Question

Unlike its competitors in the online air travel industry, Travelocity provides its customers with a greater variety of services such as cruise reservations, package tours, hotel bookings, and car rentals. This is an example of a(n) ________ strategy.

Answer 1

Answer: Cost leadership strategy

Explanation: Under the cost leadership strategy the organisation tries to dominate the market by offering the lower price. The lowering of price could be done by producing at a high level and benefiting from economies of scale.

In the given case, Travelocity is decreasing its costs by diversifying its business and operating at a high level. The higher the customer turnover they get the lower they can charge prices for earning the target profit.

Hence, from the above we can conclude that this is an example of cost leadership strategy.