Chain of Distribution.
The Chain of Distribution is a chart which explains where agents involved with the Travel and Tourism Industry are linked together through the Chain of Distribution. The Chain of Distribution helps me understand how horizontal and vertical integration works so if a tour operator mergers with another tour operator this is horizontal integration because they are on the same level as the Chain of Distribution but if the tour operator merged with a travel agent or a transport provider this would be vertically integrated.
Horizontal Integration
Occurs when companies are bought out or merged at the same level in the chain of distribution, such as travel agencies buying each other. Often original brand names are retained so the general public are unaware of the takeover. If a tour operator buys another tour operator at the same level in the chain of distribution, this is know as horizontal integration. Most of the major tour operators in the UK are vertically and horizontally integrated.
vertical integration
is where the supply chain of a company is owned by that company. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need. It is contrasted with horizontal integration. Vertical integration occurs when two companies at different levels in the chain of distribution merge or are bought. For example a tour operator may buy a travel agency. Tour operators have bought or created airlines, hotels and travel agencies. This means they own all the different components in the chain of distribution and are able to control the whole operation. For example First Choice and Tui are both tour operators and they merged together, now Thomson own both them two and Tui is frequently advertised on Thomson broaches but it is in a smiley face style; Co-op Travel and Thomas Cook have recently merged to save costs and make more profit.
Interdependencies
Each organisation is dependent on others for its effective operation. For example, a visitor attraction depends on the transport industry to bring its customers to the attraction. It also needs the service of the local and regional tourist boards to promote it.
The Chain of Distribution is a chart which explains where agents involved with the Travel and Tourism Industry are linked together through the Chain of Distribution. The Chain of Distribution helps me understand how horizontal and vertical integration works so if a tour operator mergers with another tour operator this is horizontal integration because they are on the same level as the Chain of Distribution but if the tour operator merged with a travel agent or a transport provider this would be vertically integrated.
Horizontal Integration
Occurs when companies are bought out or merged at the same level in the chain of distribution, such as travel agencies buying each other. Often original brand names are retained so the general public are unaware of the takeover. If a tour operator buys another tour operator at the same level in the chain of distribution, this is know as horizontal integration. Most of the major tour operators in the UK are vertically and horizontally integrated.
vertical integration
is where the supply chain of a company is owned by that company. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need. It is contrasted with horizontal integration. Vertical integration occurs when two companies at different levels in the chain of distribution merge or are bought. For example a tour operator may buy a travel agency. Tour operators have bought or created airlines, hotels and travel agencies. This means they own all the different components in the chain of distribution and are able to control the whole operation. For example First Choice and Tui are both tour operators and they merged together, now Thomson own both them two and Tui is frequently advertised on Thomson broaches but it is in a smiley face style; Co-op Travel and Thomas Cook have recently merged to save costs and make more profit.
Interdependencies
Each organisation is dependent on others for its effective operation. For example, a visitor attraction depends on the transport industry to bring its customers to the attraction. It also needs the service of the local and regional tourist boards to promote it.