ACCA Applied Knowledge · Business and Technology · Technological factors
A travel agency's customers now compare prices online and book directly with airlines and hotels. Which impact of technology is this MOST likely to have on the agency's services?
Online price comparison and direct booking give customers greater bargaining power and weaken the agency's role as intermediary. The agency must differentiate, for example through advice or tailored packages. Information is more available, entry barriers generally fall, and paper-based booking becomes less relevant.
- AReduced customer access to information, protecting margins
- BGreater customer bargaining power and pressure on the agency to differentiate its servicesCorrect
- CHigher barriers to entry for new travel providers
- DGreater reliance on paper-based booking systems
Explanation
Easy access to price information and direct booking increases buyer power and weakens the agency's intermediary role, so it must add value through advice or bespoke packages. Information access rises, entry barriers tend to fall, and paper systems become less relevant.
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