importance of links and relationships within theretail travel environment 
M1: Explain the importance of links and relationships within the retail travel environment.
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Horizontal Integration
• Why does it exist and why is it formed?
-Company’s merging together. 1 company taking over another. Financial reasons etc. Happens when a company owns or controls other businesses at the same level of the distribution chain
• How does Horizontal integration affect the organisations concerned? -Can be a risk. 1 company may lose identity. Job losses can occur. Staff may not like the change leading to demotivated employees. If one company fails it can affect both.
• How does Horizontal integration benefit the organisations concerned? -Can increase profitability. Staff can be trained to do more than one job. Bigger customer base. Less competition. More competitive in the market.
• How does Horizontal integration benefit the customer?
-Customers have the security of knowing they have two organisations reputation and experience on side. More choice for customers. Better deals as they are more competitive and so can offer best discounts.
Vertical Integration
• Why does vertical integration exist and why is it formed?
-Happens in the retail travel sector when a company controls more than one level of the distribution chain for products and services, in order to gain a competitive advantage
• Why does vertical integration affect the organisations concerned?
-If one component fails this can affect all components on the chain of distribution, which could ultimately effect the whole organisation. The organisation is limited to what they can sell and promote due to commission restraints and having to sell their own brand.
• Why does vertical integration benefit the organisations concerned? -Can improve profitability. Profits and commission can stay within the organisation. Staff can be trained to do more than one job.
• How does the vertical integration benefit the customer?
-Customer may get the best deals/discounts as vertically integrated
organisations
.
Horizontal Integration
• Why does it exist and why is it formed?
-Company’s merging together. 1 company taking over another. Financial reasons etc. Happens when a company owns or controls other businesses at the same level of the distribution chain
• How does Horizontal integration affect the organisations concerned? -Can be a risk. 1 company may lose identity. Job losses can occur. Staff may not like the change leading to demotivated employees. If one company fails it can affect both.
• How does Horizontal integration benefit the organisations concerned? -Can increase profitability. Staff can be trained to do more than one job. Bigger customer base. Less competition. More competitive in the market.
• How does Horizontal integration benefit the customer?
-Customers have the security of knowing they have two organisations reputation and experience on side. More choice for customers. Better deals as they are more competitive and so can offer best discounts.
Vertical Integration
• Why does vertical integration exist and why is it formed?
-Happens in the retail travel sector when a company controls more than one level of the distribution chain for products and services, in order to gain a competitive advantage
• Why does vertical integration affect the organisations concerned?
-If one component fails this can affect all components on the chain of distribution, which could ultimately effect the whole organisation. The organisation is limited to what they can sell and promote due to commission restraints and having to sell their own brand.
• Why does vertical integration benefit the organisations concerned? -Can improve profitability. Profits and commission can stay within the organisation. Staff can be trained to do more than one job.
• How does the vertical integration benefit the customer?
-Customer may get the best deals/discounts as vertically integrated
organisations