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Essay: Critical evaluation of the use of e commerce to achieve competitive advantage in the tourism industry

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  • Published: 12 September 2015*
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The tourism industry is very important for the whole world .It acts a major role in the economy of Sri Lanka .Today the tourism industry in the world has improved a lot because of the new technology .Some of those new trends are e commerce , e business , mobile marketing , m commerce, and etc. Among these new trends e commerce is doing a great job to the improvement of the tourism industry in Sri Lanka .
Ecommerce or the electronic commerce has defined by many people in the world .”Ecommerce is buying ,selling ,transferring ,serving or exchanging products or services or information via computer networks including the internet “[Turban & Volonino,2010].Also e commerce is “Any exchange of information or business transaction that is facilitated by the use of information and communication technology ” according to Curtis & Cobham,2005 .Ecommerce is heavily used to achieve competitive advantage in the tourism industry .Competitive advantage can be achieved if an organization do really well in their businesses comparing with the other competitors .
According to the United Nations Conference On Trade And Development “the main actors in the tourism industry include governments, tour operators, distributors , and wholesalers ,hotels ,air lines ,and other transport operators and most important of all the tourists themselves .Each of those actors has a stake in the development of the electronic market .Each expects to be affected in different ways by electronic commerce .Their concerns and interests need to be addressed comprehensively so that action that is realistic and relevant to all can be recommended “[untad.org/en/docs/ecdr01p2.enpdf]. As tourism is a very dynamic industry it is very important to have e markets to gain the competitive advantage .
E markets really helps to overcome geographical barriers .
Today internet has the ability to have a good communication between the customer and the supplier because of its efficiency .It provides new market channel therefore suppliers or the main actors of the tourism industry has the ability to have a good advantage from those circumstances .Today most amount of the tourism transactions depends heavily on business to consumer (B2C).There are some more degrees of digitalization as they are depend according to the participation .They are Business to Business(B2B),Consumer to Consumer(C2C),Government to Citizen(G2C), Intra Organizational (Business to Employee B2E).Now the internet can create a direct bridge between supplier and the consumer by B2C e commerce activities. According to the Encyclopedia of Developing Regional Communities With Information and Communication Technology2006, “The internet has the ability to provide a highly suitable and major new market channel for tourist products because it can display information and pictures . The travel and tourism sector to a large degree depends heavily on business to consumer (B2C) E commerce activity” .It is really true statement that today in Sri Lanka we can see that many transactions related to tourism depend heavily on B2C e commerce activities such as online booking systems .B2B e commerce activity is also enhance the business activities such as a company joining or combining with another company for booking facility .The United Nations Conference on Trade and Development has released a report on e commerce and development in 2001.That report clearly says that “From the B2C angle a tourist may now book online any combinations of producers and inter or infomediaries .The B2B dimension of tourism increases significantly when individual producers and inter or info mediaries start linking their propietary booking systems with one another .When networked they can provide a much greater variety of tourism products” (unctad.org/en/docs/ecdrolp2.en.pdf).Today we can see that B2B e commerce activities are really helpful for the actors of tourism in Sri Lanka to achieve their competitive advantage as it builds the strength ,differentiation among the other competitors in the world .
Tourism and e commerce have become inextricably linked today .Also the tourism industry is a dynamic one . Michael Bloch ,Yves Pigneur and Thomas Steiner says in their research report that” the tourism industry has already reported dramatic changes in its structure over the last few years .The customers wish for more frequent but shorter travel ,last minute reservations ,global advice ,service quality ,market transparency and a certain self service mentality-eg-modern travelers begin to gather recreational micro services on their own and form their customized holiday package “.Therefore e commerce is really important to understand this dynamic nature of the tourism industry and also to achieve the competitive advantage .Also the tourism industry is really depends on the current information .Therefore consumers just trust “the information received through direct or intermediary market channels”[berine,1999#62].It proves that e commerce is important to achieve the competitive advantage .
The competition among the suppliers of the tourism industry has increased a lot . To achieve the competitive advantage and stay suppliers should understand the behavior of the customer and change according to the new circumstances .Ecommerce will provide information about many of those circumstances .E markets ,Online booking systems ,web sites of travel agents will really help the suppliers to get to know about the current situation
.According to the Michael Bloch and his friends research “in order to stay competitive to keep regular customers coming and to gain new ones participants in the tourist market must learn to deal with these new circumstances ,go new ways and develop innovative ideas” .
United Nations report shows that only establishing online booking system is not enough ,to gain competitive advantage.”Having established online booking as a normal operation ,the challenge facing the travel industry is bringing the online the travel consultant” “.The system producing the necessary consumer profiling and most importantly the relationship of confidence between consumers and the online automated virtual travel consultant must be of superior efficiency ,if unavoidably less human than the relationship that a consumer would hope to develop with his travel agent” .Therefore to gain the competitive advantage suppliers should certainly use e commerce to be in efficient manner .
There are many travel web sites in Sri Lanka .They include their products prices quality and many other facts .They shows how they differ from the other competitors .They update their web sites .Therefore customers get to know about the products and the suppliers can achieve the competitive advantage .Customers always like if the suppliers can understand about them .Now suppliers can get to know about their customers thoughts through the online facility and they can give their best to the customer and it will build the customer satisfaction .Also they can get to know about many new service opportunities . Therefore e commerce really helps to achieve the competitive advantage .
New business of the e commerce ,suppliers of the tourism industry can reduce their costs .They don’t have much advertising or any further costs such as communication costs because they have their own web sites and networks .It will really help them to gain competitive advantage as they can give their products to the customer at a fair price.
Also because of the e commerce suppliers can give their products in a very quick and efficient manner as there are no or a very few intermediaries between suppliers and consumers .It is really important to achieve the competitive advantage .
Ecommerce has provide clients with online payment possibilities as well .It is really easy to do the transactions because of the e commerce .
Therefore e commerce certainly gives the chance for the actors of the tourism to achieve the competitive advantage and to be in a good status in the industry for a long time .

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