Showing posts from June, 2015

All Roads Lead to Vertical Integration

As companies mature and look for new ways to increase revenue, they inevitably look toward vertical integration . Companies with great customer relationships move up and/or down the purchase path to increase revenue. Let's look at three examples of vertical integration in the travel sector: one historic, one current, and one I predict will happen soon. Historic: Why Airlines Sell Vacation Packages The majority of people planning to take a trip that includes a flight will start planning their trip by researching flights first. Before most people look into booking accommodations, a rental car, and/or activities, they look into flights. Many years ago, airlines figured this out and started selling vacation packages. Since customers started planning their trip on an airline's website, the airlines realized they could sell other services while they had customers' attention. (They also make a lot of money by selling hotel rooms.) That's vertical integration. Curr