete picture of a competitor’s situation.

Competitor Information Sources

• Internet (Google, etc.)
• Trade publications
• Local newspapers
• Suppliers (eg, airlines, hotels, auto dealers)
• Clients (and clients of the competition)
• Employees

Trade publications and newspapers are excellent ongoing sources of information. You should be in the habit of regularly clipping articles or quotes from competitors. Bits of information that, by themselves, don’t seem significant, can provide important clues about competitors’ philosophies, strategies, and plans when analyzed as a whole.

Airline representatives have excellent general knowledge of competitors which they will often share, as long as such sharing does not violate confidentiality requirements.

Clients can provide you with valuable market intelligence, such as what a competitor is offering in proposals. Even a competitor’s customers will talk to you if you approach them saying you want to understand what services they currently receive, so you can offer more or better services. Customers are your best source of information to determine current positioning, both yours and your competitors’.

Employees are an often overlooked source of information. Some of your employees have worked for competitors at one time or another. It’s not unethical to discuss the competition with employees, as long as they feel comfortable doing so. Also, don’t forget about your salespeople—they’re exposed to competition every day.

Preparing for competitor analysis

Competitor analysis is an ongoing task that requires some internal discipline. The first time requires the most effort. After that, maintaining your competitor files is relatively straightforward. The following are some tips to “systematize” the analysis of the competition.

Hold Someone Accountable – Place the responsibility of tracking down competitors with a trusted lieutenant or do it yourself. Make sure the person responsible makes the function a regular routine.

Develop an intelligence network: Cultivate contacts who can provide you with information they read or hear. If necessary, consider using a clipping service.

Keep Files-Sounds obvious, but often overlooked. The true value of a competitor’s intelligence system will become apparent after a significant volume of data has been accumulated.

Competitor Information Checklist

VITAL STATISTICS

• Size ($, location, employees)
• Market share and growth
• Business combination (commercial/retail)
• Client mix (large accounts, small accounts)
• Affiliate consortia
• Affiliation of carriers
• Ownership (private/public, family/corporate)
• Years in business
• Number of points of sale

PRODUCTS AND SERVICES

• Website
• Range (broad vs. narrow, general vs. specialized)
• Customer segments served
• Image of the “brand”
• Prices

MARKETING AND SALES

• Advertising (media, frequency, content/emphasis, spending
• Proposals, promotional material
• Sales force (how many, how good)
• Preferred providers
• Target customers/market segments
• Recent new account additions/losses

HUMAN RESOURCES

• Number of employees
• Level of Experience
• Rotation
• Compensation/incentive systems
• Training programs
• Productivity
• Recruitment policies/practices

FINANCIAL STRENGTH

• Cost effectiveness
• Access to financing
• Overlaying
• Cost of operation

ORGANIZATION

• Reporting structure and relationships
• Management skills, experience, depth
• Ability/willingness to adapt to change
• Administrative philosophy
• Succession plans

OPERATIONS

• Facilities (size, room for expansion, appearance)
• Automation (computers, telephone system)
• Centralized vs decentralized reserves
• Capacity for new business
• Delivery systems

OTHER

• Reputation and general image