Case Study Description of TripIt: The Traveler's Agent
In July 2008, the co-founders of TripIt, a free online travel organizer that aggregated travelers' bookings from many top travel Websites, had recently secured $5.1 million in new financing. While the co-founders believed that their company offered travelers a unique service, they felt growing pressure from investors to show that the company could grow revenues and achieve profitability. To be profitable, TripIt needed not only to grow its user base but also generate more traveler itineraries, which was critical to obtaining advertising revenue from travel suppliers and intermediaries. The online travel industry was a hyper-active industry and while TripIt was breaking new ground, the threat of competitors was very real.
Authors :: Lynda M. Applegate, Gabriele Piccoli, Kathryn Brohman
Swot Analysis of "TripIt: The Traveler's Agent" written by Lynda M. Applegate, Gabriele Piccoli, Kathryn Brohman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tripit Travel facing as an external strategic factors. Some of the topics covered in TripIt: The Traveler's Agent case study are - Strategic Management Strategies, Entrepreneurial management, Financial management, Growth strategy, Innovation, Internet, Strategic planning and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the TripIt: The Traveler's Agent casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings,
there is backlash against globalization, wage bills are increasing, etc
Introduction to SWOT Analysis of TripIt: The Traveler's Agent
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TripIt: The Traveler's Agent case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tripit Travel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tripit Travel 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 TripIt: The Traveler's Agent can be done for the following purposes –
1. Strategic planning using facts provided in TripIt: The Traveler's Agent case study
2. Improving business portfolio management of Tripit Travel
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tripit Travel
Strengths TripIt: The Traveler's Agent | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tripit Travel in TripIt: The Traveler's Agent Harvard Business Review case study are -
Training and development
– Tripit Travel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in TripIt: The Traveler's Agent 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.
High brand equity
– Tripit Travel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tripit Travel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Tripit Travel is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Lynda M. Applegate, Gabriele Piccoli, Kathryn Brohman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Tripit Travel in the sector have low bargaining power. TripIt: The Traveler's Agent has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tripit Travel to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Tripit Travel 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.
Superior customer experience
– The customer experience strategy of Tripit Travel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Tripit Travel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Tripit Travel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tripit Travel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Tripit Travel has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study TripIt: The Traveler's Agent - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Tripit Travel 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 TripIt: The Traveler's Agent HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the TripIt: The Traveler's Agent Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Innovation & Entrepreneurship field
– Tripit Travel 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 Tripit Travel in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses TripIt: The Traveler's Agent | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TripIt: The Traveler's Agent are -
Aligning sales with marketing
– It come across in the case study TripIt: The Traveler's Agent 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 TripIt: The Traveler's Agent can leverage the sales team experience to cultivate customer relationships as Tripit Travel is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As TripIt: The Traveler's Agent HBR case study mentions - Tripit Travel takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Tripit Travel products
– To increase the profitability and margins on the products, Tripit Travel needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Tripit Travel 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study TripIt: The Traveler's Agent, it seems that the employees of Tripit Travel 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.
Capital Spending Reduction
– Even during the low interest decade, Tripit Travel has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Tripit Travel, firm in the HBR case study TripIt: The Traveler's Agent needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study TripIt: The Traveler's Agent, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Tripit Travel is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Tripit Travel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tripit Travel to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynda M. Applegate, Gabriele Piccoli, Kathryn Brohman suggests that, Tripit Travel 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.
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 Tripit Travel supply chain. Even after few cautionary changes mentioned in the HBR case study - TripIt: The Traveler's Agent, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tripit Travel vulnerable to further global disruptions in South East Asia.
Opportunities TripIt: The Traveler's Agent | 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 TripIt: The Traveler's Agent are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tripit Travel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Tripit Travel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Tripit Travel to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Tripit Travel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tripit Travel 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.
Loyalty marketing
– Tripit Travel has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tripit Travel can use these opportunities to build new business models that can help the communities that Tripit Travel operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tripit Travel 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 Tripit Travel to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Tripit Travel 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 Innovation & Entrepreneurship segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tripit Travel can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, TripIt: The Traveler's Agent, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tripit Travel is facing challenges because of the dominance of functional experts in the organization. TripIt: The Traveler's Agent 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 Tripit Travel 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.
Better consumer reach
– The expansion of the 5G network will help Tripit Travel to increase its market reach. Tripit Travel will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats TripIt: The Traveler's Agent External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TripIt: The Traveler's Agent are -
Consumer confidence and its impact on Tripit Travel 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TripIt: The Traveler's Agent, Tripit Travel may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tripit Travel in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
Shortening product life cycle
– it is one of the major threat that Tripit Travel is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Tripit Travel needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Tripit Travel high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tripit Travel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Tripit Travel 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. Tripit Travel can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tripit Travel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Tripit Travel can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Regulatory challenges
– Tripit Travel needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
Weighted SWOT Analysis of TripIt: The Traveler's Agent 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 TripIt: The Traveler's Agent 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 TripIt: The Traveler's Agent 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 TripIt: The Traveler's Agent 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 TripIt: The Traveler's Agent 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 Tripit Travel needs to make to build a sustainable competitive advantage.