Business Environment, Operations Strategy, and Performance in Travel Agencies: Evidence from Taiwan

Abstract

The purpose of this study is to investigate the relationships between the business environment and the operational strategies of travel agencies. We examine and analyze the strategies adopted by travel agencies with different performance levels when facing the changes in business environment. The results indicate that the travel agencies concerned with business cost and political factors tend to adopt the cost leading strategy, those concerned with labor availability and dynamism in the market tend to adopt the differentiation strategy or focus strategy, those concerned with competitive hostility and travel risk tend to adopt the focus strategy, and those concerned with market environment and travel risk tend to adopt the flexibility strategy. Furthermore, high performers place more importance toward the environmental dimensions of cost leading and labor availability. Data also present that the high and low performers use different strategies. The research validates the theoretical framework for the relationship between business environment and operations strategy choices. Some useful suggestions are offered as references for travel agents.