Rosenbluth International: Strategic Transformation of a Successful Enterprise

Abstract:

Successful companies find it exceedingly difficult to change their business strategy radically in response to impending changes in their competitive environment. Here, we analyze how Rosenbluth International, one of the largest travel agencies, was able to accomplish that. Threatened with disintemediation during the period of drastic restructuring of travel brokerage, the company strategically revised its value proposition. It has divested itself of its leisure travel segment and offered a range of its services on a fee basis to its customers, rather than rely on commissions by the suppliers of travel services, as it had done previously. This strategic change was enabled by information systems, several of them highly innovative, which Rosenbluth had used strategically in its prior business initiatives. The paper analyzes the management of strategic transition at Rosenbluth International in the light of general theory of organizational resistance to change.

Key Words and Phrases:

• competitive information systems
• organizational change
• strategic transformation
• travel industry

Additional information

Notes on contributors

Eric K. Clemons

Eric K. Clemons. For biographical information, please see the Guest Editors’ introduction.

Il-Horn Hann

Il-Horn Hann is a doctoral candidate in the Operations and Information Management Department at The Wharton School of the University of Pennsylvania. He also works with the School’s Reginald H. Jones Center’s Sponsored Research Project on Information: Industry Structure and Competitive Strategy. Prior to joining Wharton, he worked with Gemini Consulting on projects in the telecommunication industry. His education includes a M.S. dual degree in computer science and business administration from the Technical University of Darmstadt (Germany) and an M.S. in information systems from The Wharton School of the University of Pennsylvania. His research interests are broadly in the intersection of information technology and markets; he is especially interested in the economics of electronic markets, the use of information in on-line retailing, and in the economics of software markets. This fall he will be joining the Graduate School of Industrial Administration at Carnegie Mellon University as an Assistant Professor.