B3 interrelationships and interdependencies

Question 1

What are interrelationships?

Answer 1

Organizations that work together to benefit them both.

Question 2

What are interdependencies?

Answer 2

Organisations that rely on each other to enable them to provide a better product/service.

Question 3

What are some advantages of interrelationships and interdependences? (7)

Answer 3

• Shared cost
• Economies of scale
• Better image/reputation
• Increased sales
• More income
• Customer care
• More customers

Question 4

What are some disadvantages of interrelationships and interdependencies? (5)

Answer 4

• Loss of individual image
• Less personal customer service
• Shared commission on sales
• Effects of poor service by one
• Organisations my impact the other

Question 5

What is horizontal integration?

Answer 5

Where an organisation buys/merges with another organisation of the same type to enable it to offer a wider variety of products/services.

Question 6

What is vertical integration?

Answer 6

When an organisation buys/merges with another organisation of a different type to enable it to control more sectors of the market. The organisation owns different companies at different levels of the supply chain.

Question 7

What is the distribution channel? Give the order.

Answer 7

Clear supply chain from main business provider to customer. It goes from principle suppliers, e.g. airlines sell seats and hotels sell rooms, to tour operators that plans all components of a holiday and puts it all together, to travel agents that sell holidays from tour operator to customer.

Question 8

Why might travel and tourism operators work together?

Answer 8

• Increase sales
• Increase income/revenue
• Reduce costs
• Get more customers
• Increase awareness of their organisations
• To be better competitors