Case study analysis: Peregrine Adventures – www.peregrineadventures.com
Format: Short Report
Word limit: 1,000 words (plus appendices)
Due: Week 8, Friday 5:00pm
Soft copy only to be submitted to turnitin via mywai, no hard copy required.
In short report format, discuss the fit between the strategy of Peregrine Adventures and its global industry context. Use all the frameworks explored in weeks 1 – 4 (such as PESTLEDI, Porters five forces, resource based view and generic strategies) to analyse and evaluate the current strategy and the business context (external environment and the industry competitiveness), and form an opinion regarding the outlook for the company in the next five years. As the word count for this assessment is quite tight, presume the reader already has some knowledge of the organisation.
Recommended report structure:
– Cover page – not included in word count
– Table of contents – not included in word count
– Body (with subheadings)
– Future outlook
– Reference List – not included in word count
– Appendices (with subheadings) – not included in word count Jervice, to start this assessment, you need to start with the research and complete the appendices before you start writing the final report. You will find that once you have the appendices done, the rest is easy as you can just refer to the information there and the references.
1. get a good understanding of the company: e.g., origin, target market, products on offer, destinations, suppliers, how the business is conducted…Then you can complete the followings:
– You have to scan the external environment for trends to identify opportunities and threats. Look for industry specific reports as these often report on these; this is for you PESTEL DI)
– Then you need to find out how attractive / unattractive (competitive) is the industry; is it profitable? Make sure you identify the industry first before you look for the information. How could a travel company succeed in this industry? What resources or capabilities would be needed? Again, look for industry specific literature and some theory text.
– Then you can start identifying the resources and capabilities; use the website and other e-magazine articles that talk about the company; plus the strategic text book to frame the key aspects. Then you can think whether the company has competitive advantage or not, and if so, what is it?
– In regards to the fit, you then look at your macro and industry findings and compare these with the company’s strengths and weaknesses. Are there any gaps? How could the gap be minimised? The company should use its strengths to minimise its weaknesses; to take exploit the opportunities and turn threats into opportunities.
Hope that helps, let me know if you have any other questions at any stage,
Table of Contents
Porter’s Five Forces Analysis. 6
Appendices: Strategic Elements of Peregrine Adventures. 10
Appendix 1: PESTEL DI Analysis. 10
Appendix 2: Industry Analysis – Porter’s Five Forces. 12
Appendix 3: Company Strategy. 13
Peregrine adventures is an Australian-based tours and travel company, which travels to destinations all over the world. The word “Peregrinate” means to migrate. The company began as a trekking company on the foothills of Nepal in 1977. The company has grown tremendously since its establishment and now offers voyages to more than 80 countries in all seven continents. The company does not target a specific demographic or segment of the population, but rather, anyone with an enquiring mind and an adventurous spirit. In this regard, Peregrine prides itself as a company for travelers built by travelers. The company strives to provide intimate, authentic, and memorable experiences for their customers (Peregrine Adventures, 2017).
Currently, there is global political uncertainty related to geopolitical events such as Brexit in the UK and the election of Donald Trump as US president (Deloitte, 2017). Terrorism events also exacerbate geopolitical tensions. Political tensions inhibit global travel while making it difficult for a company to organize trips to certain destinations. Currently, however, the geopolitical issues have not escalated to such a level.
Financial factors are the main constraining factors on individuals’ participation in tourism for all age groups (Eurostat, 2016). Consequently, the state of the global economy has an important impact on torusim outcomes (Boley, 2014). Event such as the global economic recession of 2007 tend to have a long lasting impact on the ability of individuals to participate in tourism (Eurostat, 2016). The current economic outlook is positive, which includes a strengthening labor market, increased employment opportunities, leading to higher income levels and higher disposable income (Deloitte, 2017). These factors facilitate increased participation in tourism, an assertion corroborated by tourisms growth into one of the fastest developing economic sectors globally (World Tourism Organization, 2017). For Peregrine, this means more people will be demanding its services thus increasing its revenues.
Important socio-cultural factors include the compaction of the world into a global village, increasing contact and close association between individuals. As a cultural dispersion medium, the internet increases cultural exposure. Thus, cultural curiosity about other cultures is at an all-time high (Stephens, 2017). There is also a growing global middle class, especially in emerging economies (Airbus, 2016) and Asia (Deloitte, 2017). More individuals now have a greater spending capacity (Munar, Gyimóthy, & Cai, 2014). These two factors present opportunities, which Peregrine can exploit through its strengths.
Technological factors exacerbate the accelerated growth of the tourism industry through infrastructural development and advanced modes of travel increasing the ease of mobility. Additionally, the internet is an important and pervasive method of communication and source of information (Hennig-Thurau, et al., 2010); with clients regularly checking online reviews before making purchase decisions (Kelleher & Helkkula; Smith & Anderson, 2016). The internet is an important market place, serving as a springboard for identification of destinations, branding and indeed, transacting (Stephens, 2017). Peregrine can use the internet to increase its visibility and promote its products. Travelers today tend to carry their gadgets (Sherri, 2015), while millennials also prefer to have Wi-Fi (Barton, Haywood, Jhunjhunwala & Bhatia, 2013). Consequently, Peregrine can offer this feature as part of its package.
There is a growing recognition of the sensitivity of the earth’s environment and its vital role in sustaining life. This recognition has led to the growing business movement of sustainability (Freedman, 2010) centered on environmental conservation and preservation of resources for future generations. Peregrine recognized the importance of environmental conservation, and therefore setup the intrepid foundation (Peregrine Adventures, 2017), a move that can increase consumer engagement with the company (Parguel, Benoît-Moreau, & Larceneux, 2011). The company should therefore seek to continue engaging in its environmental conservation practices.
One of the most significant legal aspects that is likely to affect tourism in Australia is labor regulations. Increases in employee wages will increase the cost of doing business and reduce profitability, unless these costs are passed on to consumers. Alternatively, passing these costs on to consumers may also reduce consumer engagement thus reducing profitability.
One of the most significant demographic trends is the generational shift from the baby boomer generation to millennials. Millennials prefer to travel less, travel alone, and seek cultural experiences (Barton et al., 2013). Additionally, they are highly technologically perceptive. Millennials also tend to seek out the best deals available and packages that they consider ideal (Barton et al., 2013). These features are complementary to Peregrine’s product offering, and the company should harness these as opportunities through its strengths.
Due to cross-national integration of both business and the social aspects, travel has become imperative. Greater travel and greater mobility of individuals has led to such travel modes as ‘bleisure’ travel (Clarke, 2016), particularly with millennials. Peregrine can harness this feature to identify potential clientele by evaluating the business opportunities in their tour destinations and reaching out to millennials who are likely to travel there for business.
The tourism industry in Australia is characterized by low barriers to entry making it less attractive for existing players, especially considering the high substitutability of products, high bargaining power of consumers (Boley, 2014), and low bargaining power of suppliers. Consequently, this industry is characterized by intense competitive rivalry, especially because companies cannot rely on product differentiation or price to gain a competitive edge. The implication for Peregrine Adventures is that it must seek innovative ways of acquiring and sustaining competitive advantage, such as understanding the needs of its consumers and focusing on particular niches of the market where it can deliver greater level of value.
An evaluation of Peregrine’s business practices indicates that the company is currently pursuing a focused differentiation strategy. The company targets a particular demographic category of individuals based on age (Boley, 2014), and offers them a differentiated travel experience that is based on small tours and travels. Its key resources such as its brand name, industry experience and localized travel guides, and capabilities of delivering localized and intimate travel experiences enables such differentiated travel experiences. The company enjoys a competitive advantage from its brand name, intimate travel experience and client retention rates.
The strategic evaluation of Peregrine reveals that there is a good fit between the companies resources and capabilities and the industry characteristics. Going forward, the company needs to be particularly attentive to the shifting demographics as these shifts affect the potential market and the characteristics of travelers. Currently, Peregrine’s business is hinged on return clients (Boley, 2014). The company should focus on establishing a close relationship with its clients and understand what they enjoy the most. Overall, the outlook for Peregrine is a positive one, given the positive global political and economic outlook, as well as the travel preferences of future travelers (millennials), who prefer the small tours travel mode, travelling alone and cultural experience outcomes.
is a premium travel company based in Australia with over 80 destinations
globally. The company has been able to carve a niche for itself in the industry
by offering personalized premium travel experiences. The tourism industry has a
positive outlook, with positive political and economic outlooks. Companies in
this industry need to pay attention to the social, technological, and
demographic changes that are significantly altering the target market and its
characteristics. Millennials are emerging as the most significant target
market, preferring smaller travel packages with high-level access to
technology. The tourism and travel industry is highly competitive, but is
nonetheless attractive owing to the expanding market. To be successful,
companies need to focus on differentiation and targeting particular niches of
Airbus. (2016). Mapping Demand 2016 / 2035. Blagnac Cedex: Airbus
Barton, C., Haywood, J., Jhunjhunwala, P., & Bhatia, V. (2013). Traveling with Millennials. Boston: Boston Consulting Group
Boley, J. (2014, May). Peregrine Adventures. Retrieved from Business In Focus: http://www.businessinfocus.com.au/index.php/2014/05/peregrine-adventures-2/
Clark, S. (2016, June). 4 Ways Millennials Are Changing The Face Of Travel Retrieved from The Huffington Post: http://www.huffingtonpost.com/sarah-clark/4-ways-millennials-are-ch_b_10503146.html
Deloitte. (2017). 2017 travel and hospitality industry outlook. Deloitte.
Deloitte. (2017). Tourism and hotel market outlook – Executive summary. Deloitte.
Eurostat. (2016, July 20). Tourism statistics – participation in tourism. Retrieved from Eurostat Statistics Explained: http://ec.europa.eu/eurostat/statistics-explained/index.php/Tourism_trips_of_Europeans
Freedman, M. (2010). Sustainability, environmental performance, and disclosures. Bingley: Emerald.
Hennig-Thurau, T., Malthouse, E. C., Friege, C., Gensler, S., Lobschat, L., Rangaswamy, A., & Skiera, B. (2010). The impact of new media on customer relationships. Journal of Service Research, 13(3), 311-330.
Kelleher, C., & Helkkula, A. (Jul 2010). Virtually Speaking-Customer to Customer Communication in Blogs. Journal of Applied Management and Entrepreneurship, 15 (3), 4-17.
Munar, A., Gyimóthy, S., & Cai, L. (2014). Tourism social media (1st ed., p. 12). Bingley, U.K.: Emerald.
Peregrine Adventures. (2017). Small Group Travel & Tours | Peregrine Adventures US. Peregrineadventures.com. Retrieved 20 April 2017, from http://www.peregrineadventures.com/
Sherri S (2015) Growing Trends in the Tourism and Hospitality Industry. J Tourism Hospit 4:162. doi:10.4172/2167-0269.1000162
Smith, A., & Anderson, M. (2016). Online Shopping and E-Commerce. Pew Research Center.
Stephens, M. (2017). The future of tourism – 10 Megatrends – eHotelier. eHotelier. Retrieved 20 April 2017, from http://ehotelier.com/featured/2015/12/15/10-megatrends-in-tourism/
World Tourism Organization. (2017). Why tourism? | World Tourism Organization UNWTO. Www2.unwto.org. Retrieved 20 April 2017, from http://www2.unwto.org/content/why-tourism
Appendices: Strategic Elements of Peregrine Adventures
Appendix 1: PESTEL DI Analysis
|PESTEL DI Force||What is it?||Threat (evidence, plus reference)||Opportunity (evidence, plus reference)||The likely impact of T/O on the company|
|Political||Extent of government involvement in the economy through factors such as its policy and political stability and various forms of laws and regulation.||Global political uncertainty related to factors such as Brexit and the presidency of Donald Trump.||Reduce the number of travelers thereby effectively reducing the amount of revenue earned from its activities.|
|Economic||Factors influencing how a company does business and the profitability of its approaches. Factors include interest rates, disposable income, and inflation.||Strengthening labour market and increased jobs as well as higher disposable income||Increase income by increasing the number of consumers requesting for services.|
|Social-cultural||Characteristics of the population such as demographic features and shared beliefs and attitudes. Factors include age distribution, career attitudes and so on.||The growing middle class particular in emerging markets||A greater proportion of the population with increased disposable income enabling their engagement with the company|
|Technology||Advances in technology affecting marketing approaches and production techniques||Social media networks which make it easier to reach out to and contact consumers||Improve the efficiency of marketing and ease with which the company is able to promote its product offerings to its intended target market.|
|Environmental||Factors related to the physical environment and which relate to scarcity of resources and pollution||Increased push towards sustainable business practices that conserve the future and have a minimum impact on the environment||Compel the business to be more sustainable. Increase consumer engagement particularly those who have a greater interest in sustainability.|
|Legal||Regulatory considerations in areas such as health, consumer rights, advertising standards and product quality requirements||Government regulations of minimum wage requiring an increase on the same.||Reduce the profitability of the venture by increasing the cost of doing business.|
|Demographic||Closely related to socio-cultural factors and relates to the population distribution and attributes of the population||Generational shift to millennials who tend to travel less (Jhunjhunwala, and Bhatia, 2013) but prefer to travel alone and seek cultural experiences||Increased demand for Peregrine’s services given that its product offering is complementary to the characteristics of millennials.|
|International||Factors pertaining to the internationalization of global business and how these issues affect a company’s business capability.||Greater travel and greater mobility of individuals leading to such travel modes as ‘bleisure’ travel (Clarke, 2016)||Necessitate the development of new packages to cater for the unique needs of ‘bleisure’ travellers.|
Appendix 2: Industry Analysis – Porter’s Five Forces
|Porter’s Forces||How attractive is the industry?||What are the likely strategic implications for the company?|
|Barriers to entry||The industry does not feature significant barriers to entry and hence is not very attractive to company’s such as Peregrine currently operating in the market||The company must seek other advantages that will sustain demand for its products in preference to other competitors.|
|Buyer’s bargaining power||Consumers have a high bargaining power since there are many different tourism packages available in the market||The company needs to ensure that it understands the product needs of its consumers making it a key source of value to consumers.|
|Supplier’s bargaining power||Suppliers do not have a significant bargaining power since the company’s operations involve general supplies||Peregrine can use this factor to gain a competitive advantage by obtaining input requirements at a lower cost|
|Competitive Rivalry||There is high competitive rivalry in this industry whereby competitors can easily enter the market and offer products that deliver the same basic products||Peregrine should find a way to increase its competitiveness either through cost leadership or product differentiation.|
|Threat of substitute products||There is a high threat of substitute products since the product delivered is mainly an experience, which users can get from any competing firm.||The company should endeavor to differentiate its product/service offering to make them more preferable to consumers.|
|Which generic strategy is the company pursuing?||Resources||Capabilities||Competitive advantage?||What are the likely strategic implications for the company?|
|Based on a review of its business practice and target markets, Peregrine appears to be pursuing focused differentiation. Its tours target a particular demographic of individuals (Boley, 2014), and it does not rely on cost for a competitive advantage. Rather, the company relies on its tour offerings.||Well-renowned brand name that has enabled the company to retain its clients. A wealth of experience in the travel industry. An exceptional team of local travel guides in its destinations. Intrepid foundation through which the company is able to deliver on sustainability.||Can travel to a wide range of destinations and hence is able to satisfy the travel needs of various customers. Can provide a more localized experience through its local travel guides and handpicked accommodation. Can deliver more intimate travel experiences through its small tours approach.||The following are some of the sources of the company’s competitive advantage: Trusted brand with a good reputation hence preferred by customers. Has a high rate of client retention (Boley, 2014). Offers better and more intimate travel experiences Can deliver on sustainability which is a key concern for travelers as well as tour companies||The company can stick to its current strategy of focused differentiation. This strategy allows the company to deliver top of the quality travels, which are a key source of competitive advantage for the company. Moreover, the company is also able to retain its clients, whereby client retention is one of the most important imperatives in service-based industries. For these reasons, the company should continue to pursue this generic strategy.|