According to Deans & Karwan (1994, p. 26), a global information system is an information system that is specially designed to collect and process information that is related to a specific field. The system also integrates, evaluates and communicates the processed knowledge.
In addition, Oxford University Press further defines, “global marketing is marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives.” As to the objective of this paper, it will show the importance and advantages of a GIS strategy that will propel a local industry player hoping to achieve results, attain and sustain the local tourism company in a profitable operation while catering to the local market demand.
Understanding of GIS
A GIS supports any application that requires the processed knowledge. The modern technology advancement has led to the development of data management systems that are in a position to support enormous information reliably. GIS has led to standardization of data communication.
GIS has a profound impact on travel agencies and organizations. A GIS is relevant for communication of knowledge and relevant tourist destinations throughout the world. The main components of a global information system that lead to fast data communication to the organization are software tools that can capture and store data in bulk such as a guided data storage software (Deans & Karwan, 1994, p. 38).
A GIS encompasses many levels of analysis including international policy analysis, international enterprise of an organization, groups or team and the overlay of technology. Global information systems development was motivated by increased international business and trade activities especially since the 1980s.
The GIS was also developed following a revolution of information technology in the U.S. according to Oz (2008, p. 180), the culture of development implementation and utilization of information technologies. A GIS is able to relay different kinds of information to different people throughout the world.
Due to advanced technology, information is an important ingredient to firms and most organizations utilize information as a competitive advantage. The internet enabled sharing of information and reduction of business costs. A travel agency that needs to increase its profitability should make information a competitive advantage and use a Global information system to communicate on the relevant tourism sites (Oz, 2008, p. 335).
The modern world requires that organizations use modern technology with information as a competitive advantage. The exchange of information through the internet reduces the operating cost of the firm. The firm can communicate and exchange information through the internet. In addition, the internet can be used for e-commerce and e-business.
The tourism organization can utilize these technological options to increase its operations online and boost its market share after determination of international tourist destinations. In addition, the use of a GIS by the company can lead to increased market share.
Key Categories of a GIS
There are several categories of a global information system. The different categories of a GIS system are the country, choices, concentration, culture, consumption, capacity, currency and channels. Others are Commitment, communication, contracts and caveat.
Country
A country is an important category in global information systems because it forms the environment for the operation of an organization. Information on the country in which the organization operates is relevant to the organization because it provides the relevant information regarding the existing business opportunities in the country and the possibility of their exploitation.
For instance, GIS information availability in the local country is able to target and identify a best tourism destination such as China, thru its GIS ability to take into account the economy outlook, business trend and general market trend of the current preferred destination of a local/ global consumer.
If the GIS points towards China, it should provide information on tourist sites in China such as the physical features (e.g. the Great Wall of China) and other developed tourism destination attractions in the targeted tourism destination country. These features are important opportunities that can be exploited by the travel company. A country category of the GIS is usually structured around SLEPT factors.
The information contained in the database is obtained through visits and reports, press cutting, other international organizations operating in OECD countries and other intelligent market sources such as trade associations’ reports.
The database on the country is therefore vital for effective performance of the travel agency in the country. For example, based on the economy and business outlook, be it for leisure or business, due to economic/business interest or with the sudden development of targeted tourism destination which in this case based on current GIS info which can be China.
Local travel agency will be able to identify current consumer trend from both the business and leisure sectors, which currently China is ranked as one of the top choices for either business or leisure tourism destination. These factual evidence which can easily retrieved thru GIS and local survey, helps local travel company cuts down on unnecessary operational R&D costs by focusing a niche market with well planned out operational support and attractive tourism itinerary for either market sectors.
Choices
All travel agencies would like to find out other travel destinations in the world and explore the best destination for its market penetration and cater to its targeted consumer demands. The consumers in the different markets have different tastes and preferences and therefore consume different products.
A global information system has a database on the different tastes and preferences and consumption trends in different countries in the world. For example, a business consumer sector would view a targeted country destination based on the targeted country destination of choice based on general economy outlook and investment opportunities in preferred country.
Whereas for the leisure consumer market, it is largely based on the general market trend as to where is the preferred destination based on various factors such as current most fashionable city, current top tourism spots, current most value for money destination etc. In addition, a GIS category of choices provides the variety of products and services that the travel agency can provide to its clients.
For instance, some consumers are interested in religious or historical sites, wildlife, natural scenery and unique physical features such as the Great Wall of China, which is one of the top ten wonders of the world. Using primary research, choices of products and services preferred by consumers are revealed. Other substitutes are also of importance to the sale of the company products and services in different markets (IRMA & Khosrowpour, 2001, p. 161).
Concentration
Market concentration is the extent to which firms take up the market share. A market with many firms as opposed to a group of small firms with small market shares indicate a high concentration while a market that has few firms with less market share indicates lack of concentration (saturation) respectively.
Information on market concentration is important for any organization because it helps the organization determines the strategies to increase the market share and or venture into other potential markets (IRMA & Khosrowpour, 2001).
A GIS is an important system because it can provide important information regarding the different market concentrations of different travel markets in the world. The information revealed in the GIS on market concentration in the operating country and can help the travel agency segment the market and locate its offices.
Market concentration on other international market will help the company make decisions on whether to venture into the market or not. Where the company decides to venture into the market, it will have enough knowledge on market segmentation and location of its subsidiaries (IRMA & Khosrowpour, 2001, p. 870).
The travel agency can access information on contained in the GIS system in the local on Chinese tourism industry concentration. The Chinese tourism industry is still growing there is some degree of concentration. The gaps in the tourism industry in China concentrations are receding as concentration in the industry increases rapidly.
Areas of high levels of concentration include areas such as Tianjin, Pearl River and Yangtze River deltas. Other information on concentration provided by the GIS includes the market players such as Beijing Capital Tourism co. Ltd, China CYTS Tours Holding co. Ltd, Huangshan Tourism Development Co. Ltd among others (Eng, 2008). Using this information as provided by the GIS, the firm would be able to segment the market and strategize on competing effectively with its competitors.
Culture
Culture is an important aspect of the society and the market. Culture comprises of beliefs systems of people, language, religion and their value system. Cultural elements the behavior of people hence differences in consumption habits and trends. Language as an element of culture determines the interaction between the company, suppliers and its clients in different markets.
Information on different languages, religions in China provided by a GIS system such as Yaho, Hui, Manchu, Miao and Dong among others is important to the organization because it will help the company to hire the right people to coordinate company activities in the Chinese Tourism industry (Kuper, 2000, p. 57).
It is important that during the development of a GIS, a database on the culture of the Chinese people be established. Using the information in the system, the travel company should review the impact of different cultures found in China on the performance of the firm.
The performance of the different products and services of the company in different the Chinese market should be reviewed with respect to the culture in the market. This is because culture influences consumption tastes and preferences of consumers. China has a rich culture comprising of Chinese medicine, festivals, kungfu among many others. These Chinese cultural aspects affect tourism consumption in China.
The travel agency should utilize this information on cultural diversity of China from a GIS to strategize on venturing in the country. Culture does not only apply to a given market. It can also be applied to the organization. For effective performance of the travel agency, the travel agency should develop a good organizational culture that involves high communication and teamwork (Kuper, 2000, p. 69)
Consumption
Consumption is the act of purchasing a given good or service and using it as per your needs. Through consumption, a company can obtain revenue while the consumer can obtain satisfaction through utility. All consumers are rational consumers and they make rational consumption decisions.
Consumption decisions are influenced by many factors including the levels of income, price, price of substitutes and compliments and specific needs of the consumers (Deans & Karwan, 1994, p. 287). A GIS provide all details on consumption. A GIS system will track the changes in the consumption in different countries. The trends in tourism consumption in China as revealed by the system China are of importance to the travel agency could enable the company manage its inventory and distribution channels effectively.
The statistics on consumption for different consumers of the travel services and products located in china is relevant to the travel company in deciding the products and prices to offer when venturing into China. For instance, increasing tourism trends in China as indicated by a GIS will help the company in forecasting future sales in the market (Research and markets, 2004).
Capacity
The information on the clients of the travel agency is vital for decisions on the transactions between the company and the clients. The information also influences the value and type of services to be offered. A GIS provides the detailed address and location of customers. As the company prepares to venture into China as a tourist destination, a GIS will provide details of the location and addresses of clients in addition to their credit rating.
This is important to the travel agency especially in determining the credit worthiness of clients and the types of contracts and terms and conditions of the contracts to be entered into. In addition, the system provides the credit rating of the customer hence the ability to rate the credit worthiness of the client. The credit worthiness of the customer is important in determining the terms and conditions to be contracted by the company with the client (Oz, 2008, p. 144).
Currency
Currency is useful as a medium of exchange for the travel company. Different countries have different currencies that have different values. A global travel agency that is interested in knowing different tourism destinations in the world is also interested in the currencies of the destinations.
The different exchange rates are of importance to the travel agency because it determines the prices to be offered in different for the different company products and services. A GIS will provide the exchange rates of the Yuan and the USD to the company so that the firm can constantly review its invoices for tourists touring China as a destination for tourism (Oz, 2008, p. 82).
Channels
Channels are well included in a supply chain. An integrated supply chain that utilizes the latest technology should incorporate the company, its suppliers and consumers. Media channels and distribution channels need constant review to ensure that the most appropriate channels are used.
In addition, the firm should utilize the most cost effective channel. Information concerning the available communication, advertising and transaction channels is provided by a global information system. The system contains the channels for different markets and countries. The travel agency can regularly review its channels to fit into the Chinese market that it intends to venture after obtaining information on the Chinese market from the GIS.
Commitment
For realization of the management goals and profit maximization, a GIS must indicate the commitment of the organization meeting the consumer needs. The system should cover all markets in China and provide statistics of the market regardless of whether the company operates in the market actively or whether China is a possible venture in future.
By committing itself to venture into China, the firm should be committed through ways such as contracts with Chine firms and other tourist supporting organization such as the those in hospitality industry.
Communication
According to Deans & Karwan (1994, p. 358), information is an important factor in the modern business environment. A global information system should ensure effective communication with every person consulting it for any kind of information.
The system should collect and contain information and statistics regarding the development and the impact of communication systems globally. However, the company should take necessary care to secure its company details to avoid stealing its vital strategy information by its competitors.
As the company prepares to venture into China as a travel destination, it should utilize information on the GIS concerning China’s tourist destinations to communicate to its clients using the internet. This is necessary for more clients and profit. However, the information communicated should be safeguarded from competitors.
Contracts
Technology has led to increased international business. However, different countries and organizations involved in international business are subjected to different legal and political environments that influence their transactions. A GIS should provide different legal requirements for transacting business in different countries to the travel agency.
These legal requirements are vital for transactions and contract by the travel company in the respective countries. The availability of legal requirements concerning transactions by the company in different countries will necessitate e-commerce and e-business for the company in the markets.
For instance, e-commerce contracts in China are governed by e-commerce legal regulations such as rules and regulations on information service of internet, regulation on telecom management and telecom services standards that can be provided by a GIS. Through such online transactions, the company can reduce transaction costs and increase its profits (Xia, n.d, p. 4).
Caveat
According to IRMA & Khosrowpour (2001, p. 1016), not all markets are safe to operate in. some countries are not safe and conducting business in such countries could result to a loss to the company. A caveat that is provided by a GIS system provides information on all market in all countries.
Through such information, the travel company can realize safe and dangerous markets to trade in. the system will therefore provide danger signals regarding and giving the company either a go-ahead or a restrain from such markets. Warning signals are important in enabling the company avoiding dangerous contracts and loses. For instance, a GIS could provide a caveat on China’s inflation despite being a good tourist destination.
Conclusion
The information systems that are used by organizations in the modern world have changed leading to organization to use modern information systems to create competitive advantage. The information systems used by many organization use different approaches and methodologies.
A GIS is important for the travel agency because it will provide the necessary information regarding the destinations in other countries in the world. The system will enhance communication and the way the company does business online. Statistics on the viability of markets in other countries is also of great importance because the company can use the trends in business in other markets to venture into the countries. The warning signals from the system will help the company avoid dangerous markets, countries and contracts.
References
Deans, C. & Karwan, K. (1994) Global Information Systems and Technology: Focus on the Organization and its Functional Areas. Hershey, PA: IDEA Group. Inc. (IGI).
Eng, (2008) The development of China’s Tourism Industry Cluster Analysis, Web.
IRMA, & Khosrowpour, M. (2001) Managing Information Technology in a Global Economy. Hershey, PA: IDEA Group. Inc. (IGI).
Kuper, A. (2000) Culture: the Anthropologists’ account. Massachusetts, MA: Harvard University Press.
Oz, E. (2008) Management Information Systems. 6th Edition. Florence, KY: Cengage Learning.
Research and markets, (2004) China Tourism industry, Retrieved from: <https://www.researchandmarkets.com/>