Ctrip: Scientifically Managing Travel Services, Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ctrip: Scientifically Managing Travel Services, Chinese Version
Ctrip is a $437 million Chinese on-line travel services company with a scientific, data driven approach to management. The case explores Ctrip's founding and early growth, its expansion into multiple market segments including hotel reservations, air ticketing, leisure travel, and corporate travel, and the sources of its competitive advantage. The firm's culture, organization and call center operations are described in detail, as are its decision-making and business processes. At the end of the case, executives are considering whether Ctrip should actively pursue either the budget or luxury travel segments, which would mean shifting attention from the company's core customer base of Frequent Independent Travelers.
Swot Analysis of "Ctrip: Scientifically Managing Travel Services, Chinese Version" written by David A. Garvin, Nancy Hua Dai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ctrip Travel facing as an external strategic factors. Some of the topics covered in Ctrip: Scientifically Managing Travel Services, Chinese Version case study are - Strategic Management Strategies, Collaboration, Competition, Cross-cultural management, Data, Entrepreneurship, Growth strategy, Knowledge management, Leadership, Marketing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Ctrip: Scientifically Managing Travel Services, Chinese Version casestudy better are - – challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing commodity prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, there is backlash against globalization,
geopolitical disruptions, wage bills are increasing, etc
Introduction to SWOT Analysis of Ctrip: Scientifically Managing Travel Services, Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ctrip: Scientifically Managing Travel Services, Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ctrip Travel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ctrip 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 Ctrip: Scientifically Managing Travel Services, Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in Ctrip: Scientifically Managing Travel Services, Chinese Version case study
2. Improving business portfolio management of Ctrip Travel
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ctrip Travel
Strengths Ctrip: Scientifically Managing Travel Services, Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ctrip Travel in Ctrip: Scientifically Managing Travel Services, Chinese Version Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ctrip Travel 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.
Superior customer experience
– The customer experience strategy of Ctrip Travel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Ctrip 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 Ctrip: Scientifically Managing Travel Services, Chinese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Ctrip: Scientifically Managing Travel Services, Chinese Version 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.
Innovation driven organization
– Ctrip Travel is one of the most innovative firm in sector. Manager in Ctrip: Scientifically Managing Travel Services, Chinese Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Ctrip Travel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ctrip Travel 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.
Low bargaining power of suppliers
– Suppliers of Ctrip Travel in the sector have low bargaining power. Ctrip: Scientifically Managing Travel Services, Chinese Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ctrip Travel to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Ctrip Travel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ctrip Travel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Ctrip 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 Ctrip: Scientifically Managing Travel Services, Chinese Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Ctrip 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 Ctrip Travel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ctrip Travel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Leadership & Managing People field
– Ctrip 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 Ctrip Travel in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Ctrip: Scientifically Managing Travel Services, Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ctrip: Scientifically Managing Travel Services, Chinese Version are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ctrip: Scientifically Managing Travel Services, Chinese Version HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ctrip Travel has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ctrip Travel is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ctrip: Scientifically Managing Travel Services, Chinese Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Ctrip Travel products
– To increase the profitability and margins on the products, Ctrip Travel needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Ctrip Travel is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ctrip Travel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ctrip Travel to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Ctrip Travel 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.
High bargaining power of channel partners
– Because of the regulatory requirements, David A. Garvin, Nancy Hua Dai suggests that, Ctrip 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 cash cycle compare to competitors
Ctrip Travel has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ctrip: Scientifically Managing Travel Services, Chinese Version, it seems that the employees of Ctrip 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ctrip: Scientifically Managing Travel Services, Chinese Version, in the dynamic environment Ctrip Travel has struggled to respond to the nimble upstart competition. Ctrip Travel has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Ctrip Travel, firm in the HBR case study Ctrip: Scientifically Managing Travel Services, Chinese Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Ctrip Travel 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.
Opportunities Ctrip: Scientifically Managing Travel Services, Chinese Version | 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 Ctrip: Scientifically Managing Travel Services, Chinese Version are -
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. Ctrip Travel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Ctrip Travel can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Creating value in data economy
– The success of analytics program of Ctrip Travel has opened avenues for new revenue streams for the organization in the industry. This can help Ctrip Travel to build a more holistic ecosystem as suggested in the Ctrip: Scientifically Managing Travel Services, Chinese Version case study. Ctrip Travel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Ctrip Travel 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 Ctrip: Scientifically Managing Travel Services, Chinese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ctrip Travel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Ctrip 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.
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 Ctrip Travel in the consumer business. Now Ctrip Travel can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ctrip 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, Ctrip: Scientifically Managing Travel Services, Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ctrip 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 Ctrip Travel to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Ctrip Travel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ctrip: Scientifically Managing Travel Services, Chinese Version suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ctrip Travel can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Ctrip Travel can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ctrip Travel can use these opportunities to build new business models that can help the communities that Ctrip Travel operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Building a culture of innovation
– managers at Ctrip 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 Leadership & Managing People segment.
Manufacturing automation
– Ctrip Travel can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Threats Ctrip: Scientifically Managing Travel Services, Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ctrip: Scientifically Managing Travel Services, Chinese Version are -
Shortening product life cycle
– it is one of the major threat that Ctrip Travel is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ctrip Travel will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Ctrip 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ctrip Travel 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 Ctrip: Scientifically Managing Travel Services, Chinese Version .
Environmental challenges
– Ctrip 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. Ctrip Travel can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ctrip Travel.
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 Ctrip Travel business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ctrip Travel in the Leadership & Managing People industry. The Leadership & Managing People 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ctrip: Scientifically Managing Travel Services, Chinese Version, Ctrip 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 Leadership & Managing People .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ctrip Travel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Ctrip Travel has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ctrip Travel needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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. Ctrip Travel needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Ctrip Travel in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Ctrip: Scientifically Managing Travel Services, Chinese Version 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 Ctrip: Scientifically Managing Travel Services, Chinese Version 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 Ctrip: Scientifically Managing Travel Services, Chinese Version 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 Ctrip: Scientifically Managing Travel Services, Chinese Version 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 Ctrip: Scientifically Managing Travel Services, Chinese Version 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 Ctrip Travel needs to make to build a sustainable competitive advantage.