Strategic Management Report: Analyzing TripAdvisor's Strategy

This report provides a comprehensive strategic analysis of TripAdvisor, an American travel website company. It begins with an executive summary and outlines the company's corporate objectives, emphasizing its role as a global travel platform. The report then delves into external analysis, including a PESTLE analysis that examines political, economic, social, technological, legal, and environmental factors influencing TripAdvisor's operations. Competitive analysis is conducted using Porter's Five Forces to assess the competitive landscape. The internal analysis involves a resource audit, identifying both basic and unique resources, and an examination of the company's functional capabilities and core competencies, including benchmarking. The report then explores TripAdvisor's competitive strategy, utilizing Bowman's Strategy Clock and David Faulkner's strategy clock model. Strategic choices are evaluated using the Ansoff Matrix model to determine market growth strategies. Finally, the report concludes with a strategic evaluation, assessing the suitability of the chosen strategies and providing recommendations for future development. This analysis provides valuable insights into TripAdvisor's strategic management and its approach to achieving its objectives in the competitive travel industry.

STRATEGIC
MANAGEMENT

Table of Contents
Executive summary..........................................................................................................................1
Corporate objectives...............................................................................................................1
External Analysis.............................................................................................................................1
AC 3.1 Macro Economic Analysis:........................................................................................1
AC 3.2 Competitive Analysis.................................................................................................2
Internal Analysis..............................................................................................................................3
AC 4.1 Resource Audit...........................................................................................................3
AC 4.2 Function of the business and core competencies.......................................................3
5) Basis of competitive strategy.............................................................................................4
6) Strategic choice..................................................................................................................5
7) Strategic evaluation............................................................................................................6
8) Conclusion and Recommendation......................................................................................6

Executive summary
Every organization has some specified objectives and goals. Therefore, all the operating
activities are done in order to achieve these targets. This report helps us in identifying the
objectives of the TripAdvisor company. It is an American travel website company providing
travel related services to the customers. Internal and external analysis also has taken place for the
company. On the other hand, competitive strategy also will be examine for the selected
organizations. Furthermore, Pestle analysis, resource audit and has been done to
Corporate objectives
TripAdvisor company is an American travel website company that provides all travel
related content to the consumers. TripAdvisor was established in February, 2000 and
headquartered in Needham, Massachusetts, United status. TripAdvisor LLC is the parent
company of it. The company operates in 47 countries and in 28 languages including sites over
the world. The company provide services regarding hotel and flight bookings, Vacation rentals,
restaurant findings and travel guidance to the passengers. It is the largest travel site in the world
as operates at global distance. The website of the company are free for all the consumers that
provide all the travel related content to them. The mission of the company is to help people
around the world and give them a perfect trip. However, the strategic objective of the company is
to create an effective media platform, definitive source for the travelers and critical partner for
merchant. Moreover, the company generates an powerful network effects to fulfill its objectives.
On contrary, the financial objective of the company is to financial strengthen of the business on
an regular basis. For fulfilling all the objectives company is compelling and differentiated its
business models and investing huge amount in its facilities. Furthermore, the company is get
benefited from the market opportunities in order to ensure business growth. This in turn, helps to
ensure business sustainability and business development for the long term period.
External Analysis
AC 3.1 Macro Economic Analysis:
It can be done through pestle analysis including all the external factors that cannot be
controlled by the company.
1 | P a g e

Political factors: TripAdvisor Political environment impact the company to a great
extent. If the US government decrease its tax rates then more income will be available to the
customers. Therefore, it impact the company in positive direction due to higher the demands.
This in turn, the business revenue and profitability get decreased.
Economic factors: It consists of US fiscal and monetary policies. TripAdvsior company
needs to conduct an economic analysis in order to consider the interest rates, Gross domestic
product, inflation rate and employment rates. Currently, the US market follows low and
moderate interest rates. Therefore, higher disposable income is available to the customers for
spending results in higher the product demand for the company.
Social Factors: TripAdvisor company is operating in 47 countries over the world.
Therefore, it become necessary for the company to identify the customer lifestyle, purchasing
power, their buying behavior and their culture. Under the social factors, company's website
contain all the details in 28 languages.
Technological factors: Technology also plays an major role in the TripAdvsior company
success. It also helps to compete effectively in the market. For this purpose TripAdvisor
company is investing a huge amount in its websites. Moreover for making technological
improvement the company uses a powerful network helps to create an efficient cost structure.
Most Innovative Travel App or Innovative technology award is also given to the company for
using best technology.
Legal Factors: TripAdvisor company operates in distinct part of the world. Therefore, it
become necessary that the company has to follow legal rules and regulations of the respective
countries in which the company is operating. They have to take license for purchasing the
software by paying their licensing fees.
Environmental factors: TripAdvisor company is launching GreanLeader programme in
US, giving hotels to get recognition by their green practices. Moreover, it developed the
partnership with the carbon trust so as to ensure environment protection.
AC 3.2 Competitive Analysis
Trivago, HotelScompare, Hotelscombined, Makemytrip and Expedia are the competitors of
TripAdvisor. The competitive analysis for TripAdvisor can be done through identifying the
Michel Porters five forces.

Bargaining power of customers: Customers are the profit sources for both the
organizations. Therefore, the bargaining power of consumers has a great impact on the business.
The website information and online catalogues create strong customer base for TripAdvisor
company helps to competitively strong in the market.
Threat of new entrants: The entries of new travel website companies also influenced the
company. The high amount of profit earning industry attracts new entrants. In order to eliminate
such impacts the company has to expand its business operations in the market.
Competitive Rivalry: The level of competition greatly impacts TripAdvisor company.
The company gained competitive advantages over the competitors through providing good
quality products and services to the consumers.
Bargaining power of Suppliers: High bargaining power of supplier impacted thecompany
negatively. TripAdvisor company set quality standards for the suppliers for that purpose.
Threats of substitute products: Available substitute products may cause the reduction in
sales for the company in FY. TripAdvisor company is rying to branding the products and
services that helps to create product differentiation from their competitors in order to eliminate
this risk involved (Wheelen and Hunger, 2011).
Internal Analysis
AC 4.1 Resource Audit
It identifies the available resources to the business organizations and untied it in a best manner.
There are two type of resources include basic and unique resource. Basic resources are required
in all the organization while the need of unique resources tend to vary according to the type of
industry. As basic sources, TripAdvvisor company needs human resources and financial
resources. Human resources comprise many individuals with different skills and knowledge that
undertakes different activities and tasks in the organization (Freeman, 2010). Moreover, it also
needs for distinct operational purpose. For instance, for making payments to the staff salary,
licensing fees and others. However, capital expenditures needs to acquire the plant and
machinery, building and investments. On contrary, the unique resources are required for
purchasing the software, network purchase and website development. In the resource audit
process, TripAdvisor company determine strengths and weaknesses for each resource. Then after
identify the unique or significant resources where cost can be minimized in order to maximize its
profit potentials. The company launched workday financial and human capital management so as

to manage their financial as well as human resources very effectively. The company get many
advantages from this program. It improved the employee performance and engagement through
reduced training and support cost. It is done through designing its user interface so the
employees are able to learn the new system, easily access, manage and input essential
information. It faster the report access so the business performance can be analyzed very quickly.
It accommodate the new business requirement that rely on IT support services. Another, the
Workday human capital management offers greater access to all the workforce. It helps to
analyze the employee skills, knowledge and their experience, workforce cost and their overall
performance. Moreover, In GreenLeader programme the company is following the rules very
strictly and punish the hotels through penalties in case of any default.
AC 4.2 Function of the business and core competencies
Functional classification helps to identify the capabilities for each and every function. The
main functions can be classified into marketing, human resource management, product design,
research and development, business operations, management information system and sales and
distribution functions. However, core competency analysis undertakes to determine those
capabilities that help to make competitive advantages. TripAdvisor can evaluate core
competencies for customer needs, uniqueness, flexibility, value and sustainability. Flexibility
helps to adopt the changes with changing the market conditions. However, better business
performance ensures sustainability for longer period. TripAdvisor core competencies determine
its ability to produce variety of quality products for strengthen the business performance
(BurgeSmani and Wheelwright, 2004). Benchmarking is a significant tool for improving the
organization capabilities. Through this method the company can identify the capability that
requires any improvement with making comparison with the competitors. Then after,
organization can take necessary steps to enhance the performance. This in turn, the organization
will be able to achieve the business targets or goals.
5) Basis of competitive strategy
Bowman's Strategy Clock and David faulkner's strategy clock model is used by the
company in order to analyses the competitive position of the company (Hill, Jones and Schilling,
2014). This strategy clock represents eight different strategies in four quadrants. Eight strategies
are as follows:-

1. Move west- This strategy reduces the cost of the price and at the same time provide
advantage to the company to beat its competitors.
2. Move north- This strategy says company should increase the perception of customer
value by using various promotional methods and making the marketing communication
effective.
3. Move east- This strategy increase the cost of the product which in turn creates the
competitive disadvantage for the company.
4. Move south- This strategy reduces the value of customer.
5. Move south west- this method says that company can increase its market growth by
reducing price and value of the product.
6. Move north east- This method says that by increasing prices and value of the product
company can increase its market growth.
7. Move south east- This method say that company can improve its position by increasing
the value and reducing the prices of the product (Wheelen and Hunger, 2011).
8. Move north west- This method suggest that by reducing the value and increasing the
price of the product company can improve its competitive position.
Taking into consideration the various factors like demographics, income, lifestyle factors
TripAdvisor company can segment larger market area where large number of young age people
is present. This in turn will aid the company to increase its sales by beating its competitors.
TripAdvisor company attain position of south east method and move west so as to sustain the
competitive advantage and meet customer needs.
6) Strategic choice
Ansoff Matrix model was invented for the purpose of finding the companies market
growth. This model is also known as Ansoff product and market growth matrix (Tajima, 2007).
There are four stages in this model that are described below;

Market penetration- In market penetration Strategy Company tries to expand its
business by simply increasing the sales of the company's existing products in the existing market
(Zentes, Morschett and Schramm-Klein, 2007).
Product development - Product development strategy is used by the company who want
to expand its business by introducing new product and services in the existing market.
Market development- This strategy is used by the company who want to flourish its
business by introducing the existing product in the new markets. Therefore, company can use
this method in order to easily expanding its business are differentiate the customer segments,
foreign market.
Diversification- In case of this TripAdvisor can expands its business by introducing the
new product in the new markets. It is the most risky strategy (Richard, Wilson and Gilligan,
2005).
The TripAdvisor company is already a leading travel website company. The company is
able to take higher the risk for making development. Therefore market development will be
considered as the best method through which company can avail services in new markets through
introducing the existed products.
7) Strategic evaluation
TripAdvisor company can critically analyses its market growth by using various tools. It
can be done on the following basis:

Suitability: - The standard of this strategy can be measured by seeing that how closer is
company towards the achievement of organization long run objective. Thus, formulated strategy
meets the suitability standards which in turn aid the company to expand its profit margin in the
long term perspectives. In context to TripAdvisor company it got many awards such as most
innovative Travel App Award, Webby People's Voice Awards, Innovative technology of the year
and BestApp/Website for Booking your stay award in the year 2015 in US.
Feasibility: - The level of Feasibility indicates the amount of resources available with the
company in order to achieve the long term objective of the company. Feasibility indicates the
utilization of resources within the organization in order to undertake the various strategies.
TripAdvisor company ensure maximum utilization of their resources through implementing an
Workday programme.
Acceptability: - Acceptability standards involve the anticipation of different
stakeholders. In simple words, it can be said that level of successful implementation of the
strategy depends upon the satisfaction level of various stakeholders. TripAdvisor company is
getting higher the profitability helps to increase satisfaction level of their stakeholders.
8) Conclusion and Recommendation
Conclusion: The following report emphasis on financial and strategic objectives of the
company. In this report various internal and external factors are also analyzed considering the
PESTLE and Porter's analysis and resource audit process. On the basis of above report, it can be
concluded that effective analysis of the market helps the organization to reduce its negative
impacts on the company. This in turn, the organization can compete effectively at the market
place.
Recommendation: From the above report the strength, weakness, opportunity and threats can be
identified for the company. The international presence, large number of customers, customer
retention through using Just For You feature and acquisition of Strong brands are the strength of
TripAdvisor company. However, the weaknesses is theft of email addresses from database create
insecurity for the customers. Through acquisition of the other strong brands help the company to
expand its portfolio. This in turn, results in expanding the tourism worldwide. However, some
online travel ports that are Make My trip and Yatra take away the market share in India. Further,
combo packages that combines the flight plus hotel offers through various portals is also a big
threat for the company. Therefore, from the above analysis it can be recommended that company

has to remove its weakness and threats. It can be done through create a better network security
for the users. Moreover, it become advisable that company has to use the available opportunities
so as to expand its business portfolio. This will helps to ensure better future growth and long run
survival of the company.

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