Essay Example: Amadeus Company Analysis

2021-07-27 01:03:21
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1223 words
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Middlebury College
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Essay
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Amadeus Company is a leading firm in Western Europe which operates in the tourism and travel industry and carries out the global distribution system (GDS). The continued digitalization and the need for enhanced data processing system as well as advanced management capacity are strategies that face the tourism and travel industry. These strategies are geared towards product offering and create brand awareness. Amadeus offers Global Distribution Systems within the traveling and tourism industry. GDS has resulted in the connection of numerous travelers and agencies. The company also creates value in the distribution chain through aggregating inventories arising from multiple travel suppliers. GDS offers volume-based incentives along with other economic inducements in its attempts to maintain and grow the global network. The financial performance of the organization against thats of the industry is impressive. The revenue has been increasing for the past five years. In 2012, it was 2, 910 which was 38.6% of the total industry. 3, 104 and 3,418 are the revenue values for 2013 and 2014 respectively. This attributed to 40.1% and 40.7% of the industry. 3, 913 and 4, 473 are revenues of 2014 and 2015 respectively while thats of 2016 was 4,773. In 2015 the revenue was 42.5% and in 2016 it was 44% of the total market revenue. The increase in the revenue is also attributed to the growth in revenue levels in the industry.

Amadeus is a leading company in the provision of technology solutions which automate certain mission and business processes. The IT section covers the development and provision of IT solutions to make the company efficiently carry out processes like e-commerce, reservations, inventory management, and consultation services. These IT solutions are offered to a wide range of clients. The efficiency in IT provisions enables the company to have an easy time in responding to customers. The firm customizes, manages and provides the IT system using standardized solutions and the customers benefit from the shared system upgrade.

The greatest strength of the firm lies in its ability to establish useful partnerships with the other firms and customers. It, therefore, enjoys customer loyalty due to its outstanding services in travel booking and management. It has partnered with key IT firms including British Telecom (BT), Siemens, and Cisco among many others. Technology is another strength of the firm. The advanced technological system that the company employs creates efficiency in the delivery of customer services, and this increases the level of productivity and revenue. Besides, the company has established a global presence, and it has its regional offices in 195 countries in the world. This is a core strength which is the foundation framework that makes it remain in being a leader in the travel industry.

Weaknesses of the company are seen from the errors and defects that are evident in the distribution system. The complexity of the system makes the companys distribution system to have undetected defects and errors. When these defects are discovered by the customers, it results in delays in the payments and even lost in the customers. The defense harm the reputation of the organization. The firm also faces a weakness in the increasing maintenance expenses as well as the insurance costs. These raise the costs incurred and thus reduce the revenues. Again, the systems of the company are vulnerable to damage from the natural disasters, telecommunication and network failures, viruses, and terrorism.

The Amadeus fundamental competitive strategy is the establishment of numerous oversea market which has resulted in significant revenue increases along with broadening its market share. The company continually delivers new product offerings to address the needs of the customers. It has diversified in product lines to increase its presence in the market. More importantly, the organizational commitment to achieving its global outreach is a priority. The customer service is well-established and responses promptly to their requests and complaints. Amadeus has ventured into the e-commerce business and widened its capacity to reach new markets. However, it can enhance the competitiveness through carrying out media advertisement and campaigns to create awareness. Also, it should make it a priority to establish customer experience and develop a feedback system where customers can provide their views.

The Porters Five Forces of competition also work to its advantage. The switching costs are low, and this makes Amadeus influence the supplier prices. The customers have limited choice and cannot, therefore, influence the prices. The intensity of the existing rivalry is also reduced because the industry has only a few firms. Substitutes are limited, and hence the customers do not have many varieties of product choice. New competitors are discouraged by the high barriers to entry, and this also lowers the competition level. The life cycle of the organization allows constant change in products and thus provides customers with innovation and high quality products. The firm also ventures in an international strategy to enhance global awareness and improve its profit level. The company has successfully established itself in 195 countries. The key international operation is at Erding with two major strategic operations in Sydney and Miami. Poland, India, Colombia, Thailand, and Ukraine are other international countries that the company intensively carries out its business activities. However, the firm needs to take advantage of the emerging markets in the international countries and particularly in the developing nations.

The company's internet activities are embedded in its e-commerce services it proves to its customers. Amadeus has an online master price expert which helps the customers to find the lowest airline fare. Extreme search is an internet activity that provides a unique and inspirational shopping solutions for online travelers. Again. The Amadeus Selling Platform Connect is internet activity designed for a customer having technological constraints. One can also carry out an in-depth search. Amadeus CheckMyTrip gives more internet information. Besides, the Amadeus e-Power is used on the internet to create a new revenue stream from online bookers, and it is facilitated by e-Travel Management found on the companys website.

Amadeus Company has taken advantage of its financial other in accelerating diversification and growth through acquisition in the past two years. In 2015, the firm acquired Premio CapCorp Impulsa. This strategy has significantly been rewarding, and it has made the company realize huge profits. The company also announced an intention to acquire. Also, the company acquired Navitaire in July 2015, but this is still waiting for regulatory approval. Newmarket International in December 2013 in attempt to enhance its growth in the Hotel IT business segment. UFIS and AirIT also have been acquired by the company in the Airport IT segment while Hotel SystemPro and Itesso accusation are in the Hotel IT segment. Other forms that the company has acquired include iFAO, Pyton and Hiberus Travel IO Solutions. It has mergers with IT firms such as British Telecom (BT). Through this analysis, it is evident that Amadeus should seek to form joint ventures with companies that provide marketing services.

Undoubtedly, Amadeus is committed to creating an environment that encourages innovation that would enhance growth and create value addition. The environmental strategy is anchored on efficiency in its operations, and it measures along with identifying areas that need improvement in the macro-and micro-environments. It also monitors the performance in the global sector. Identification and fostering of Amadeus solutions are also geared towards improving the innovation processes. An environmentally sustainable policy is also built on participation in joint industry initiatives. The company believes that implementing innovation is a goal that will be beneficial to customers and it, therefore, participates in tourism and travel organizations and forums.

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