Design of cost efficient tourist routes to multiple destinations
Unique service provided by Chinese speaking tour guides
Personalized service to satisfy the demands and preferences of Taiwanese tourists
Ability to provide full support to regional partners along all stages of the service performance
Small size tour operator
Newcomer facing mature competition
High initial costs for training of tour
Limited financial resources
Opportunities Threats
Huge long term potential in East Asia and China
Central America as an uncommon tourist destination
Facing a weak competition by other regional tour operators may allow to lead the Chinese segment
Partnership with support services suppliers (Transport, Hotels and Restaurants)
Affiliation to international Tour Operators Associations
Weak demand for tourist services by the Taiwanese market
Entrance on the Chinese segment of more experienced competitors
Increase in price of transport services
Unstable political situation in the countries of the region
Increase of violence in the Central American region
High barriers to entry into the market
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- Alliances with main Taiwanese tour operators: In order to take advantage of the Taiwanese market, the partnerships with Tour Operators will allow the company to promote directly to the travelers our tours and destinations. Networking is important in this matter, and the fact of staying in Taiwan for long and studying a prestigious program in a main University (國立政治大學) helps making connections with these partners easier.
- Design of cost efficient tourist routes to multiple destinations: The Central American region offers many different attractions that can be combined on different routes, depending on the duration of the excursion and the travelers’ budget. That includes Mayan archeological sites, volcanoes, lakes, beaches, traditional towns, forests and city tours. Offering multiple routes, and emphasizing on saving costs through efficient logistics, would allow us to provide a high quality service at a competitive price.
- Unique service provided by Chinese speaking tour guides: One of the main distinctions from our company is to provide unique service through well trained Chinese speaking tour guides. The recruitment, training and retention (6.4 Organizational Structure) of these employees is a core competency that guarantees tourists to get the most of their experience and enjoy an unforgettable journey.
- Personalized service to satisfy the demands and preferences of Taiwanese tourists: Each culture has specific elements and features that makes people to generate determined expectations when traveling. By specializing on the Taiwanese market, our service will be focused on fulfil these expectations and providing the best possible service according to the Taiwanese standard.
- Ability to provide full support to regional partners along all stages of the service performance: The service performance during a tour circuit involves an active participation from the regional tour operators on providing the necessary logistics in place to tour guides and drivers. We encourage our partners to provide the highest service standard so they would need to rely on our support in case of any unexpected situation happening on the road.
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structured organization with more personal can be reached by the expected increase in demand.- Newcomer facing mature competition: Although regional Tour Operators haven’t profit from all the potential that the big Chinese market offers, they account with enough experience on the American and European market. Therefore, by entry a different segment does not guarantee success as a newcomer on the tourism business when competing with these experienced companies.
- High initial costs for training of tour guides: The strategy of hiring mother tongue Chinese speakers as Tour Guides imply that these personal would not have the professional background on tourism. Therefore, recruitment and training of Chinese speakers may represent a significant cost that would be cover in the long run, inasmuch as such Tour Guides gain experience and provide a professional service. However, there is also important to ensure the retention of these employees through the appropriate remuneration and avoid other Tour operators copying our business model (6.4 Organizational Structure).
- No affiliation to Tour Operators Associations: There exists Tour Operator Associations on every single country of Central America. However, these institutions are close circles that usually don’t allow new tour operators to enter and gain some share from their operations.
- No travel agency or transport company support: Some few Tour Operators in the region belong to bigger tourism groups on which supporting services such as travel agencies and transport back up the business. The advantage of this model lies on the reduction of operating costs when making use of their service. Since the support of these partners is not available to our company, such services will be strategically outsourced on the several suppliers in the market.
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- Limited financial resources: The financial resources, since initially they are very limited for a startup, may be managed wisely in order to balance revenues and expenses and promote growth.
5.4. Opportunities
- Huge long term potential in East Asia and China: Since the model of a tour operator can be replicated to include multiple countries, the opportunity of profiting from bigger markets in Asia makes the region very attractive for expanding the business on that area. After a primary focus in Taiwan, a later expansion to China and other countries with larger Chinese population is very feasible.
- Central America as an uncommon tourist destination: Most Asian travelers’ first choice for a trip abroad includes the neighboring Asian countries, Europe, North America or boarding a cruise ship. South and Central America is more considered as an exotic, unexplored and remote place. This fact boosts the region’s attractiveness for exploring its tourist destinations.
- Facing a weak competition by other regional tour operators may allow to lead the Chinese segment: Other regional tour operators have tend to become very competitive in the American and European market. However, the opportunity to enter the Chinese market involves both, great challenges and also great reward when companies are able to profit from it.
- Partnership with support services suppliers (Transport, Hotels and Restaurants): Working together with transport companies, hotels and restaurants imply creating business partners that would profit from the same demand of the tour operator itself. Identifying the best support service suppliers will allow the tour operator to create alliances and negotiate tariffs that would decrease operation costs.
- Affiliation to international Tour Operators Associations: Several Associations that promote the ties between all kinds of tourism companies offers a good platform to find valuable business partners all over the world and give a more international profile to the company.
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- Weak demand for tourist services by the Taiwanese market: The biggest threat for our Tour Operator is that the demand projections don’t reach the necessary levels to run the business model because of a low market acceptance.
- Entrance on the Chinese segment of more experienced competitors: Regional competitors that already have years of experience working with the American and European segment would find attractive to entry on the Chinese segment if it turns profitable. That would increase the competition in the short-medium term.
- Increase in price of transport services: The costs of transportation are determined by the oil prices and the magnitude of the supply for this service. There is also a risk that for one reason or other, the cost of this service can increase and affect the profits.
- Unstable political situation in the countries of the region: For decades, the unstable political situation in the Central American region has led to numerous cases of corruption, impunity and coups d'etat on every single country. As recent as 2009, there was a coup d'etat in Honduras that produced several political implications to the region.
“La Linea” was a very recent (2015) major corruption scandal in Guatemala. And in the case of El Salvador, a former President was forced to spend months under arrest for a major corruption case in 2014. Therefore, unexpected political situations can happen at any moment on the region, and have economic consequences that cannot be estimated with certainty.
- Increase of violence in the Central American region: El Salvador, Honduras and Guatemala has suffered on the last decade from increasing violence by street gangsters and drug cartels. These countries have reached murder rates of over 12 persons per day, so the implications for societies and economies -including the tourism industry- are of major relevance and there are no signs that show any improvement.
- High barriers to entry into the market: Although there are few regulations for startups in El Salvador, Tour Operators may register in the Ministry of Tourism of El Salvador. Therefore, the bureaucratic process could tend to length a couple of months and be subject to a revision that could delay to start running the company.
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The market segmentation is the foundation for stablishing an effective marketing strategy. It allows to divide the market into segments of consumers. Each single segment represents a group of people with similar characteristics that make them to respond similarly to a marketing stimulus.
A market segmentation requires to use criteria in terms of the individuals sharing similar characteristics. This criteria is divided in terms of:
- Geographic - Demographic - Psychographic - Behavioral
In order to divide the market into segments, there is going to be used a Geographic (Region, country) and Demographic (Age, Family size) criteria.
Geographic segmentation (Region, country):
- United States
- Canada, Australia, Great Britain and other English speaking countries - Europe and Russia
- Latin-American region
- East Asia region (China, Japan, Korea, Taiwan, Hong Kong, Singapore, Vietnam, Malaysia, Thailand, The Philippines)
- Other regions
Demographic segmentation (Age, Family size):
- Small families (1 or 2 children) - Big families (more than 5 people)