Harvard Case - Rosenbluth International and Biztravel.com
"Rosenbluth International and Biztravel.com" Harvard business case study is written by Roger Hallowell. It deals with the challenges in the field of Service Management. The case study is 24 page(s) long and it was first published on : Mar 29, 2000
At Fern Fort University, we recommend Rosenbluth International embrace the digital transformation by strategically integrating Biztravel.com into its existing operations. This integration should focus on leveraging Biztravel.com's online platform to enhance customer service, expand market reach, and streamline operations while preserving Rosenbluth's core values of personalized service and expertise.
2. Background
Rosenbluth International, a leading travel management company, faced a significant challenge in adapting to the rapidly evolving travel industry. The emergence of online travel agencies (OTAs) like Biztravel.com, offering lower prices and convenient online booking, posed a serious threat to Rosenbluth's traditional business model. This case study explores Rosenbluth's strategic response to this challenge and the potential benefits and risks associated with integrating Biztravel.com into its operations.
The main protagonists of the case study are:
- Rosenbluth International: A traditional travel management company with a strong reputation for personalized service and expertise.
- Biztravel.com: An online travel agency offering lower prices and convenient online booking.
- Stephen Rosenbluth: CEO of Rosenbluth International, facing the challenge of adapting to the digital revolution.
3. Analysis of the Case Study
This case study can be analyzed through various lenses, including:
a) Strategic Analysis:
- Porter's Five Forces: The travel industry is characterized by intense competition from both traditional players and online agencies, increasing bargaining power of buyers (travelers) due to readily available information and price comparison tools, and low barriers to entry for new players.
- Competitive Advantage: Rosenbluth's competitive advantage lies in its personalized service, expertise, and strong relationships with corporate clients. However, this advantage is threatened by the rise of online agencies offering lower prices and convenience.
- Strategic Options: Rosenbluth has three primary strategic options:
- Ignore the threat: This option is not viable as it would lead to a decline in market share and profitability.
- Compete directly: This option would require significant investments in technology and marketing to compete with online agencies on price and convenience.
- Embrace the digital transformation: This option involves leveraging technology to enhance existing services and expand market reach.
b) Operational Analysis:
- Service Management: Rosenbluth's traditional service management model relies on a high level of human interaction and expertise. This model is inefficient and costly in the digital age.
- IT Management: Rosenbluth needs to invest in robust IT infrastructure and systems to support online booking, customer relationship management (CRM), and data analytics.
- Process Analysis: Rosenbluth needs to streamline its processes to improve efficiency and reduce costs. This includes automating tasks, simplifying workflows, and integrating systems.
c) Marketing Analysis:
- Marketing Strategy: Rosenbluth needs to shift its marketing focus from traditional channels to digital platforms like search engine optimization (SEO), social media marketing, and content marketing.
- Branding: Rosenbluth needs to reposition its brand to emphasize its unique value proposition, such as personalized service, expertise, and corporate travel management solutions.
- Customer Relationship Management: Rosenbluth needs to implement a CRM system to manage customer interactions, track preferences, and provide personalized service.
4. Recommendations
To effectively address the challenges and capitalize on the opportunities presented, Rosenbluth International should:
1. Integrate Biztravel.com: Acquire or strategically partner with Biztravel.com to leverage its online platform and technology. This allows Rosenbluth to offer competitive pricing and convenient online booking while retaining its expertise and personalized service.
2. Enhance Customer Service: Integrate Biztravel.com's online platform with Rosenbluth's existing customer service infrastructure. This allows customers to access online booking tools while still having access to Rosenbluth's expert travel consultants for personalized advice and support.
3. Expand Market Reach: Leverage Biztravel.com's online presence to reach a wider audience and attract new customers. This includes utilizing SEO, social media marketing, and content marketing to drive traffic to the platform.
4. Streamline Operations: Integrate Biztravel.com's technology into Rosenbluth's operations to automate tasks, simplify workflows, and improve efficiency. This includes streamlining booking processes, managing inventory, and providing real-time data analytics.
5. Foster a Digital Culture: Encourage employees to embrace technology and develop digital skills. This includes providing training programs, creating a culture of innovation, and empowering employees to utilize technology to improve service delivery.
6. Reposition Branding: Emphasize Rosenbluth's unique value proposition, such as personalized service, expertise, and corporate travel management solutions. This can be achieved through targeted marketing campaigns, content marketing, and leveraging customer testimonials.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies: Rosenbluth's core competencies lie in personalized service and expertise. The integration of Biztravel.com allows Rosenbluth to leverage its core competencies while expanding its reach and efficiency.
- External Customers: The integration of Biztravel.com caters to the evolving needs of customers who seek both convenience and personalized service.
- Internal Clients: The integration of Biztravel.com allows Rosenbluth to improve employee productivity and efficiency by automating tasks and streamlining workflows.
- Competitors: By integrating Biztravel.com, Rosenbluth can compete effectively with online agencies on price and convenience while maintaining its competitive advantage in personalized service and expertise.
- Attractiveness: The integration of Biztravel.com offers significant potential for growth and profitability. This includes increased market share, reduced operational costs, and enhanced customer satisfaction.
6. Conclusion
By strategically integrating Biztravel.com into its operations, Rosenbluth International can effectively adapt to the digital revolution in the travel industry. This integration allows Rosenbluth to leverage technology to enhance customer service, expand market reach, and streamline operations while preserving its core values of personalized service and expertise. This strategic move positions Rosenbluth for continued success in the evolving travel landscape.
7. Discussion
Alternative options not selected include:
- Merging with another travel management company: This option could provide access to a wider range of resources and expertise, but it also carries the risk of cultural clashes and operational challenges.
- Developing its own online platform: This option would require significant investment in technology and development, and it might not be as effective as leveraging an existing platform like Biztravel.com.
Key assumptions of the recommendations include:
- Biztravel.com's technology is compatible with Rosenbluth's existing systems.
- Rosenbluth's employees are adaptable and willing to embrace technology.
- The market for personalized travel services remains strong.
8. Next Steps
The following steps should be taken to implement the recommendations:
- Phase 1: Conduct a thorough due diligence on Biztravel.com and finalize the integration strategy.
- Phase 2: Integrate Biztravel.com's technology into Rosenbluth's existing systems and processes.
- Phase 3: Train employees on the new systems and processes and launch the integrated platform.
- Phase 4: Monitor the performance of the integrated platform and make adjustments as needed.
By taking these steps, Rosenbluth International can successfully navigate the digital transformation and secure its position as a leading travel management company in the evolving travel industry.
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Case Description
Rosenbluth, the third largest U.S. travel agency, uses the Internet to serve new customers with a high-service strategy. Rosenbluth acquires Biztravel.com and integrates the customer support and logistics aspects of service delivery.
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