Chain of Distribution
Interrelationships
The chain of distribution – also known as the channel of distribution, is the way in which the product is delivered to the consumer, it is used in any industry. An example of this would be;
Vertical distribution
Many companies do not go by the simple chain of distribution as theirs is more complex. Many business tend to merge with other businesses for commercial success. When this takes place it’s known as vertical distribution. This is when a two companies from different levels of the travel and tourism sector merge, for example a tour operator such as BAA buys an airline such as Flybe. This means that they own different components from the industry and are able to control the complete operation. An advantage of this would be that the company can spread its costs over goods or services and they can offer better prices to customers. A disadvantage of this is that small businesses lose out of customers therefore money, an example of vertical integration is;
Horizontal distribution
This is another type of integration that does not follow the channel of distribution rigidly. These companies also merge with other companies to gain market dominance. If a tour operator buys over another tour operator this is known as horizontal distribution as they buy a company from the same level of the chain. Many of the popular tour operators in the United Kingdom are integrated either vertically or horizontally and this also takes place worldwide. An example of this is;
Interrelationships
Travel and tourism industries rely on each other as they cannot run in isolation. Each organisations is dependent on another for effective operation. An example of this would be the Belfast International Airport that depends largely on the various different interrelationships is holds. In total the airport has interrelationships with 250 companies as this is essential for running of the airport. One main interrelationship the airport upholds is the one with ICTS which
The chain of distribution – also known as the channel of distribution, is the way in which the product is delivered to the consumer, it is used in any industry. An example of this would be;
Vertical distribution
Many companies do not go by the simple chain of distribution as theirs is more complex. Many business tend to merge with other businesses for commercial success. When this takes place it’s known as vertical distribution. This is when a two companies from different levels of the travel and tourism sector merge, for example a tour operator such as BAA buys an airline such as Flybe. This means that they own different components from the industry and are able to control the complete operation. An advantage of this would be that the company can spread its costs over goods or services and they can offer better prices to customers. A disadvantage of this is that small businesses lose out of customers therefore money, an example of vertical integration is;
Horizontal distribution
This is another type of integration that does not follow the channel of distribution rigidly. These companies also merge with other companies to gain market dominance. If a tour operator buys over another tour operator this is known as horizontal distribution as they buy a company from the same level of the chain. Many of the popular tour operators in the United Kingdom are integrated either vertically or horizontally and this also takes place worldwide. An example of this is;
Interrelationships
Travel and tourism industries rely on each other as they cannot run in isolation. Each organisations is dependent on another for effective operation. An example of this would be the Belfast International Airport that depends largely on the various different interrelationships is holds. In total the airport has interrelationships with 250 companies as this is essential for running of the airport. One main interrelationship the airport upholds is the one with ICTS which