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It is critical to weigh different determinants when evaluating a firm's competitive ability. Since businesses, not nations, compete in foreign markets, there is a great need to consider how firms build and maintain competitive advantage, which will enable them to justify the position of the nation in the process. Factor endowments or factors are among the determinants of competitive advantage in a given firm. There is the need to note that even though the various determinants influence the availability of competitive advantage of the whole country, their nature implies that they are more specific to industry than they are typical of a country. As explained by Porter (1990), the basic unit in which analysis for a full understanding of competition is the industry. Porter (1990) further states that the industry is the arena in which the competitive advantage is either lost or won (p. 34).

Current Position of Travel Industries

In travel industries, for instance, the US Travel Association, the internal inputs within the firm greatly influence its position to compete with organizations. Factor conditions are the inputs that influence the competition in any industry. Travel industries not only relies on quality/quantity of the factor conditions but most importantly gain their competitiveness from the effectiveness as well as the efficiency of the way the factors are deployed in a given firm.

The first factor worth considering is the human resources found in the travel industry. Under this factor, a travel industry like US Air Association becomes competitive if the number of personnel matches the workload in the organization. In other words, quantity of human resources is key in travel industries to ensure work is executed within the required time. The other consideration under human personnel is that workers should be endowed with the necessary skills in order to deliver their expected tasks. The management, for instance, should be well versed with coordinating, executing, planning, organizing, and also motivating other personnel within the firm (Whetten and Cameron 2011). Lastly, the cost of hiring human personnel should be justifiable with the work done to ensure the air company realizes profits.

The other consideration is physical resources as they influence whether the travel firm will be competitive or not. A competitive travel industry has adequate land where its operations are based, should have quality physical resources such as alternative power sources and also good supply of water to serve the many processes in the organization. The next factor that impacts competitiveness of a travel industry is capital resources which entail the stock of capital available in the firm as well as associated cost of its deployment. The current competitive position of US Air Association is due to high availability of stock capital, particularly since it is a national and non-profit organization.

Knowledge resources also influence the competitive ability of an air industry. A travel industry such as US Air Association with accumulated technical, scientific, as well as market knowledge in the country as it regards to services and goods offered gains a competitive advantage. The last factor is infrastructure resources, and as explained by Porter (1990), these are the characteristics (quality and type) as well as the cost of using the available infrastructure (p. 74-75).

Recommendations about the Travel Industry

There is the need to note that even though a travel industry has productivity in deployment of factor endowment, it does not directly translate to international success. The competitive advantage of the travel industry is dependent on the condition that other determinants in Porter’s ‘diamond’ are as well as better suited to influence how production factors are utilized favorably. Any travel industry should fully understand the basic as well as advanced factors for achieving competitiveness. Basic factors are the passively inherited and their creation does not require sophisticated social and private investment. Such factors include climate, natural resources, skilled or unskilled labor, location and also debt capital.

On the other hand, a travel industry should be more keen on how it discharges the advanced factor i.e. highly educated personnel and communication infrastructure of the modern digital data. As explained by Bearne (2016), travel industries should embrace the modern day technology in order to improve their position of competitiveness with other firms. Technology presents new opportunities for small business in the travel sector as it ensures consumers from all over the world to ‘stumble' across, for instance, a luxury safari park in Kenya or B&B in Brighton while browsing through online review sites as well as the firms’ own website (Bearne 2016).

The other recommendation for travel industries is that they should adopt big data technology which will help them know the trends, patterns, as well as associations that relate to how their human resources interact with the clients. Any travel industry should consider whether their competitors have adopted big data, and further note the trajectory of big data adoption as well as use in the travel business. With such knowledge, travel industries will become aware of the needs of the consumer, and thus offer goods and services that are intended to attain the possible highest level of consumer satisfaction.

In addition, the industry should be committed to constant upgrading and developing of both advanced and specialized production factors in order to attain significant and sustainable advantage in provision of air travel services. Regarding the factor endowment, travel industries should also distinguish among factors to ascertain the conditions responsible for the establishment of the highest level of competitive advantage. In that light, travel industries should ensure they place more value and emphasis on specialized factors as compared to the generalized factors. Specialized factors in any travel industry are risky and usually, require more focus as well as private and social investment. For instance, human resources in any travel industry are critical for the competitive advantage of the firm. Human resources, as explained by Vučetić (2012), represents a particularly valuable resource as it possesses multi-disciplinary and highly specialized skills and knowledge in tourism and travel (p. 78). Personnel with high-level skills and knowledge enable the organization in creating services and products that have considerably superior value for the clients in that market niche as compared to their competitors (Vučetić 2012, p. 78).

Since competitive advantage emphasizes on provision of value in resources disposed of as well as services and products released to the niche market, the travel industry should invest in highly skilled and knowledgeable personnel. Availability of qualified personnel will ensure that all the other factor conditions within the organization are adequately and effectively utilized; hence the travel industry will realize competitive advantage.


Bearne, S., 2016. How technology has transformed the travel industry. (Online) (updated May 10, 2017) Available at The Guardian: [May 14, 2017]

Porter, M., 1990. The Competitive Advantage of Nations. New York: The Free Press, A Division of McMillan, Inc.

Tisdell, C. A., & Hartley, K., 2008. Microeconomic policy: A new perspective. Cheltenham: Edward Elgar Publishing.

Vučetić, A., 2012. Human resources as a competitive advantage. Turizam, 16 (2), pp.78-87.

Whetten, D. A., & Cameron, K. S., 2011. Developing management skills (8 ed.). New Jersey: Prentice Hall.

December 15, 2022

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