Tripadvisor (ta) Analysis

Case Analysis: TripAdvisor[pic 1]

Business Telecommunications

MISSISSIPPI STATE UNIVERSITY

                                            N.L.V.Chaitanya

Summary:

The case which I will be discussing now is about TripAdvisor (TA) written by Harvard Faculty Sunil Gupta and Kerry Herman. The case discusses about the three available options for TA to expand and grow along with the key challenges and competition in those respective industry segments. The case also examines the strategies implemented by TA which helped them to become the most popular travel related community in the world. In this case analysis I would provide Mr. Kaufer with some possible alternatives along with advantages and disadvantages of each alternative. After the detailed analysis I would examine the possible outcomes associated with the decision alternatives.

Situational Analysis:

The success mantra for TA is due to the user generated content that allows users of TA to share information and post the review of hotel, flights and vacation rentals on the listings available in its website. The reason for the success of TA in relatively short span can be attributed to various factors. First, TA doesn’t charge any subscription fees to avail its services for the users. Second, with vast amount of user generated content people can know what they can expect from a particular listing and get an idea of what they are getting into. Mr. Kaufer believed in “speed wins” philosophy and encouraged managers to take independent decisions which has been instrumental in TA success over the years [1]. Mr. Kaufer always believed in exploring new opportunities in order to enhance service in existing segments and to expand into new markets. The main challenges as described in the case study is that TA has to compete with the industry leaders in order to purse its growth initiates in vacation Rentals, flights and international expansion. Now, the main goal of Mr. Kaufer is to overcome the challenges associated with the available options to expand its customer base by targeting new market segments.

Alternatives:

The primary alternative would be to expand its services in international markets. For any organization attaining global market is a biggest challenge, particularly Chinese market where many industry leaders like eBay and Yahoo failed [1]. It is important to capture Chinese market for TA because the country is now served with the highest number of internet users and one of the top online travel spending country across the globe. Corporate expenditure of china in international and domestic travel is projected to account for $322 billion in 2016 exceeding US travel spending at $303 billion [2]. It is estimated that Chinese online travel market would be worth $30 billion in 2015[3]. In order to be successful in this emerging market it is important to understand the market and culture as the needs and desires of consumers may vary depending on the country. Also, TA marketing strategy is crucial to establish market in China. Brand localization with content marketing is key factor to differentiate and position the services of the TA in international market. Moreover, to enhance its brand image it is important to choose a right local partner to collaborate which can help in diffusing TA brand name by incorporating to the local needs by generating high user engagement. Collaborating with the right business partner is important because they play a key role in translating the content and adapting to the required situation based on the needs of the local users.

The other alternative would be to expand its service offering by creating strong value chain that can ensure success in international market and online flights booking market. The reason stated by Mr. Kaufer for entry in flights market is to be part of the planning process earlier. But, I feel that by providing additional services like cab rental TA could make planning process more complete. Forecasts predict that global car rental will reach an estimated value of $81.2 billion by 2019[4]. The number of online cab rental service providers is on increasing spree in US as well as many developing countries. Similar to vacation rentals online cab rental service industry is fragmented so, integrating all the cab service providers at one platform can benefit TA. Also, it would be easy for users to compare prices among different service providers and further it can be potential source of revenue for TA. By adding additional services TA can provide a more comprehensive user experience as it avoids user to navigate into different websites for completing the online trip booking planning process. As TA launched its metasearch service for flights in USA they should follow similar business model in international market to leverage the increasing number of online flight booking in those market segments. In order to compete with industry leaders it is important to develop strong value chain in emerging markets by collaborating with potential business partners. Extending the available services and creating strong value chain makes TA more vertically integrated so that it can offer personalized deals and offers to its users which can also be beneficial in attracting new customers using TA service. Particularly people in developing countries like China, India and Brazil are price sensitive so, in order to attract the new customers TA has to provide additional benefits that can satisfy the needs of the customers. Increasing the user base in the international markets and increasing the available services can position TA in advantageous position as it can have better negotiation power over its business listings which can result in offering hotel bookings and vacation rentals at lower prices than its competitors.