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(This passage was excerpted from material
published in 1993.)
Like many other industries, the
travel industry is under increasing
pressure to expand globally in order
to keep pace with its corporate cus-
(5) tomers, who have globalized their
operations in response to market
pressure, competitor actions, and
changing supplier relations. But it is
difficult for service organizations to
(10) globalize. Global expansion through
acquisition is usually expensive, and
expansion through internal growth is
time-consuming and sometimes
impossible in markets that are not
(15) actively growing. Some service industry
companies, in fact, regard these
traditional routes to global expansion
as inappropriate for service industries
because of their special need to pre-
(20) serve local responsiveness through
local presence and expertise. One
travel agency has eschewed the traditional
route altogether. A survivor
of the changes that swept the travel
(25) industry as a result of the deregulation
of the airlines in 1978—changes that
included dramatic growth in the corporate
demand for travel services,
as well as extensive restructuring and
(30) consolidation within the travel industry—
this agency adopted a unique structure
for globalization. Rather than expand
by attempting to develop its own offices
abroad, which would require the devel-
(35) opment of local travel management
expertise sufficient to capture foreign
markets, the company solved its
globalization dilemma effectively by
forging alliances with the best foreign
(40) partners it could find. The resulting
cooperative alliance of independent
agencies now comprises 32 partners
spanning 37 countries.
Q33:
The passage suggests that one of the effects of the deregulation of the airlines was
A. a decline in the services available to noncommercial travelers
B. a decrease in the size of the corporate travel market
C. a sharp increase in the number of cooperative alliances among travel agencies
D. increased competition in a number of different service industries
E. the merging of some companies within the travel industry
Answer:E
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Q34:
The author discusses a particular travel agency in the passage most likely in order to
A. provide evidence of the pressures on the travel industry to globalize
B. demonstrate the limitations of the traditional routes to global expansion
C. illustrate an unusual approach to globalizing a service organization
D. highlight the difficulties confronting travel agencies that attempt to globalize
E. underscore the differences between the service industry and other industries
Answer C
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Q35:
According to the passage, which of the following is true of the traditional routes to global expansion?
A. They have been supplanted in most service industries by alternative routes.
B. They are less attractive to travel agencies since deregulation of the airlines.
C. They may represent the most cost-effective means for a travel agency to globalize.
D. They may be unsuitable for service agencies that are attempting to globalize.
E. They are most likely to succeed in markets that are not actively growing.
Answer D
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