ior to the development of the internet the leading authority of airline timetables was Official Airline Guide (OAG) who published the definitive guide to all commercial air travel on a global scale. The OAG publication of timetables ran to three volumes and was updated every month. For many years prior to the commercialisation of the internet OAG was the industry authority on all aspects of airline timetabling and a source of valuable information for travel agents, business travellers, airline executives and even plane spotters. However, by the mid 1990s the company’s market dominance came under threat from new entrants into the market who were adopting new technology in the form of the internet to collect, store and disseminate up-to-the-minute information on airline timetabling. OAG was being disintermediated from the supply chain of information. In particular, airlines had developed their own computerised inventory system that allowed agents to see flights and book them directly. The emergence of budget airlines, such as Ryanair (www.ryanair.com) and easyJet (www.easyjet.com), enabled customers to cut out the middleman
Prior to the development of the internet the leading authority of airline timetables was Official Airline Guide (OAG) who published the definitive guide to all commercial air travel on a global scale. The OAG publication of timetables ran to three volumes and was updated every month. For many years prior to the commercialisation of the internet OAG was the industry authority on all aspects of airline timetabling and a source of valuable information for travel agents, business travellers, airline executives and even plane spotters. However, by the mid 1990s the company’s market dominance came under threat from new entrants into the market who were adopting new technology in the form of the internet to collect, store and disseminate up-to-the-minute information on airline timetabling. OAG was being disintermediated from the supply chain of information. In particular, airlines had developed their own computerised inventory system that allowed agents to see flights and book them directly. The emergence of budget airlines, such as Ryanair (www.ryanair.com) and easyJet (www.easyjet.com), enabled customers to cut out the middleman and book flights directly using the internet. The decline in sales for OAG meant that the publishers, Reed Elsevier, decided to sell the business to a venture capitalist company for $1. To survive, OAG had to pursue reintermediation into the supply chain of information. By 2002 the company had invested some £15 million in new technology that was to be the basis of the business transformation. The key added value OAG could offer to business clients and customers was their expertise in the compilation of timetables. With 30 million flights annually, managing the data is a complex and precise process. The company electronically alters around 13 000 units of data in timetables every day. The technology allows OAG to manage and distribute the data more effectively. The company has developed integrated systems so that customers can access information via numerous devices including interactive television and mobile phones. Information is also available in many different languages and packaged to appeal to different types of customers.
Discussions
Give an example of a local firm that has gone through this transition. State clearly inherent challenges faced by the firm as a result and suggest ways of solving or mitigating the effects.
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