Name: Michael D. Lam

Name: Michael D. Lam

Section: 006

Date: March 15, 2018

EXECUTIVE SUMMARY

        Expedia is the leading brand within the online travel agent industry. It provides a platform to connect a network of travel suppliers to consumers and businesses looking for transportation and accommodations while traveling. Expedia’s mission is to empower every traveler with advanced technology to research, plan, book, and experience a great trip. Its vision is to be the biggest. They value technology and growth. Their current growth strategy also focuses on technology development and rapid expansion through acquiring travel brands from around the world. Expedia’s stakeholders are its employees, travel brand relationships, acquired brands, and its competitors.

Overall, Expedia’s revenues and expenses are increasing. Expedia’s debt is fairly high. Legally, there are only claims against Expedia in regards to city and state taxes in the United States. In addition, patents are highly focused by Expedia because of its platform’s technological and competitive advantage.

Furthermore, Expedia’s strengths and opportunities will only increase over time with higher disposable income, a growing economy, and its growth from partnered brands. Its threats remain relatively stable because there are inherent risks within the travel and tourism industry associated with other travel related industries like the airlines. Their biggest weakness are costs from rapid expansion; however, its costs are seen as investments.

Expedia’s biggest competitors are Priceline, TripAdvisor, and American Express’ Global Business Travel. Priceline offers a similar product but with a smaller brand network. TripAdvisor brands on its ability to help customers plan trips. Global Business Travel is a management service for businesses to help plan, track, and adjust trips to optimize profits.

        The three biggest gaps Expedia possess are its cost weaknesses, reliance on other brands and suppliers, and its competitor landscape. Due to its large company size and its rapid expansion, Expedia has developed a cost weakness for the last 3 years with a large debt amount, which is decreasing net profit margins to negative percentages. Since Expedia is an online travel agency, it acts as the middleman between the travel company and the traveler. Due to seasonality and economic trends, this leaves Expedia vulnerable during the off season and limited during the peak season. From Expedia’s business model, its main drivers of growth are from website traffic and the quality of purchases, which is very competitive within the digital landscape.

        Three solutions will be able to fix all three problems: downsizing horizontal growth and focusing on vertical growth, shifting relationship structures with other travel brands, and rebranding to distinguish Expedia. The best apparent solution is to rebrand through the development of an automated trip planner. The criterions used were costs, feasibility, time, customer attrition, and new customer growth.

Part 1—Company Discussion

Introduction

Expedia Inc (EXPE) is an online travel company who connects businesses with all travelers in a quality experience. EXPE started in 1996 as a division of Microsoft and has now risen to a $19.89 billion company (Expedia Inc, “Mission, Vision, Values”). It is named the world’s largest online travel company. With over 20,000 employees worldwide, Expedia has the world’s broadest supply portfolio: “350,000 properties, over 1.2 million online bookable vacation rental listings in 200 countries, and over 500 airlines, packages, rental cars, cruises as well as destination services and activities” (Expedia Inc, Form 10-K).

EXPE is headquartered in Bellevue, Washington, but has subsidiaries all around the world like Travelocity, Orbitz, HomeAway and more (Expedia Inc, Form 10-K). EXPE’s major value proposition is its wide range of travel suppliers, well adaptable search engine for the customer, and fare aggregator websites. Combined with other technological factors and ever expanding markets, Expedia provides a large quality travel planning experience on one website. The power to book lodgings, transportation, and activities in one stop is an efficient and convenient system that is pertinent now than ever to the people who value and try to optimize their time daily.

Mission

Expedia Inc. declared its mission to  “...empower[...] business and leisure travelers through technology with the tools and information they need to efficiently research, plan, book, and experience travel” (Expedia Inc, Form 10-K). The company then continues to expand on the specific qualities and actions they and their travel brands should possess like innovation, aggressiveness, speed, independence, expansionism, and much more. Within a revolutionizing industry of hospitality and travel, technology calls for such qualities from a company like EXPE. This is why EXPE’s website is rapidly changing and improving with convenience and performance features for an optimized digital customer travel planning experience.

Vision

Although similar to their mission, EXPE’s vision can be summarized by a short statement, “We want to own and power the best travel brands in the world” (Expedia Inc, “Mission, Vision, Values.”). EXPE then defines these best brands as being innovative, fast, and genuinely value driven for their customers. By the desire to own the best travel brands, EXPE leaves a vague definition of the quantity of brands owned, which implies no limit to their self fulfilling goal. Since their inception in the late 90’s, the travel company has grown large business relationships with related travel brands and does not show to be stagnating towards their vision.

Values

The values for EXPE is not exact but can be captured within these list of values from their about page: different, humble leadership, transparency, speed, scientific methodologies, teams, technology, innovation, loyalty, and expansionism (Expedia Inc, “Mission, Vision, Values.”). EXPE places their business model premises within scientific methodologies, technology, and innovation. This is where their value proposition lies. The catalyst for their growth lies within the speeds of their expansion. From the description of their mission and vision statements and their actions with the industry, these values are clearly their priority within their strategies.

Current Business Strategy

"Our primary growth drivers are technology and product innovation, global expansion, and new channel penetration." is the premise EXPE has built its business model on since 1996 (Expedia Inc, “Mission, Vision, Values”). The travel giant prioritizes innovation, strong acquired brands, and new channel penetration to enhance their product’s value proposition which should drive demand. Their biggest problem they are solving is the capitalization on the global paradigm shift between offline to online travel bookings. For both their business to consumer and business to business partnerships, EXPE asserts their primary appeal prospecting and current partners and customers is the “unmatched global audience of travelers, and [...] deep and broad selection of travel products…” (Expedia Inc, Form 10-K).

Stakeholders

Key stakeholders of EXPE are current business development partners, loyal customers, employees, competition, and the acquired brands within EXPE’s portfolio. First, the current business development partners are all the relationships EXPE has developed for their business to business model, being the centralized attention marketplace for other companies to gain prospective leads. Their biggest stakes would be financial performance, quality leads, brand exposure, and the comparative advantage over their competitors that are not on EXPE’s channels. Second, the loyal customers who started as either early technology adopters or early or late majority adopters who are now dependent on the convenience and efficiency of EXPE’s services. Their stakes would be time, money, quality trips, and even loss of business due to road blocks from planning issues in the absence of EXPE. Third, EXPE employees of 20,000 are dependent on EXPE to be a going concern for economic stability, financial dependence, and their individual professional careers (Expedia Inc, Form 10-K). Next, the competition are keenly aware and interested within EXPE for blockage of their own competition and ideas for innovation.  The enemy of the enemy is a friend. Lastly, the acquired brands within EXPE’s portfolio rely on EXPE for strategy development and growth. Being acquired means the two brands are a consolidated branch. With EXPE’s large size, the acquired brand could use the help.

        Two opposing stakeholders would be the employees of EXPE and the competition of EXPE. The employees need EXPE to grow and for their work to have an impact within the company. Although the EXPE competitors are concerned with EXPE for new product ideas and  to be a blockage for their own competition’s advancements, EXPE’s competition is more concerned with growing their own company. Therefore, if the competition were to surpass EXPE, the employees could potentially lose their jobs or the entire company.

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