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akash singhal
- Master | Next Rank: 500 Posts
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This passage was excerpted from material
published in 1993.
Like many other industries, the travel industry is under
increasing pressure to expand globally in order to keep
pace with its corporate customers, who have
globalized their operations in response to market
pressure, competitor actions, and changing supplier
relations. But it is difficult for service organizations to
globalize. Global expansion through acquisition is
usually expensive, and expansion through internal
growth is time-consuming and sometimes impossible
in markets that are not actively growing. Some service
industry companies, in fact, regard these traditional
routes to global expansion as inappropriate for service
industries because of their special need to preserve
local responsiveness through local presence and
expertise. One travel agency has eschewed the
traditional route altogether. A survivor of the changes
that swept the travel industry as a result of the
deregulation of the airlines in 1978-changes that
included dramatic growth in the corporate demand for
travel services, as well as extensive restructuring and
consolidation within the travel industry-this agency
adopted a unique structure for globalization. Rather
than expand by attempting to develop its own offices
abroad, which would require the development of local
travel management expertise sufficient to capture
foreign markets, the company solved its globalization
dilemma effectively by forging alliances with the best
foreign partners it could find. The resulting cooperative
alliance of independent agencies now comprises 32
partners spanning 37 countries.
The passage suggests that one of the effects of the
deregulation of the airlines was
A. a decline in the services available to noncommercial
travelers
B. a decrease in the size of the corporate travel market
C. a sharp increase in the number of cooperative
alliances among travel agencies
D. increased competition in a number of different
service industries
E. the merging of some companies within the travel
industry
OE E
Why not C
Please Explain.
published in 1993.
Like many other industries, the travel industry is under
increasing pressure to expand globally in order to keep
pace with its corporate customers, who have
globalized their operations in response to market
pressure, competitor actions, and changing supplier
relations. But it is difficult for service organizations to
globalize. Global expansion through acquisition is
usually expensive, and expansion through internal
growth is time-consuming and sometimes impossible
in markets that are not actively growing. Some service
industry companies, in fact, regard these traditional
routes to global expansion as inappropriate for service
industries because of their special need to preserve
local responsiveness through local presence and
expertise. One travel agency has eschewed the
traditional route altogether. A survivor of the changes
that swept the travel industry as a result of the
deregulation of the airlines in 1978-changes that
included dramatic growth in the corporate demand for
travel services, as well as extensive restructuring and
consolidation within the travel industry-this agency
adopted a unique structure for globalization. Rather
than expand by attempting to develop its own offices
abroad, which would require the development of local
travel management expertise sufficient to capture
foreign markets, the company solved its globalization
dilemma effectively by forging alliances with the best
foreign partners it could find. The resulting cooperative
alliance of independent agencies now comprises 32
partners spanning 37 countries.
The passage suggests that one of the effects of the
deregulation of the airlines was
A. a decline in the services available to noncommercial
travelers
B. a decrease in the size of the corporate travel market
C. a sharp increase in the number of cooperative
alliances among travel agencies
D. increased competition in a number of different
service industries
E. the merging of some companies within the travel
industry
OE E
Why not C
Please Explain.
