Realizing the immense potential that the seasonal adventure tourism offered, Bari took a loan of $20,000 from family members and in 1994 was looking for a business partner when he met Mohammed in January of 1994. Mohammed, who had come to work with an international infrastructure and agricultural development agency operating in the Northern Areas, had been born in Pakistan, but grew up in Europe and did his post-secondary education in Canada.

In 1994, advertising for travel operators was limited to informal referrals to potential customers in Japanese, European and Australian markets through satisfied clients, most of who had actually come to Pakistan and found their own way to Gilgit (570 kms away from a major international airport). Travel operators generally played a passive role in which the potential clients would come to them and negotiate the prices per trek. There was little or no formal line of communication in the pre-trip phases and as such no accurate measure of the demand that tour operators faced could be gauged. This resulted in a loss of potential clientele who would either select tour operators in other countries before they came to Pakistan (through better advertising tactics and security of pre-trip communications) or come to Pakistan's Northern Areas looking for favorable prices, and if the tour operators were over-booked with potential clients, a likely possibility, would end up forfeiting the trek. Abdul Bari wanted to capitalize on this opportunity by starting HA.

Mohammed was interested in Abdul Bari's idea and promised him that while he could not work a full-time position in the company due to his job commitments, he would invest $10,000 in HA for a 30% share and also help Bari start up his company. Thus, in January of 1995, Himalayan Adventures was formed with a start-up capital of $30,000. Their initial marketing strategy included contacting clientele who had visited the NAP, did a trek under Abdul Bari's guidance and had indicated that they knew friends or relatives who would be interested in similar treks, biking tours or safaris.

Operations of Himalayan Adventures

As the tourist season of 1995 began, HA operations comprised the following:

  • a staff of three employees, Bari and two other guides;

  • a leased Jeep for transporting guests in and out;

  • an office space in central Gilgit Bazaar, and a rented guest lodge serving as a base of operations and as a transit place for trips from and to the airport.

In 1995, HA hosted a total of 13 groups—12 in trekking and a cultural safari—and the company registered a loss due to high start-up costs. The next years saw further increases in business activity and increase in profits, however well below the normal profit levels of other domestic competitors. In the summer of 1996, after working (assisting) at HA for two years, Mohammed left for the United States to pursue an MBA at a university in the Commonwealth of Massachusetts.

In 1998, Abdul Bari expected that, for the third straight year, HA would register a profit of around $10,000—an amount five times lower than its competitors in the domestic market. Abdul Bari would have to sit down and figure out a way to set a direction for his business and turn it into a more profitable venture. One option was an alliance with other tourist operators in NAP. Another option was collaborating with the Pakistan Tourism Development Corporation. A third option was expanding HA business via the Internet. Some of Bari's international clients had mentioned that Internet was becoming a useful business tool, and how they could use the Internet to speed up their pre-adventure planning and allow them to keep in touch with their contacts during their trip. Thus, Abdul Bari was considering which of these three options would be ideal for HA, as the official tourist season came to a close in the NAP.

In late 1998, after having returned from the U.S. only three weeks earlier, Mohammed's phone rang at his desk at the Marketing Division of Citibank in Islamabad, Pakistan. After the pleasantries were exchanged, Abdul Bari informed Mohammed about his concerns for Himalayan Adventures. The conversation is as follows:

  • Abdul Bari (AB) You know because of the security concerns and better logistics, a lot of tourists who could be our customers are choosing different destinations altogether. This is quite frustrating, and I have had talks with other Tourist Operators in NAP. Business is steadily declining, but HA is in real bad financial position.

  • Mohammed (M) I see. I am aware of the general decline in the tourist industry, but HA has always under priced its tours to gain competitive advantage.


That probably is not enough any longer. Tourists are getting frustrated and tired of the hassles they have to put up with just to get into Pakistan.


I know your concern, but since I have been out for such a long time, can you perhaps explain to me what you mean. Give me an example of the hassles you have encountered.


Okay. You remember the first trek you went to; the Fairy Meadows Trek? You remember the group that went along with you?


Yeah, there a couple from New Zealand, an Australian, a German and a Spaniard.


Right. Well this year that German, Ziegfried, referred us to his brother Hans and his girlfriend Petra, who wanted to do the trek to K-2 base camp (see Appendix B for more details).


Interesting. I was thinking that perhaps we should no longer focus on lower prices. While I was in the U.S., I learned some new marketing and customer service techniques. Perhaps a better strategy might be to differentiate the tours of HA from others. One option I'm considering is using the Internet. This new technology could help us in marketing the tours worldwide, improve our service quality, and allow us to simplify the visa and permit process with the Pakistani government. What do you think, Abdul?


I think this is a good idea because I have heard about the Internet from our clients and the other travel firms in this area.


Okay then, why don't you come over to Islamabad and I will try to explain a couple of ideas that I have for HA.


Okay, I will be there next week.

At the end of the conversation, Mohammed knew that the Internet held a place in adventure tourism and may be the key to salvaging HA. But, how? What e-business implementation strategy should he use? Mohammed had read a Harvard Business Review article in which he found there were two Internet strategies available for business: a pure dot-com strategy or the brick & click strategy (see Appendix A for more details).

Annals of Cases on Information Technology
SQL Tips & Techniques (Miscellaneous)
EAN: 2147483647
Year: 2005
Pages: 367 © 2008-2017.
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