Essay Title: 

Case Analyses – Strategic Managment – Hostelworld.com

March 24, 2016 | Author: | Posted in management, mathematics and economics

Hostelworld .com

Industry Analysis

The sector where Hostelworld operates is called budget , youth independent travel (BYIT . As a part of travel segment , BYIT is gradually changing , and nowadays appears to be an attractive market . It is caused by the following main reasons

Youth all over the world are becoming more and more active seeking efficient and affordable places to stay for vacation . It means that the number of potential customers in BYIT segment is constantly growing

Many general travel agencies overlook the opportunities to cease in this segment , considering it [banner_entry_middle]

to be low profitable because of low commissions and margins

Thus , the direct competition in the industry is quite low . In fact Hostelworld .com being a part of WRI (Web Reservations International represents a major BYIT site providing visitors with many services from simple place booking to various information services . Therefore , it is possible to say that BYIT industry based on IT quick services (namely Internet reservations etc ) is still developing and is dominated currently by WRI . However , the interest to the segment will rise and thus the competition will intensify . Moreover , low entrance barriers will make the segment for newcomers even more attractive

Competition Analysis

There are two main competitors : Expedia and Travelocity

Expedia : Provides travel and leisure services for wide range of customers of different ages and status – students , businessmen , family trips , corporate trips etc . Company ‘s main brands include Expedia .com Hotels .com , Hotwire .com , Worldwide Travel Exchange and Interactive Affiliate Network , Classic Vacations . The main product line includes

airline tickets

hotel reservations

car rental

cruises

Expedia ‘s revenue in 2005 was 2 .17B with profit margin of 10 ,41 Its current ration is 0 ,562 indicating that current assets compose 56 of its current liabilities , which is a pretty good indicator HYPERLINK “http /www .yahoo .finance .com ” www .yahoo .finance .com

Expedia ‘s main competitive advantage is a wide range of products and services provided

Travelocity : Travelocity is a subsidiary of Sabre Holdings – leading reservation system supplier . Travelocity .com provides travel and leisure services for business and individual travelers . Its product line includes airline tickets , hotel reservations , car rentals , vacation packages . Its main brands are Lastminute .com , Online Travel Corporation Travelstore .com . Travelocity is headquartered in Southlake , TX

Travelocity ended fiscal year of 2005 with its annual revenue of 829 .9 M ( HYPERLINK “http /www .yahoo .finance .com www .yahoo .finance .com

The main competitive advantage of the company is its quick and reliable online services , which are greatly customized and have serious protection . Therefore , customers worldwide have substantial confidence in the company and are not afraid to use its computerized services

SWOT Analysis

Strong

Wide network and substantial coverage

Pioneer in on-line hostell reservation services

Devoted team of professionals , who are the main asset of the company

Lowest commission levels

Concern over the best quality for customer as a philosophy of the company

Narrow specialization , which provides specific improved service focused on the current need of the customer . Thus , the core competence of the company… [banner_entry_footer]

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