Answers to the case questions
The travel service industry is a booming industry that generate over $ 55 billion yearly in the united states alone. The major services offered by companies in such industry are the booking of the hotels and the flights according to the needs of the clients at the lowest costs possible.
Rosenbluth International is a privately held, family-owned company, is the second largest travel-services firm in the world. It has more than $4 billion in annual sales and more than 4900 employees. Rosenbluth International is headquartered in Philadelphia, Pennsylvania, the company was founded in 1892, and it was a relatively small company when Hal Rosenbluth joined the firm in 1974. In 1984, he obtained a contract to provide all of DuPont Corporation's travel services, and the company's explosive growth began.
Hal Rosenbluth came up with a new way of looking at the business the core of his vision was to put the employees first and create a very pleasant working environment which had a great impact on the business.
Rosenbluth international as mentioned before is a travel service company that is in business to first and foremost lower the cost of the travel and entertainment expenses for client companies or individuals. Rosenbluth makes most of its profits from the commission paid by airplane carriers for every ticket sold.
With a stead fast strategy that focuses on the employees and goes as far as calling them associates and an environment which is highly professional and adequate for progress the company has been able to land some of the best deals with very important companies such as the Dupont corporation to which Rosenbluth has been able to save over $150 million in travel and entertainment expense. This truly amazing deal gave Rosenbluth all the momentum and energy it needed to conquer the American market and to go as far as becoming the second travel service firm in the world.
Nonetheless with a quickly shifting and changing business environment the company’s current strategy would do little to no good especially since the airlines have capped the commissions paid to travel agent . These commissions have been the main source of income. To get big deals and huge corporation to trust or give its business to a travel service company, it had to pay large amounts of money for such contracts and with the capping of the commission such option is no longer possible. Travel agents can no longer afford to pay major corporate clients for the right to handle their travel business. global competition as well has forced many corporations to cut back on all expenses, including travel. Finally, the World Wide Web now makes it easy for individuals, whether as private persons or employees, to investigate and book their own travel. Such situation and problems could easily make Rosenbluth business and core service obsolete. Hal and the Rosenbluth corporation as a whole needed to come up with some kind of answer and solution the new environment and the threats it represents.
The company turned to information systems to try and cope with the changes in the environment and make the most of it. Salvation of what is left was out of the question Rosenbluth was focused on staying at the top.
for the company to be able to achieve its goals of success it needed to first make sure that clients whether individuals or corporation understand the value added by Rosenbluth and how it is ablr to keep their travel and entertainment costs manageable.
The way Rosenbluth is able to do that is by relying heavily on cutting-edge information technology. First it has lowered airline costs by developing a way to search for the lowest fares that will meet the requirements of the traveler. DACODA is Rosenbluth's yield-management system. Even though Yield system has a...