Saga Holidays was a family-run business which started from year 1948. This business had steadily grown until nowadays. As a result, it has recognised reputation as a travel organiser that concentrated serving the older target market only.
However, the chairman of the Saga Holidays had decided to retire in October 2004. Thus, he had sold the organisation to the Charterhouse with an incredible amount of £1.35bn (BBC News, Oct 2004).
Although no one can prove that it is worth such a high price, this article endeavour to analyse its strategic market environment.
External Environment Analysis
PEST stands for Political, Economic, Social and Technological environment. It is vitally important that using PEST analysis to review Saga Holidays macro environment.
Table 1 demonstrate the summary of PEST analysis for Saga Holidays.
According to Telegraph News (2006), the UK government was considered broaden the age discrimination legislation. In this case, Saga Holidays that restricted holiday’s service to the people over 50’s may have caused the organisation problems.
Furthermore, the reduction of the private pension and increment of taxes will lead to the less discretionary spending power to the community. Hence, the revenue for Saga Holidays may decrease.
There is some restriction of travel destiny caused by government control over the visa, such as Afghanistan. This is because of the terrorist’s activities in particular countries. Again, people are afraid of the terrorists, i.e. the horror terrorism activities on 11/9/2000 devastate of World Trade Centre at New York. This had stop people willingness to travel.
One of the main concerns for the economic is the pension crisis. Nowadays, the people are paying more and more pension compared to old days. As the result, the financial burden of the community will guide to less travel.
The price comparison has showed that Saga Holidays provide expensive holidays than their competitors. Consequently, it is evident that their customers are wealthy and well-educated.
The exchange rate for pound sterling is strong. Thus, it is a good timing to travel caused of the higher purchasing power compare to other countries.
Saga Holidays had has offered the holiday insurance with guarantee insured to all the customers. For high quality service, it had gained the trust from their customers.
There are high percentages of demographic changes in ageing population, divorce and so on compare to old days. Firstly, according to the National Statistic, there are 20 million people aged over fifty. The population ageing will continue because of the baby boomers in 1960 have reached their retirement age. Hence, this is obviously that a growing market.
Nowadays, elderly people are more active and well-educated. They are able to dance, listen and enjoy different life style. Besides, urbanised person are more likely to visit new countries. In consequences, adventurous holidays become immensely popular. Due to this culture aspect changes, Saga Holidays had offered some wildlife trips such as Malaysian Wildlife Adventure which was safety as well. Technology
One of the important inventions was internet in last decade. However, with the easy access and gather holiday’s information, it has affected the competitive advantage within the industries. Moreover, the customers had changed behaviour in holiday bookings, which more and more people were booking online directly. Even so, this does not affect Saga Holidays because of they are the specialist in their niche segments. The increase direct communications with the customers have acquired more customer satisfactions.
The improvements on the medical care and online medicine assistance were vitally important to Saga Holidays. This is because they are offering the special medical treatment to the customers...