CFA Voyages

The second company interviewed is called CFA Voyages. Established in 1986, with only 3 staff members to begin with, this travel agency has gone through many changes and experienced a lot of growth in staff and services. CFA Voyages has three store fronts established only in Paris, France. Their main products are packaged tours to different regions in Europe and selected regions in Asia. The product mix and promotions are determined by the best contracts they are able to attain with their selected suppliers. Although this company does not usually have any exclusive relationships with suppliers, they have a selected few whom they work with often.

Many of their supplier relationships are contractual where they promise to meet quotas for the year to gain “super commissions” which bring in the bulk of the company revenue. Their longest and closest relationship is with Thai Airways. Thus their margins for packages to Asian regions are the largest as Thai Airways would often give them exclusive deals.

The company’s target market is Asian residents living in France and countries around France.

This is considered a very niche market that they tailor to. They have been targeting this market strategically as they have only opened store fronts in areas of Paris where there are large groups of Asian residents. They have not expanded much outside of this market which is already highly saturated with competitors.

The company promotes new packages and promotions seasonally but rarely creates changes to their packages. They established a website in 1996, one of the first travel agencies to use a website in France. Although they ran into a lot of problems in the beginning with their website

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since the infrastructure for travel agencies to have an online presence was not yet in place, they are now one of the few travel agencies in France with a well established website with a well established customer base. They do however provide a plethora of services including insurance, flight ticket booking, train ticket booking, cruise tour bookings, and call centers for customer service. Later, they had also included online booking services directly through their website. This new service boosted sales significantly so much so that they found that their sales have grown to a point where call center was needed which was installed when they opened their third storefront.

The company’s main focus on creating growth and staying sustainable within the hypercompetitive market is to improve quality of service rather than lower prices to compete with their competitors. They have training periods where they train all of their staff to take phone calls from customers to present a professional face for the customers. This helps them boost the value in their customers’ perspectives. The company also has internal frameworks set up to have sales representatives compete against each other for bringing in the most sales. This fodders an incentive to work harder to gain customer trust and attract new customers to choose the company for travel needs. Management in the company also found another way to improve procedurally and streamline the speed of conducting sales within the company. They had set up an intranet where they were able to quickly get updates about airline tickets in order to provide faster service for customers.

The company however, does not have any plans for future development in other areas of the world. The management has been characterized as conservative and not willing to try out new

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channels of distribution until it has been thoroughly tested and proven to have valid returns on investment. They are experiencing a high saturation of competitors that are attacking their advantage with extremely low pricing. This company is considerably an older company with many years of growth; however, they have been reaching stagnation in the more recent years.

They are also experiencing the pressures of disruption in the travel industry as part of their main customers (younger generation) are now able to access and purchase directly from their suppliers.

This shortening of the supply chain puts at risk of becoming obsolete if they stay with their traditional way of conducting business. Also, as the company showed rapid growth rates in the first 15 years of conducting business in the travel industry, the company had been experiencing higher and higher difficulty in being flexible and reacting to changes in the environment within the last decade after the boom in technology and its effects on the travel industry. An example that the representative gave was during the year of 2004, when the outbreak of SARS had scared travelers outside of Asia and sales were remarkably low; the company was not able to react well to this turn of events. Rather than searching for new opportunities as the monumental event leveled the playing field for all travel agencies who focus on package tours to Asia, the company was paralyzed and had to suffer some losses.

This company has also exhibited using the signaling approach to mislead their competitors. The interviewee had mentioned an incident when they were looking for a new location to open a new store; their competitors were threatened by this event. Their communicating to their competitors on the prospect of opening a new store indicated their strength in growth and although they were

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only in the beginning stages of looking for a new location, their competitors already felt threatened.

Table 2: CFA Voyages Performances in the Four Dimensions

Dimensions Evaluation Score

Focus on Developing New Advantages

-This company seems to not be willing to change from their traditional ways of conducting business.

-They have been adding new services and utilizing technology to improve on their quality of service and product.

-Their conservative attitude in investing in new channels to boost their company growth has hurt them and become slow in adapting to new opportunities in the market.

Low

Making Small Moves

-The company pushes out new promotions and package tours seasonally.

-Internal moves that help improve customer service efficiency.

Medium

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-This company has garnered many different types of products for customers to choose from. This allows them to have a better spread on sales and attract more customers.

-They have different goals each year to attain that management determines through collaboration with their suppliers. This action can be hard to predict by competitors.

Medium

Misleading the Competition

-This company does induce some signaling actions to mislead or intimidate their competitors.

Low