The Auction for Travelport (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Auction for Travelport (A)
A senior Blackstone director is deciding how aggressively to bid for Travelport, a travel distribution business containing several key services and platforms. Travelport's most important properties were Galileo, one of the top 3 global distribution systems (GDSs), CheapTickets and Orbitz, two online travel agencies. Blackstone was competing in an auction against several other large private equity firms with multia??billion dollar investment funds. The auction was about to enter its final round of bidding, with bids having reached $4 billion in the prior round. The Blackstone director (Schorr) and his team have to make three key judgments regarding Travelport. First, they need to develop a point of view on the structural attractiveness of the travel GDS industry. Secondly, they need to decide whether Travelport was a good business to own and identify the key sources of its value. The Travelport business is composed of many different suba??businesses that play in different parts of the travel value chain and some of these suba??businesses are more strategic than others. Thirdly, like most leveraged buyouts, Travelport will need to support a significant amount of debt as a result of the transaction. Chip and his team need to make a judgment on the stability of Travelport's businesses and its ability to generate consistent, predictable cash flows to service its debt obligations.
Swot Analysis of "The Auction for Travelport (A)" written by Andrei Hagiu, Misha R. Sanwal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Travelport Blackstone facing as an external strategic factors. Some of the topics covered in The Auction for Travelport (A) case study are - Strategic Management Strategies, Entrepreneurial finance, Financial analysis, Financial markets, Growth strategy, Marketing, Mergers & acquisitions, Negotiations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Auction for Travelport (A) casestudy better are - – geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing energy prices, talent flight as more people leaving formal jobs,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of The Auction for Travelport (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Auction for Travelport (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Travelport Blackstone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Travelport Blackstone operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of The Auction for Travelport (A) can be done for the following purposes –
1. Strategic planning using facts provided in The Auction for Travelport (A) case study
2. Improving business portfolio management of Travelport Blackstone
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Travelport Blackstone
Strengths The Auction for Travelport (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Travelport Blackstone in The Auction for Travelport (A) Harvard Business Review case study are -
Successful track record of launching new products
– Travelport Blackstone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Travelport Blackstone has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Travelport Blackstone in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Strategy & Execution field
– Travelport Blackstone is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Travelport Blackstone in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Travelport Blackstone is one of the most innovative firm in sector. Manager in The Auction for Travelport (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Travelport Blackstone is present in almost all the verticals within the industry. This has provided firm in The Auction for Travelport (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Travelport Blackstone has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Auction for Travelport (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Travelport Blackstone has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The Auction for Travelport (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– The Auction for Travelport (A) firm has clearly differentiated products in the market place. This has enabled Travelport Blackstone to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Travelport Blackstone to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Travelport Blackstone is one of the leading recruiters in the industry. Managers in the The Auction for Travelport (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Travelport Blackstone has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Travelport Blackstone are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Travelport Blackstone is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses The Auction for Travelport (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Auction for Travelport (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Auction for Travelport (A), it seems that the employees of Travelport Blackstone don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Travelport Blackstone supply chain. Even after few cautionary changes mentioned in the HBR case study - The Auction for Travelport (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Travelport Blackstone vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Travelport Blackstone needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Andrei Hagiu, Misha R. Sanwal suggests that, Travelport Blackstone is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Travelport Blackstone is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Auction for Travelport (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Travelport Blackstone, firm in the HBR case study The Auction for Travelport (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Travelport Blackstone has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - The Auction for Travelport (A) should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study The Auction for Travelport (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case The Auction for Travelport (A) can leverage the sales team experience to cultivate customer relationships as Travelport Blackstone is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Travelport Blackstone has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Travelport Blackstone has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Travelport Blackstone products
– To increase the profitability and margins on the products, Travelport Blackstone needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities The Auction for Travelport (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The Auction for Travelport (A) are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Travelport Blackstone in the consumer business. Now Travelport Blackstone can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Travelport Blackstone can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Using analytics as competitive advantage
– Travelport Blackstone has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The Auction for Travelport (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Travelport Blackstone to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Travelport Blackstone can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Travelport Blackstone can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Travelport Blackstone can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Travelport Blackstone to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Travelport Blackstone to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Travelport Blackstone can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Travelport Blackstone can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Creating value in data economy
– The success of analytics program of Travelport Blackstone has opened avenues for new revenue streams for the organization in the industry. This can help Travelport Blackstone to build a more holistic ecosystem as suggested in the The Auction for Travelport (A) case study. Travelport Blackstone can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Travelport Blackstone is facing challenges because of the dominance of functional experts in the organization. The Auction for Travelport (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Travelport Blackstone to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Travelport Blackstone can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats The Auction for Travelport (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Auction for Travelport (A) are -
Environmental challenges
– Travelport Blackstone needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Travelport Blackstone can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Auction for Travelport (A), Travelport Blackstone may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Travelport Blackstone with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Travelport Blackstone is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Travelport Blackstone business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Travelport Blackstone can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study The Auction for Travelport (A) .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Travelport Blackstone in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Travelport Blackstone has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Travelport Blackstone needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Travelport Blackstone needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Travelport Blackstone
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Travelport Blackstone.
Consumer confidence and its impact on Travelport Blackstone demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of The Auction for Travelport (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The Auction for Travelport (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The Auction for Travelport (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The Auction for Travelport (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The Auction for Travelport (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Travelport Blackstone needs to make to build a sustainable competitive advantage.