Trip Advisor

Brief Overview – The scaling and expansion challenge

Although TripAdvisor (TA) has seen a steady and extremely fast growth in the past ten years, it

now faces the challenge of continuing to grow and expand sustainably in the extremely

competitive consumer travel market.

In order to achieve these goals, Stephen Kaufer, TA’s founder and CEO is presented with three

main possibilities: international expansion, mainly to china, vacation rentals and flights service.

Each of these alternatives poses particular challenges and offers interesting opportunities, and

the key to success will be to prioritize these options to optimize the company’s resource

allocation.

Assessing the problem

In order to better evaluate the different options, Kaufer should base his analysis on

the following steps:

i) revise the positioning and context of TA, by considering the 5Cs

analysis;

ii) perform a SWOT analysis;

iii) perform Porter’s five forces analysis;

iv) review and evaluate each of the alternatives to design the best possible action plan that will

allow the company to reach enduring and sustainable growth.

Company:

TA has become, in the last ten years, the world’s most popular and largest travel community,

and in particular it is recognized to offer unbiased, peer reviewed advice from real travellers

about hotels, restaurants and other attractions. The firm has experienced fast growth of

reviews and opinions contributors as well as unique visitors which ultimately led to a steady

growth on revenues over the years.

As part of an initial expansion plan, the company has start offering a flight metasearch service,

acquired several companies in order to enter the fragmented vacation rental market and

expanded by creating several international branches in other countries as well as creating TA

sites in the local languages.

The company generates revenues by charging for its users’ clicks in each text links to online

travel agencies, the advertising displayed in their website and by listing contact information of

tourism business like hotels and restaurants.

Costumers:

TA has two main types of costumers: The travel consumers and the travel/tourism business

owners.

The fast growing market of online travel/tourism consumers use TA services in search for

recommendations in which to base their choices both of travel destinations and of

accommodations. The costumers leave reviews both to express their opinion and as a mean to

reach the establishments management. The typical travel consumer is price sensitive and so

searches the internet seeking lower fares between online tourist agencies, carriers’ websites

and metasearch sites.

The business owners use TA to increase their visibility and expand potential customer base.

While the consumers search for reviews and are majorly concerned about the feedback trends

regarding some places, the business owners are wary of the potential of the feedback system to

hurt their reputation