Thirty years later LPP has become a global loved brand. (Lonely Planet, 2010) It has offices in Melbourne, London, and Oakland. They now have 500 staff members and 300 authors. They are so successful that BBC Worldwide acquired a 75% share in LPP and even though BBC becomes the primary commercial arm of the said publication, the broadcasting giant has promised to allow LPP to continue with their commitment to independent travel, trustworthy advice, and editorial independence (Lonely Planet, 2010)
Today, LPP continues to produce high-quality travel guides using their trusted formula of not simply to inform but to create some sort of survival kit for those who are adventurous enough to travel to foreign lands even when they are on a limited budget. However, they have added many things to their arsenal. They now produce travel-guides that contain maps for areas where no maps ever existed. This is made possible by the use of their own cartographers who use state-of-the-art technology as they survey places off the beaten path.
SWOT Analisys
Strengths
- LPP is not burden with conventional rules on how to run a business
- Can cater to specialist niche markets
- In the early 1990s LPP is one of the few travel-guide publisher operating internationally
- Is not beholden to any special interest group
- has freedom to experiment when it comes to new way of delivering content and how to execute their plans because no one can tell them how to run their operation
- their ability to stay true to their roots and ideals assure them of a loyal fan base
- the way they were able to uphold their ideals is inspiring writers to continue delivering the same high-quality products that has endeared them to the reading public, especially the traveller on a shoestring budget
Weaknesses
- unable to establish a strong presence in the United States
- LPP does not have the resources available to international publishing companies
- LPP publication does not offer a wide selection; it is focused only to a specific market which is the tourist on a budget
- LPP does not have the size to lower down their costs in the same way as a huge publishing outfit
- At the time that the case study was published LPP does not have access to big time investors with deep pockets
- LPP does not have access to unlimited funds that can help them expand and market their products aggressively
Opportunities
- there are many emerging economies in Asia
- there is significant growth especially in the Asia-Pacific region
- this means that more and more tourists are going to visit Asia in the next few years and therefore the need for crisp, reliable, and highly-accurate travel guides that LPP can easily provide
- convergence of communication and computer technologies is transforming the way we consume “content”
- greater competition among airlines resulted in drastically reduced prices and therefore encouraging international travel
- removal of political restrictions contributes to increase in international travel
- demographic shifts in developing countries enables more people to travel abroad
- There are new growth areas especially in the e-books market
- New communication technologies and computer software will enable LPP to increase their market share
- Mr. Wheeler said it best, there are new countries born every day
- There are countries that have tourist spots and requires exposure; this is where LPP comes in
Threats
- powerful international publishing houses are taking over
- dominant international publishing houses have the capability to expand their operations quickly
Critical Success Factors
Critical success factors for LPP are: a) positive cash flow; b) sustainability; c) customer satisfaction; d) quality of product; e) product development; f) strategic relationships; and g) employee retention. With regards to the first CSF, this was already pointed out by the newly-hired CEO as per case study. Without a positive cash flow, LPP will not be able to accomplish its goals. It was repeatedly mentioned that the Wheelers are engaged in business not primarily to make money but simply because travel is their passion and they want to provide a service to like-minded tourists who are budget conscious. However, they were also the first to acknowledge that without profit there will be resources that can be used to sustain the company.
Sustainability is of course the second critical factor that must be considered in light of the rapidly changing business environment. In the past the technology needed to produce a high-quality product was minimal but today the popularity of e-books and the availability of portable devices make long-term goals for the purpose of achieving sustainability a top priority. Sustainability can be achieved if LPP will be able to pinpoint how they can satisfy the needs of the customers. One way is to find out how to improve their product. According to their official website they have added a new service to their travel-guides and they are providing maps for popular destinations where none is available (Lonely Planet, 2010)
Another critical success factor that the CEO pinpointed is LPP’s unique way of developing their product, which is of course the travel-guides. These books are not written by ordinary writers but those with a passion for travel and the desire to help tourists who are travelling with cost-efficiency in mind. This culture must be maintained within LPP to assure that they will continue to produce the kind of travel-guides that made them a global icon.
In order to achieve all of the above LPP, the Wheelers are very protective of their freedom to express what they believe is right about publishing, especially when it comes to this segment of the market that they are trying to penetrate. Nevertheless, they also realized that an organization has to be prepared for change. This is the reason why LPP considers strategic partnerships with other organisations a must. Currently they are in partnership with BBC Worldwide.
And last but not the least one of the most important critical success factors is LPP’s ability to retain their employees, especially their writers. Their writers are not ordinary writers but trained as experts when it comes to determining the best way to travel on a budget. Without a doubt they have invested in them and therefore it makes no sense to lose them to their competitors.
Type of Competitive Advantages
Value-added Advantage
LPP publications experienced great success from the very beginning and continues to do so because of the value that their customers can get from buying their travel-guides. One example is the capability and desire of LPP writers – this can be traced back to their founders – to go to inaccessible places. Secondly, LPP prides itself as a travel-guide publisher that is a stickler to details and will never compromise when it comes to giving the correct information each and every time.
Focus Advantage
LPP succeeded because it has a clear understanding of its target market. This realisation was made inadvertently when founders Tony and Maureen Wheeler decided to travel across Asia when they were on their honeymoon and short on cash. This newfound knowledge they shared to the world and they stumbled upon a profitable niche market.
The company and its leadership has made sacrifices and turned down offers that could have made them instant millionaires. They did it so that they can continue to focus on a kind of writing and publication that will cater to travellers who are willing to go on an adventure provided that they have in their hands some sort of survival kit that would enable them to find cheap but quality accommodation, food, and transportation (Hargroves & Smith, 2005).
Speed Advantage
In the beginning of the case study we are introduced to the CEO who faced the dilemma of doing what he was paid to do and yet endanger a culture that allowed LPP to thrive in a cutthroat world of international publishing. Since the organization has succeeded without the use of traditional accounting practices they believe that they can continue in the next few years without creating significant changes in their management styles (Thompson, 1993). This gives them an advantage when it comes to speed in decision-making processes but not necessarily in the area of production. Publication companies under the control of international conglomerates may not have the same freedom of movement as LPP but when they decide to pursue a particular avenue or marketing strategy they have the funds and network capability to do so.
Manoeuvrability Advantage
Without a doubt this company can be easily manoeuvred to position itself and benefit from new trends and to adjust to changes in the market. This is because the leadership and organization of LPP is imbued by creativity and spontaneity that comes from the founders – Mr. and Mrs. Wheeler. They can produce travel-guides that have detailed information regarding a remote region. Other companies will try to focus on well-known areas because their goal is to maximize their profit. LPP on the other hand finds profitability as their second priority and their number one priority is to go where others refuse to thread.
How LPP Gained Competitive Advantage
Their profitability and wild success is due in large part to their founders who enjoy what they do and find their job not as a means to draw salary and survive on a day-to-day basis. Writing and producing travel-guides for travellers with limited resources is their mission in life. This is why they can endure hardships and numerous challenges without having the urge to cash-in on their success.
On the other hand it can be said that LPP is successful because it focuses on a niche market that will continue to be there and lately shows signs of increasing as the Asia Pacific region continues to grow in terms of economy and its tourism. LPP has now inked a partnership with BBC and yet managed to retain their identity to produce travel-guides that will cater to adventurous travellers who only want to travel with limited funds. This is good news for them because they can maintain their competitive advantages as mentioned earlier and yet at the same time resources available through BBC will also enable them to address some of their weak points.
Sustainable Competitive Advantage
One way to explain their success is the company’s ability to use their competitive advantages into sustainable competitive advantages. They were able to do that by being careful not to be in partnership with organisations whose main goal is to make money the quickest way possible. By doing so, they remain true to their ideals, and the belief that millions of people around the world are still in need of a reliable source of information when it comes to travelling beyond their national borders.
Another major reason why LPP was able to use their CA and turn it into an SCA is by not tampering with a proven system. In the first part of the case study the CEO was described as being in a dilemma because he was hired for the purpose of bringing in his expertise – he is by the way an MBA graduate – and to change accounting systems and other controls in order to establish a system which is considered as an industry standard. However, the Wheelers and even the writers believe that the culture that exists within LPP is the root cause of their competitive advantage and thus, instead of fighting it, the new CEO decided to go along with it and it has proven to be the correct decision.