Tripadvisor (ta) Analysis

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If TA is successful in establishing its market across different territories then it would be easy to further leverage this success to gain foothold in flights market and Vacation rentals. Alternative 2 plays an effective role for the success of alternative 1. As, it is not economically feasible for TA to start from the scratch in different market segments. Instead, by collaborating with local partners TA can take advantage of economies of scale of its business partners that can ensure high return on investment. I prioritize choosing the option of expanding the market as top alternative because the markets in developing countries are showing swift change so, it is very important to take advantage of this changing trend. Considering the market scenario and huge competition involved in Vacation rentals and flights, specifically targeting these options could paralyze the available growth opportunities of TA.

The feel the above suggested alternatives would be best for TA at this situation. To start with the revenue sources of TripAdvisor, 77 % of the revenue is generated through click on its text links while display advertising accounted for 13% and subscription fee from business listings contributed around 10% of TripAdvisor revenue[5]. So, if TA can expand its services in international market it could generate more revenue as the number of business listings increase thus boosting its revenue generation through click on its text links, display ads and subscription fees. By implementing Alternative 1 and 2 Mr. Kaufer goals of maximizing success in International market can be achieved which further leads to increase in revenue generation from flights and vacation rentals. Considering another market forecast, “by 2020 about 50 million Indians are expected to travel internationally” [6]. So, expanding its market reach would provide double benefits for TA as it can lead to increase in revenue generated through online flight booking. There are few disadvantages associated with the decision alternatives. First, TA should choose the right local partner as they play a decisive role in the success of TA in emerging markets. Second, organizational structure would be completely decentralized because important strategies regarding service marketization would be implemented by local management. Co-ordinating and integrating the future strategies in different market segments would be very complex and difficult.

Conclusion:

To conclude, Mr. Huber must consider providing more flexible, mobile and easy access to real time information. It is important to stay relevant as online travel industry is evolving with many other firms now trying to imitate TripAdvisor’s business model so, satisfying customer needs must be utmost priority for Mr. Kaufer. Finally, Mr. Kaufer must continue to develop and innovate the new growth opportunities to position themselves and to gain sustainable competitive advantage from its competitors

References:

[1] S.Gupta, K.Herman, “Trip Advisor”, Harvard Business School, Rev: April 2011.

[2] T. Hall, “China Business Travel Spending Poised to Overtake U.S. in 2016”, Bloomberg

Available at: http://www.bloomberg.com/news/articles/2015-10-21/china-business-travel-spending-poised-to-overtake-u-s-in-2016

[3] “The market for booking travel online is rapidly consolidating”, economist

Available at : http://www.economist.com/news/business/21604598-market-booking-travel-online-rapidly-consolidating-sun-sea-and-surfing

[4] “The Global Car Rental Industry Trends, Forecasts and Opportunity Analysis 2014-2019 - Enterprise Rent-A-Car & Hertz Lead the $81 Billion Market”, prnewswire, Available at : http://www.prnewswire.com/news-releases/the-global-car-rental-industry-trends-forecasts-and-opportunity-analysis-2014-2019---enterprise-rent-a-car--hertz-lead-the-81-billion-market-300037693.html

[5] L.Q. Terry, L.Y.C.Claire, “e-Business Model of TripAdvisor.com”,

Available at: http://e-businessmodeltripadvisor.blogspot.com/

[6] “3 key trends in online travel industry”, verbalizeit, Available at: http://www.verbalizeit.com/3-key-trends-in-the-online-travel-industry/