A Business Plan for Oriental Travel Agency


This paper is the business plan for Oriental Travel Agency (OTA). OTA is an entrepreneurial start-up providing all sort of travelling services for people in UK to China. In this paper, the business plan will focus on the marketing aspects of OTA, considering that the report is supposed to be short and yet comprehensive. Before, the details of the marketing related issues in the business plan will be discussed; the paper will introduce the company as well as the business environment in which the company is operating in. After that, the paper will focus on discussing the market segmentation of the business, and the positioning as well as value offering of the business to the prospective customers. Then, the marketing mixes of the business will also be discussed. This paper will be concluded on summarizing the important issues in terms of marketing management of OTA as the entrepreneurial start up in London.

The External Environment

Before any viable business plan can be formulated, it is important for the entrepreneur to understand the condition or situation of the external environment. Only by understanding the competitive forces in the external environment, the entrepreneur can design the business value offering in consistent with the opportunities available to fulfill the demands of the marketplace (Adams, 2005). In order to analyze the business environment, two popular frameworks can be used. Firstly, PEST model is useful to understand the various dimensions of the business environment, while Porter Five Forces is important to understand the competitive forces exist in the industry landscape (Burk, 2007).

PEST Model

Under the PEST model, four critical dimensions to be analyzed include the political environment, economic, social cultural as well as technological environment (Doole et. al., 2007). The analyses for OTA are as follow:

Political. Both the political environment in China and UK are stable. Generally speaking, the two nations have good relationships. Thus, the political risks facing OTA is not something to be worried about.

Economic. The economy of China is expanding fast. There are talks that China currency RMB may appreciate in the future (Dicken, 2007). This may hurt the tourists demand to travel to China. From another perspective, the economy situation in UK remains sluggish, whereby unemployment rate remain high (Schmidt-Hebbel et. al., 2010). Overall, the rich become richer while the poor still struggling to meet their daily necessity. Anyway, the population of UK still considered as rich compared to other countries. Thus, considering all these issues, there are huge potential to offer services to the rich people staying in London, UK.

Social cultural. Social cultural conditions in UK are very different to that of the China (Luo et. al., 2009). This can be a good sign as people may be attracted to the different social and cultural lifestyle in the different country. In fact, there culture of China is highly colorful and even high differentiated from places to places. People around the world are getting more interests on the nation, and it can be seen that people tend to travel to China for social or business purposes. Thus, it can be expected that there is a huge market for serving people from UK to travel to China.

Technological. In the era of globalization, one of the most fast changing technological advances is the rise of internet or information technology. Today, people can reach each other easily. This can offer a lot of opportunities to businesses.

Porter Five Forces

Under the model, competitive forces can be investigated from five dimensions as follow:

Rivalry among existing competitors. The competition of tourism operators can be intense, as the barriers to entry are not high. Besides, people understand that there is a trend of people getting more used to the idea of travelling around the world.

Bargaining power of buyers. The buyers have high bargaining power, as they have essentially no switching costs to try out the services offered by other tour operators.

Bargaining power of suppliers. The suppliers of OTA can be airline services, catering services, as well as hotels in China. Fortunately, these suppliers have low bargaining power, as these industries are also highly competitive. The suppliers may even beg OTA for business from UK. Overall, it is expected that OTA can have better position to bargain for low pricing from the suppliers.

Threats of substitute. There are a lot of substitute products for OTA. Some of the substitutes include services to bring travelers to other countries such as Japan, Korea, Hong Kong, or other places in South East Asia. Other not so close substitutes include travelling agencies to other region of the world, such as Africa, Australia and many others.

Threats of new entrants. The threats of new entrants are high, as people can easily set up a new travelling agencies easily, due to the relatively low cost requirement to do so.

Market Segmentation

Generally speaking, the market can be segmented into four segments as follow:



From one dimension, the customers may demand highly customized services, which include backpacking and the ability to determine the travelling schedule. In many instances, as the customers travel in family, the services required is pretty customized as well, as they required services to fulfill the demands of the old folks as well as their children. In contrast, certain more flexible people may be able to adapt to standard services. They are mostly adult traveler. From another perspective, it can be found that the customers may have different purchasing power. Rich customers required highly luxury travelling packages while normal people may try to reduce the costs of travelling if possible. OTA will be targeting Segment I.

Positioning of OTA

As argued above, OTA aim to target Segment I. Thus, OTA shall position itself as high class and highly specialized traveling agencies. Thus, the destination of tourism is limited to areas in China only, as China alone is very huge and there are very limited resources possess by OTA.

Value Offering of OTA

Thus, the value offering of OTA is to deliver high class and luxury travelling packages to tourists that demand customized or specialized services packages to China.

Marketing Mixes of OTA


The products of OTA is very customized and luxury travelling packages. Customers can plan their schedule accordingly, and select the types of services they required.


Consistent with the premium class of luxury services as well as the highly customized services to be offered to a very niche and rich market segment, the pricing will be set to follow a premium pricing. It is expected that the rich and more demanding customers will be willing to pay more for the special and customized services. With such a higher pricing, the profit margin for OTA can be enhanced.


In this dimension of marketing mixes, places can refer to the locations selected for the tourists to visit in China or the distribution channels in which OTA can reach the prospects travelers or tourists. Of more important are the distribution channels on how the customers can reach the prospects. For this, internet marketing can be employed, consistent with the trend of the rise of information technology and internet usages by people around the world (Morrison, 2009). In fact, people are also getting more used to purchase services or products from the internet (Siddiqui et. al., 2003). Thus, it is crucial that besides having a shop offices catering for customers to meet the sales representatives of the firm, it is also very crucial for the firm to enhance its competencies of internet marketing to reach the end users.


From time to time, promotion is a must. For this, the various promotional or advertising activities can be referred to the guerilla marketing techniques or strategies.


Overall, the various important aspects of the business plan, with the discussion concentrated on marketing issues for OTA is presented. However, that is not the fixed plan, as constant monitoring of the business environment is required. From time to time, continuous improvement is required to further refine the marketing techniques or strategies for OTA.

References & Bibliography

Adams, J. (2005). Analyze Your Company Using SWOTs, Supply House Times, Vol. 48 Issue 7, pp. 26-28.

Burk, W. M. (2007).Essential Guide to Marketing Planning, London, Prentice Hall

De Witt, B., and Meyer, R. (1998). Strategy: Process, Content, Context, 2nd Ed., Oxford: International Thompson Business Press.

Dicken, P. (2007). Global shift: Mapping the changing contours of the world economy (5th ed.). London: SAGE Publications.

Doole, I., & Lowe, R. (2004).International Marketing Strategy 4th ed. Thomson Learning publisher, London.

Doyle, P., & Stern, P. (2006). Marketing Management and Strategy, 4th edition, London, Prentice Hall

Hall, D, Jones, R, Raffo, C. 2001. Business Studies (2nd edition). Ormskirk United Kingdom. Causeway Press Ltd.

Horngen, H. and Izan, B. F. (1997). Accounting, 2/e, Prentice Hall.

Luo, Y. (2009). Analysis of Culture and Buyer Behavior in Chinese Market. Asian Culture and History, 1(1), 25-30.

Morrison, J. (2006). The international business environment: Global and local marketplaces in a changing world (2nd ed.). Basingstoke: Palgrave Macmillan.

Schmidt-Hebbel, K. (2010). A gloomy outlook. Organisation for Economic Cooperation and Development. The OECD Observer, (270/271), 56-57.

Siddiqui, N., O’Malley, A., McColl, J. A., & Birtwistle, G. (2003). Retailer and consumer perceptions of online fashion retailers: Web site design issues. Journal of Fashion Marketing and Management, 7(4), 345-355.

Silbiger, S. (2005). The 10-day MBA: a step-by-step guide to mastering the skills taught in top business schools. Piatkus.


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