Running head: EXPEDIA INC. STRATEGIC PLAN
Expedia Inc. Strategic Plan
Isabella (Yinqi) Lai Royal Roads University MATM 2017/5/7 IHMN650 – Strategic Strategic Planning for Tourism Instructor: Bill Lewis
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EXPEDIA INC. STRATEGIC PLAN Table of Contents Overview ..........................................................................................................................................3
Current Strategy ...............................................................................................................................3 Growth Strategy ...................................................................................................................4 Technology and product innovation. .......................................................................4 Global expansion. ....................................................................................................6 New Channel penetration. ...................................................... ........................................................................................6 ..................................6 Situation Analysis ............................................................................................................................7 Internal Analysis ..................................................................................................................7 Strengths ..................................................................................................................8 Weaknesses ..............................................................................................................9 External Analysis ...............................................................................................................10 Opportunities..........................................................................................................10 Threats....................................................................................................................11 Summary ............................................................................................................................11 Strategy Formulation .....................................................................................................................12 Strategic Alternatives ........................................................ .........................................................................................................12 .................................................12 Recommended Strategy .....................................................................................................14 Strategy Implementation ...................................................... ............................................................................................................ ..........................................................15 ....15 Conclusion .....................................................................................................................................16 References ......................................................................................................................................17 Appendix A SWOT Analysis of Expedia Inc. ............................................... ................................19 Appendix B STEEP Analysis of Expedia Inc. ............................................... ................................20 Appendix C Porter Five Forces Analysis of Expedia Inc. ................................................ .............21
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EXPEDIA INC. STRATEGIC PLAN Overview
Expedia, an online travel booking site which used to be within Microsoft, launched in 1996. Expedia Inc. is an Online Travel Agency (OTA) in North America evolved from Expedia.com, plays a leading role in empowering business and travelers to utilize technology in travel research, planning, booking and experience (Annual Report, 2016). 2 016). With a dynamic portfolio of 16 brands b rands under the umbrella of Expedia Inc. including Expedia, Hotels.com, Expedia Affiliate Network (EAN), Trivago, HomeAway, Egencia, Orbitz, Travelocity, Hotwire, Wotif Group, Expedia Media Solutions, CarRentals, Classic Vacations, Expedia Local Expert, Expedia Cruise Ship Centers, and Traveldoo, Expedia Inc. has the world’s broadest supply including 385,000 properties, over 500 airlines, over 25,000 destination services and activities, car rental companies as well as cruise lines
(“Expedia Inc.”, 2017). In 2017, Expedia, Inc. was named as one of the 30 Best Workplaces in Technology by Fortune Magazine (“Expedia Inc.”, 2017). In order to reach the strategic goals of revolutionizing travel through the power of technology, Expedia Inc. has adapted growth strategy by means of technology and product innovation, global expansion and new channel penetration (Annual Report, 2016). Although Expedia Inc. is one of the most powerful OTAs in the world with internal strength and external development opportunities, Expedia Inc. is still facing the threats such as from the competitors Priceline and TripAdvisor. The difficulties of entering specific new markets are also challenging Expedia Inc. To ensure the sustainable growth and avoid the negative impact of the threats, a recommended strategy will be proposed to Expedia Inc. Current Strategy
Expedia Inc., the world’s largest online travel company, aims at owning and powering the best travel brands in the world world (Expedia Inc., Inc., 2017). Technology and product innovation, customer loyalty, global expansion, and channel penetration will be the main focuses of the growth drivers
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EXPEDIA INC. STRATEGIC PLAN (Expedia Inc., 2017). The goals of Expedia Inc. lie in achieving the competitive advantages by
being the “the best supply position in the world”, scaling in the “world-class technology and operations platforms”, and gathering the “unsurpassed intelligence” from the smart teams (Expedia Inc., 2017). Strategic level decisions set the long-term direction for the organization to achieve the competitive advantages (Evans, 2015). Expedia appoints the above goals which set the strategic foundation for long-term development. According to Evans (2015), tactical level decisions are relating to meet the strategic priorities and implementing the strategies. Expedia’s tactical level decisions properly corresponding to the strategic level. From the annual report (2016), Expedia Inc. is working on the growth strategy in terms of product innovation, global expansion and new channel penetration. Growth Strategy
According to Evans (2015), the Ansoff matrix is the most common model for directing organizations to growth strategy. From Ansoff (1987), there are four alternatives which involve two variables components: products and markets to achieve the growth strategy. They are market penetration which increases market share in the existing market with the existing products, market development which explore the new market with the existing products, products development which develop new products in the existing markets, and diversification which develop new products to serve new markets (Ansoff, 1987). In Expedia Inc.’s strategy, all four dimensions of growth strategy have been utilized in terms of technology and product innovation, global expansion and new channel penetration to achieve the strategic growth. Scaling the business and
drive down the costs are also part of Expedia Inc.’s grow th strategy because trimming margins could attract new hotels in the emerging markets and convince the existing hotel suppliers to provide better inventory (Schaal, 2015). Technology and product innovation.
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EXPEDIA INC. STRATEGIC PLAN Expedia Inc. as the online travelling company, online services are its core product and technologies innovation is the key to achieving competitiveness. In order to improve the product which is the services experience, Expedia Inc. develops new technologies to deliver better service experience to the customers. In the past several years, Expedia Inc. focused on powering the technology, supply and customer service to the products at a faster pace, especially the platforms developed by the new functions and globally launch. For example, Hotels.com and the Brand
Expedia’s new global platforms launch enable the services to drive growth rates in the new markets. m arkets. Also, the Travelocity-branded sites after shifting to the Expedia technology platform started to offer services in the US and Canada (Annual Report, 2016). Apart from developing new technologies to strengthen competitiveness, Expedia Inc. adopted merging and acquisitions Strategy to achieve horizontal product development. Through acquiring the Travelocity brand, Orbitz Worldwide, and HomeAway Inc. in the past two years (Annual Report, 2016), Expedia Inc. expanded its product lines into a broader spectrum including hotels, cheap flights, cruise ship, car rentals, destination activities and vacation rental to the existing markets. Moreover, the investment in the joint venture with AirAsia opens up a new pattern to align with airlines for offering offering the flight options. Expedia Inc. also develops its product vertically in enhancing the depth of the services. To satisfy the different needs of customers, Expedia Inc. enriches its services in different platforms focusing on different target markets. Generally, travel is the leisure behavior. Most travelling services target the leisure travelers but miss an important segment of business travel. Engencia is the brand under Expedia Inc. targeting business travelers. When most of the OTAs are competing on lower price, Expedia Inc. offers premier vacation through Classic Vacation brand for the highend market. Also, Expedia Inc. provides products for the wholesale market. Expedia was originally
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EXPEDIA INC. STRATEGIC PLAN a business to customers (b2c) online travelling platform. In order to reach the wholesale market and leverage the inventory, Expedia Inc. created the EAN to realize the business to business (b2b) partnership. Global expansion.
Since the launch of Expedia.com in 1996, Expedia Inc. has made the ambitions in extending the global reach, so that leveraging the significant investment in technology, operations, brand building and supplier relations have been planned strategically. strategically. Through owning the diverse brand portfolios, Expedia Inc. expands globally which mostly attained by merging and acquisition. Except the primary brands of Expedia family including Expedia, Hotels.com, Egencia, and EAN of are operating in the US and international points of sale in Europe, Asia Pacific, Canada and Latin America, the rest of brands were strategically merged and acquired. The acquisition of Wotif Group which completed in 2014 open the Australian market expansion for Expedia Inc. (Annual Report, 2016). Owning the majority share of Trivago enable Expedia Inc. to explore the competitive Europe market in seeking global opportunities (Annual Report, 2016). In addition, having the commercial agreements with Ctrip and eLong in China as well as Decolar in Latin America (Annual Report, 2016) offers opportunities to learn these markets with d ifferent cultures and lays the foundation for long-term expansion. New channel penetration.
In the past few years, mobile devices have been leading technological innovations and developments to create new opportunities for online travel bookings (Annual Report, 2016). As consumers are more likely to complete the last-minute booking nowada ys, travel bookings through mobile electronic devices present an opportunity for incremental growth (Annual Report, 2016). According to the Annual Report (2016), Expedia Ex pedia Inc. had progress in creating new mobile websites
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EXPEDIA INC. STRATEGIC PLAN and applications for all the brands. Expedia Inc’s chief executive Dara Khosrowshahi also indicated that social platforms are the popular wave which should not ove rlook, so Expedia Inc. is aggressively experimenting them, especially in voice interaction on a platform basis (Tnooz, 2016). From Khosrowshahi, Expedia Inc. realizes building the unstructured voice search queries and producing the structured search results is necessary for the future growth (Tnooz, 2016). In addition, the situation of cross-device usage between websites and mobile apps in travel planning process has increased (Annual Report, 2016). It also reported reported that mobile booking of Expedia Inc. Inc. contributed approximately one third globally in 2016 (Annual Report, 2016). Therefore, Expedia Inc. regards mobile platforms as an efficient marketing channel to drive traffic (Annual Report, 2016) and sales in this decade. Situation Analysis
According to Morrison (2010), “the analysis of marketing opportunities and problems is
the foundation for starting and sustaining a successful business” (p.134). Having the situation analysis which studies the Strength, Weakness, Opportunities and Threats (SWOT) of Expedia Inc., would have a better understanding of the comparative and competitive advantages. Through analyzing the internal and external situation, it would assist to utilize the existent resources effectively and seize for the future opportunities more easily. Internal Analysis
From Evans (2015), an internal analysis is to provide the detailed understanding of the effectiveness of current strategies and resources allocation. Generally, an internal analysis will consist the analysis of the resources, competencies, internal activities in value chain analysis, and products and position in the market (Evans, 2015). 20 15). The analysis an alysis of strengths and weaknesses of Expedia Inc. would lie in the above internal factors to explore the broader understanding of the current situation.
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EXPEDIA INC. STRATEGIC PLAN Strengths.
In terms of resources, Expedia Inc. has a broad variety of strong suppliers supporting the diverse products and services all over the world. After the merging and acquisition in the recent year, Expedia Inc. is operating 16 travel brands reaching over 200 countries (Annual Report, 2016). The availability of products covers a variety of hotels and accommodations, airlines, car rental companies, cruise line and destination services which almost cover every sector in the tourism industry. Especially in hotels sector, Expedia Inc. has been working with the world largest hotel chains. Since September 2016, Expedia Inc. started to power the vacation packages for the Vacations by Marriott which Expedia provides technology and transportation and Marriott provides the hotel options (Schaal, 2016). Also, the various brands enable Expedia Inc. Inc. to provide the mixed price products to different target markets which maximize the coverage for the market demand. With the broad profile of brands and strong supplier partnership, Expedia Inc. becomes influential and grows the power of bargaining in the industry. For competencies, Expedia Inc. has grown into the world-leading online travel company with highly regarded brand awareness, enormous economic scale, and advanced innovative technology. “Expedia” has been a well-known brand name since its establishment in 1996 because of its success and positive reputation as a pioneer of OTA. With over 1.2 million online bookable vacation rental listing in the world, Expedia Inc. has grown its size into over 16 brands, b rands, 200 travel booking sites and more than 150 mobile websites in 35 languages (Annual Report, 2016). In economic scale, the revenue of Expedia Inc. reached 8.77 billion USD (“Statista”, 2017). According to the Annual Report (2016), “the aggregate market value of the registrant’s common equity held by non-affiliates was over $12 billion” in June 2016 (P4). In technology development, Expedia Inc. made key investments in developing technology platforms to deliver innovations at
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EXPEDIA INC. STRATEGIC PLAN a faster pace (Annual (Annual Report, 2016). Expedia Inc. owns the award-winning mobile apps and the world-class technology platforms which enable travelers to have access to the latest technology and enjoy the online service experience (Annual Report, 2016). Weaknesses.
Even though Expedia Inc. has a strong profile as one of the dominating OTAs, there are still several weaknesses should be concerned. As an OTA, the most valuable entities of Expedia Inc. possessed are the online platforms. Comparing to other sectors of the tourism industry, most of them owned physical ph ysical entities such as hotels possess the building, airlines owned the planes and theme parks owned the entertaining infrastructures. However, Expedia Inc. is using the low-cost business model which only possesses the intangible entities. Therefore, in terms of resources, Expedia Inc. is heavily relying on suppliers because suppliers provide the products for the platforms to sell. sell. It causes the bargaining power of suppliers is high in the value chain. In terms of competencies, the platforms of Expedia Inc. are highly dependent on the search engine which means Expedia Inc. has to undertake the risks caused by the drawbacks of the search engine method. As using the low-cost business model and high reliance on suppliers, Expedia Inc. is also easy to be substituted. New entrants can start easily with creating the similar websites if they have the supplier resources and probably offering lower prices to complete. The easy replication of the business also results in the fierce rivalry between Expedia Inc. and competitors, such as Priceline and Tripadvisor. In addition, many well-known companies in the tourism industry which have strong capabilities started to enhance direct booking. Since late 2015, hotel chains like Marriott and Hilton have been advertising that loyalty program members could get cheaper room rate if they book through the websites directly (Schaal, 2016). As a result, consumers have growing
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EXPEDIA INC. STRATEGIC PLAN power to decide which booking bo oking ways they prefer. Therefore, in the value chain, the threat of new entrants, the threat of substitution, the power of buyers and the rivalry among businesses in the industry are respectively high for Expedia Inc. External Analysis
From the macro-environment, a number of factors are not only influencing the organization itself, but also affecting the whole industry (Evans, 2015). Having a comprehensive external analysis helps the organization to handle the effects caused caused by the environment, which ensures the strategies are implemented appropriately (Evans, 2015). From Evans (2015), STEEP is the most widely used tool for macro-environment analysis. It includes the factors of social, technological, economic, environmental and political influences (Evans, 2015). The external analysis of Expedia Inc. will continue analyzing the opportunities and threats elements of SWOT with evaluating the five factors of STEEP. Opportunities.
In the sociocultural aspect, the internet has become part of people’s life. Online purchase is a habit in current lifestyle which Expedia Inc. has positive prospect in doing online business. In addition, the idea of sharing economy is gradually acceptable by the public which lays a good foundation to develop the HomeAway platform. In the technological factors, the growing internet penetration and popularity of mobile devices are beneficial to Expedia Inc. because it invests significantly on platform technology and mobile services to ensure the quality of the buying experience. In the economic factors, the strong US currenc y and the decline of fuel cost encourage encou rage the American to travel which provides Expedia Inc. the oppo rtunities to offer services. Politically,
the simplification of visa application and government’s support for tourism such as the Travel Promotion Act 2009 (“Visit California”, n.d.) are positively influencing Expedia Inc. Inc. in generating travel booking.
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EXPEDIA INC. STRATEGIC PLAN Threats.
The STEEP factors which create opportunities for Expedia Inc. could also challenge
Expedia Inc.’s growth strategy. In terms of sociocultural, the demographic of online users is mostly the generation X and the millennials, but the baby boomer generation is the one who has money and time to travel. The online character of Expedia Inc. possibly causes the absence of the users of this generation. As mentioned before, Expedia Inc. has the dependence on search engine technology which could become a threat. In the fast pace of technology evolvement, relying on the sole technology is dangerous because competitors may invent a brand-new technology which can totally change the situation of the industry. In economic factors, the seasonality of tourism
industry and direct booking promotion from the suppliers are the challenges to Expedia Inc.’s economic growth because the unstable receipts may affect the merging and acquisition plans. Environmentally, the waste and pollution from hotels and airlines are still the issues for the environmentalist. They also negatively influence Expedia Inc. because Expedia Inc. is mostly selling airline tickets and hotel rooms. Lastly, in the political factors such as the travel ban which greatly affected on tourism industry including Expedia Inc. In addition, sharing economy econom y is still a controversial issue which needs certain policies to regulate. It would directly influence the development of the HomeAway platform. Summary
The situation analysis of Expedia Inc. can be concluded in the SWOT model (Appendix
A), STEEP model (Appendix B) and the Porter’s five forces model (Appendix C). As Expedia Inc. has the strong resources and competencies base, it enables Expedia Inc. to grow the power of bargaining in the industry. To a certain extent, it helps Expedia Inc. to avoid avo id the risks result from the weaknesses. Expedia Inc. follows the fast-growing trend of online purchase and mobile booking which lay the foundation for its success. This trend would continue to generate the
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EXPEDIA INC. STRATEGIC PLAN opportunities for Expedia Inc. but it would be more competitive and requires advanced technology innovation. The economic threats which cause the unstable economy receipts would be the major influence challenging Expedia Inc.’s existing strategy to achieve the long-term goals. Also, the easy substitution drives Expedia Inc. to be differentiated from the competition. In order to overcome the threats and take advantage of the opportunities, Expedia Inc. could optimize the existing strategy by adding the following alternative strategic elements. Strategy Formulation
Currently, Expedia Inc. is adopting the growth strategy through product innovation, global expansion, and new channel penetration. After comparing the situation analysis, although Expedia Inc.’s growth strategy help avoiding some of the threats and weakness and grow the strength to seize the opportunities, there are still other feasible options that Expedia Inc. could optimize the strength and create more developing space. Strategic Alternatives
Porter (1985) introduced the generic strategy framework which is useful in providing insights into competitive advantages. In the framework, the cost leadership strategy, differentiation strategy, and focus strategy (Porter, 1985) can also apply to Expedia Inc.’s development options. Cost leadership strategy.
Expedia Inc. could adopt the cost leadership strategy to achieve the growth. As Expedia Inc. has the broad profile brands with various produ cts and resources around the world, it is capable for Expedia Inc. to combine the existing services with a competitive price. Through providing the comprehensive package options, the hotel and flight booking can drive the sales of other products such as car rental and attractions. The more variety of products that consumers choose, the larger discount they can get. By offering the lower price on packages, Expedia Inc. could generate
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EXPEDIA INC. STRATEGIC PLAN consumers spend more money on the platform in achieving the economies of scales by highvolume sales. The advantages of this strategy lie in providing more packages options for customers, the sales volume runs faster and generating higher consumption to the platform. However, it may be followed by competitors because on-line travel platform is price competitive. It can be imitated easily if the competitors also have a broad variety of product resources. Differentiation strategy.
Adopting differentiation strategy is another alternative for Expedia Inc.’s growth. From Evans (2015), differentiation differentiation strategy focuses on upgrading products to a superior level. In Expedia Inc. which have a broad variety of products, offering superior services to the customers could help it to achieve differentiation in the competitive market. To enhance the convenience of online purchasing, Expedia Inc. can integrate the similar function sub-brands into one platform to provide an all-in-one platform services. Instead of booking on several platforms for different products of the specific destination, booking directly on one platform for all the products and services would offer great convenience for travelers. Moreover, applying Online to Offline (O2O) strategy could be the differentiated methods to upgrade the customer service. Tomes (2016) indicated that the offline presence is the complement of the online channels. O2O development can truly leverage the engagement for customers (Tomes, 2016). Customers feel they receive more value from shopping in the physical stores than shopping online because the offline services normally provide more convenience, personalisation, and engagement (Tomes, 2016). Offering offline service points would be the key to differentiating other online travel platforms which could offer a more comprehensive customer service no ma tter before or after the sale.
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EXPEDIA INC. STRATEGIC PLAN The differentiation strategy can generate the benefits for Expedia Inc including enhancing the comparative advantages in customer experience, gathering the loyalty members from the original sub-brands, leverage the customer engagement and creates an additional barrier for new entrants. However, the operation cost of applying the differentiation strategy would increase which may cause a higher products price. It may result in losing the price sensitive customers. Focus strategy.
Expedia Inc. can also consider the focus strategy to enhance the depth of the major marketing. As Expedia Inc. started with strong strong hotel resources in North America, it it could develop the profession in hotel sectors by integrating hotel entities. Since Expedia Inc. has plenty of experience in merging, acquiring as well as integrating by the joint-venture, merging with hotel brands would enhance the strength in terms of resources. resources. Owning hotel brands enable the sufficient sufficient inventory for the platforms, which ease the repl y on other suppliers. The pros. of the focus strategy would be the enhancement on competencies by owning physical entities instead of all intangible entities, lessening the power of suppliers, building b uilding the brand awareness of the specialization in the specific sectors, and domaining certain hotel resources in the market. However, the limitation of product variety expansion and the high cost of investment would be the cons for the focus strategy. Recommended Strategy
Considering Expedia Inc.’s strengths and weaknesses, and the opportunities and the threats that it is facing, it is recommended Expedia Inc. to select the differentiation strategy for further development. As Expedia Inc. is adopting the growth strategy which achieved its nowadays success, the differentiation strategy would be a beneficial supplement along with the growth strategy. Being differentiated creates more development space to seize the opportunities. It helps to differentiate Expedia Inc. from the rivalry among the competitors with offering different buying
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EXPEDIA INC. STRATEGIC PLAN experience. The superior service could also enhance the reputation of the Expedia brand so that it influences the consumer behavior in decision making. In add ition, the online and offline interaction extends the target market coverage on baby boomer who has great potential in consuming travel products. With setting up the offline service points, it increases the cost of the business model which establish the barriers for being substituted. The differentiation strategy would largely enhance the competencies of Expedia Inc. which is the major reason to recommend it. Strategy Implementation
From Evans (2015), to successfully implement a strategy, the aspects of resources, configuration and change should be considered. con sidered. For Expedia Inc. implementing the differentiation strategy which is to upgrade the customer experience, it is necessary to follow the above three aspects to ensure better implementation. First, Expedia Inc. should consider managing and reallocating the existing resources and develop the new resources. The resources include physical ph ysical resources, financial resources, human resources and intangible resources (Evans, 2015). For the brand integration development, managing the existing intangible resources would be essential as Expedia Inc. has a broad variety of products resources all over the world. Also, improving the existing Expedia.com platform enlarges the potential to integrate all the brands and products because it ensures that the all-in-one platform has the capacity of holding the integration. For the O2O development, Expedia Inc. should develop the physical resources, financial resources and human resources. Due to the O2O development involve the physical entity, Expedia Inc. should also prepare the site selection, off-line employee recruitment and the budget planning. Secondly, Expedia Inc. should also pay attention to the configuration of culture and structure. When Expedia Inc. integrate the sub-brands into the all-in-one platform, the cultures of the sub-brand should also be considered to merge. To accord the Expedia brand culture, the offline service points should correspond the online culture. Also, the organizational structure should
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EXPEDIA INC. STRATEGIC PLAN adjust with adding the offline component but the adjustment should be still appropriate for Expedia Inc. in achieving the long-term goals. Thirdly, considering the managing and leading change, Expedia Inc. should still implement the growth strategy as the foundation and apply the differentiation strategy as the complement. The change would lead to the evolvement, meanwhile, Expedia Inc. should still pursue the long-term goa ls constantly. Conclusion
In conclusion, Expedia Inc. could achieve its ambitions through implementing the strategies. Expedia Inc. sets the long-term goals of owning and powering the best travel brands in
the world (“Expedia Inc.”, 2017). In order to reach the goals, Expedia Inc. is implementing the growth strategy currently. Through analyzing the situation, there are some threats and weaknesses challenging Expedia Inc. and the existing growth strategy. To enlarge the growth strategy, enhance the strength of Expedia Inc. itself in seizing the external opportunities and overcome the threats and weaknesses, it is recommended for Expedia Inc. to adopt the differentiation strategy adding on the growth strategy. By developing the brands integration all-in-one platform and the O2O strategic approaches, Expedia Inc. could upgrade the service experience to differentiate from the competitors. Both approaches would help Expedia Inc. to accomplish the growth in the market. Most importantly, both approaches are aiming at the goals of the organization. No matter what methods to proceed, the strategies should always follow the direction of the organizational goals.
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EXPEDIA INC. STRATEGIC PLAN References
Annual Report. (2016). Annual Reports. Retrieved from Expedia Inc.: http://files.shareholder.com/downloads/EXPE/4401132722x0x940178/CA6490D7-8F564294-8EFD-F79F75807C44/2016_Annual_Report.pdf Ansoff, I. (1987). Corporate Strategy, London: Penguin. Euromonitor International. (2009, March). Expedia Inc. Retrieved from Euromonitor International: http://www.siimt.com/work/models/ http://www.siimt.com/work/models/siimt/Resource/1098/expedia.pdf siimt/Resource/1098/expedia.pdf Expedia Inc. (2017). Mission, Vision and Values. Retrieved from Expedia Inc.: http://www.expediainc.com/about/mission-vision-values/ Morrison, Alastair M. (2010). Hospitality and Travel Marketing (4th ed.). Toronto: Cengage Learning. Porter, M. E. (1985). Competitive advantage: creating and sustaining superior performance. 1985. New York: FreePress. Schaal, D. (2015, May 1). Expedia’s CEO Has a Formula to Beat Rivals Through Acquisitions and Growth. Retrieved from Skift: https://skift.com/2015/05/01/expedia-ceo-has-aformula-to-beat-rivals-through-acquisitions-and-growth/ Schaal, D. (2016, March 15). Challenges in Travel Booking 2016: What Can Expedia Do For An Encore? Retrieved from Skift: S kift: https://skift.com/2016/03/15/challenges-in-travel-bookinghttps://skift.com/2016/03/15/challenges-in-travel-booking2016-expedia/ Schaal, D. (2016, September 6). Expedia Is Now Helping Marriott Sell Hotels on the Chain’s Website. Retrieved from Skift: https://skift.com/2016/09/06/expedia-is-now-helpingmarriott-sell-hotels-on-the-chains-website/ Statista. (2017). Revenue of Expedia Inc. worldwide from 2007 to 2016. Retrieved from Statista: https://www.statista.com/statistics/269387/revenue-of-expedia/
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EXPEDIA INC. STRATEGIC PLAN Tnooz. (2016, November 17). Expedia’s CEO talks long-term strategy. Retrieved from Tnooz: https://www.tnooz.com/article/expedia-Dara-Khosrowshahi-2016/ Tomes, P. (2016, April 29). What are a re the main benefits of an O2O strategy? strateg y? Retrieved from Linkedin: https://www.linkedin.com/pulse/what-main-benefits https://www.linkedin.com/pulse/what-main-benefits-o2o-strategy-paul-tomes -o2o-strategy-paul-tomes
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EXPEDIA INC. STRATEGIC PLAN Appendix A. SWOT Analysis of Expedia Inc.
Strengths
Weaknesses
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Broad brands profile (world-wide)
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Intangible entities
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Strong suppliers resource
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Heavy reliance on suppliers
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Mix price platforms
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Dependence on search engine
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Popular brand name and positive reputation
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Easily substituted
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Enormous economic scale
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Growing power of buyers
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Advanced technology investment
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Rivalry among competitors
Low-cost business model Opportunities •
• •
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The trend of on-line purchase habit Growing embracement of the sharing economy (HomeAway) Growing internet penetration, popularity of mobile devices
Threats • •
Demographic differences: Baby Boomers Fast change technology, threats from competitors
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Direct booking to the hotels or airlines
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Seasonality influence stable income
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Strong US dollors, lower oil price
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Waste and pollution on hotels and airlines
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Demand from the emerging markets
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Sharing economy regulations (HomeAway)
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Travel ban
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Disasters (war, terrorism, diseases)
•
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Government support on tourism: Travel Promotion Act (2009) Less restrictions on visa process
(Euromonitor International, 2009)
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EXPEDIA INC. STRATEGIC PLAN Appendix B. STEEP Analysis of Expedia Inc.
Social
The trend of on-line purchase habit Growing embracement of the sharing economy (HomeAway) (HomeAway) Demographic differences: miss Baby Boomers market
Technological
Growing internet penetration Popularity of mobile devices Fast change technology, threats from competitors
Economic
Strong US dollors Lower fuel cost Direct booking to the hotels or airlines Seasonality of tourism industry
Environmental
Waste and pollution on hotels and airlines
Political
Government support on tourism: Travel Travel Promotion Act (2009) Less restrictions on visa process Regulating Sharing economy (HomeAway (HomeAway)) Travel ban
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EXPEDIA INC. STRATEGIC PLAN Appendix C. Porter Five Forces Analysis of Expedia Inc.
Thread of new entrants (Med-High)
Power of suppliers (Med-High)
Rivalry among competitors (High)
Power of buyers (Low-Med)
Threat of substitution (Med-High)
