Interrelationships
An interrelationship is when a business works with other companies for example The British Museum in London has links with lots of components such as shops, cafe's and transport in which they have an interrelationships with without these the company wouldn't be successful as they wouldn't be able to attract people coming from long distances which would cause people not to visit the museum.
P3 Interrelationships and chain of distribution AJW
P3 Interrelationships and chain of distribution AJW
Chain of distribution
The chain of distribution means getting a product to a consumers for example hotels put packages together and give them to tour operators then tour operators give them to travel agencys to sell to the consumers so basically they are all working together to ensure consumers get the best deals and packages.
Above is the chain of distribution. The producers which are the hotels, transport providers, attractions and ancillaries work with the wholesalers which are tour operators which then put packages together, the tour operators work with travel agencies which are the retailers and they then go on to sell packages and holidays to the consumers.
Economies of scale- this is when companies are able to spread its costs over mass-produced goods or services by using the chain of distribution this makes the economies of scale work. By businesses buying in bulk this will save them alot of money as they wouold usually use a certain business and buying in bulk they would be able to get discount. Which also means smaller tour operators are being forced out of business as they don't have the money or the customers to buy in bulk.
Economies of scale- this is when companies are able to spread its costs over mass-produced goods or services by using the chain of distribution this makes the economies of scale work. By businesses buying in bulk this will save them alot of money as they wouold usually use a certain business and buying in bulk they would be able to get discount. Which also means smaller tour operators are being forced out of business as they don't have the money or the customers to buy in bulk.