Management of Company

Expedia Inc. is one of the world's leading online travel agencies offering content and tools technology to help recreational and business travelers around the world. Via Expedia's range of travel brands, the company offers services to leading hotels, cruises, rental cars, packages, airlines and other global destinations. Expedia offers online travel services under various names, including Expedia Affiliate Network, Expedia.com, Orbitz Worldwide, Hotels.com, Home Away, Expedia Local Expert, Classic Vacations and Expedia CruiseShipCenters, among others. Expedia Inc. is headquartered in Bellevue, Washington, USA. The mission statement for Expedia is to Revolutionize Travel through the Power of Technology. In this regard, Expedia aims at owning and powering the best travel brands across the globe by ensuring that these brands are innovative, fast and independent. Expedia’s vision is to make these brands relentlessly focus on the strategies that drive value for their global customers. Expedia, therefore, remains aggressive so as to effectively compete with its competitors through customer loyalty, channel penetration, product innovation as well as global expansion. Expedia’s overall success is determined by their ambition to be different. Expedia seeks new ideas, diverse approaches, and backgrounds as well as different ways of thinking since they believe averages can lie while sameness is dangerous in their industry. Their company’s rules and norms aren’t rigid or universal at all corners of their businesses, but they evolve and vary so as to represent their identity in various parts of the world. All stakeholders including employees and customers are respected and treated with dignity. Expedia leads humbly since their leaders serve their teams.

The leaders believe that they do not have all the answers and are therefore always looking for opportunities to learn. This company also is transparent as the leaders communicate openly and honestly with their employees, customers, and the managerial officer so that actions can be implemented fast. Expedia also organizes for speed as they seek to gather information as soon as possible so as to move on. According to this company, speed allows them to make mistakes and learn. This corporation believes in the scientific method and that everyone’s ideas are equally important in the face of hard data. They use data to guide their actions but not to define them. Lastly, Expedia Inc. acts as one team as they look for opportunities to optimize their success and are also interested in the success of others. All these strategies explain the success of Expedia as the leading travel corporation in the world.

Expedia’s Inc. Porter’s Five Force Analysis

Various forces that influence decision making in any given corporation remain an integral part of strategic management and planning. The Porter’s Five Force Model is one of the greatest and most valuable market analysis tools used by various industries and organizations across the world. This market tool examines different internal and external factors that inform on how a business can be more profitable and maintain a competitive advantage over its competitors. The Porter’s Five Force Analysis tool uses five significant forces including bargaining power of suppliers, the threat of substitute, bargaining power of buyers, and the threat of new entrants and intensity of competitive rivalry.

(i) Intensity of competitive rivalry

This tool examines the degree of competition that a company faces from other organizations in the same industry. When competition is extremely high in the Travel and Hospitality industry profit margins are bound to reduce. Expedia’s competition is intense and increasing and includes both offline and online travel organizations that target both corporate and leisure travelers. Competitors also include tour operators, consolidators, and wholesalers, several travel meta-engines, as well as travel supplier direct websites. Travel company such as Expedia also face stiff competition from companies such as Priceline (PCLN) which generates a revenue of about $39.2 billion, Carlson Wagonlit Travel at $26.9 billion, American Express Global Business Travel at $30.3 billion, BCD Travel, HRG North America and FC USA.

(ii) The threat of substitute

The threat of substitution occurs when other organizations in the industry offer alternative services or better performance parameters within a given industry. Priceline plays a great role in this area since it adopts similar strategies to Expedia and also provides affordable services and maintains high standards. Priceline, as well as American Express Global Business Travel, attract a significant number of customers thus lowering the potential sales for Expedia Inc.

(iii) The buyers bargaining power

This tool is highly influenced by the concentration of clients in the industry. This force may not profoundly impact the Travel Industry since the loss of a few customers may not affect any of it many brands that other travel services. However, Expedia ought to very careful while dealing with their clients especially because its services are through the internet. If two or three unsatisfied customer leaves damaging comments on social media sites, it may adversely affect the company. The main buyers for various Expedia brands include real estate suppliers as well as labor providers, travel agents, infrastructure suppliers in real estate as well as decoration suppliers.

(v) Threat of entry

The threat of entry is determined by the level of competition in the industry. This treat is insignificant to Expedia since it has a strong brand had is established globally. Expedia thus uses its name to attract scores of customers as well as a ground negotiations ground for mergers.

SWOT analysis

(i) Strengths

Expedia offers a wide range of hospitality services as well as travel offerings. Expedia offers accommodation services, rental cars, cruises, destination activities as well as hotel services among others. Expedia also has a strong portfolio of travel brands. It also has a strong brand name which is coupled with exceptional customer loyalty. Expedia has more than 10,000 partners for various cruises, airlines, hotels, and destinations among others. Expedia also has established a strong global market space and presence thus lowering the risks in revenue growth (Lee, Guillet, & Law, 2013). In this regard, the company has agents and stations in over 60 countries. Additionally, this company has over 15,000 employees employed to work in various brands. The acquisition of small companies such as Orbitz has also strengthened Expedia’s position.

(ii) Weaknesses

Expedia has limited profit margins and slow market share growth because it faces stiff competition from other companies such as MakeMyTrip, Priceline Group, Yatra, Ibibi, HotelQuickly as well as Bookit.com. In most cases, Expedia provides undifferentiated services compared to its competitors though they believe that sameness is dangerous in their cultural norms. Lastly, Expedia relies heavily upon travel suppliers and intermediaries which make their profit margins lower.

(iii) Opportunities

Expedia can form partnerships across the world because the number of online bookings is increasing as many people continue to become digitalized (Lee, Moon, Lee, &Kerstetter, 2015). Expedia, through its offline services, has been able to retain and gain more customers who are still reluctant to use the internet for their business transactions and prefer old methods of booking. Additionally, due to the international aspect of the hospitality industry, corporations such as Expedia have the opportunity to expand their business to as many countries as they wish. Today, hotels can provide a variety of dishes since different cultures, and people from different origins can be found in a single nation. Moreover, the Expedia has numerous opportunities because global interactions have increased and various individuals travel the world for business or holidays

(iv) Threats

Different threats make the travel industry unattractive. These include economic slowdowns, terrorism, environmental concerns and an increase in fuel prices. The current acts of terrorism in the United States such as the 2013 Boston bombings have led to a reduction of tourists while the current economic slowdown caused by China’s economic transition to capitalism has made brands such as Expedia to slow down since their portfolio is weighted towards travel and luxury. Additionally, the Travel and Hospitality industry is overly competitive with both global and local players. Expedia also experiences weak internet penetration, especially in underdeveloped and developing countries. This hampers most operations and booking services in such countries.

In 2015 when Expedia acquired Orbitz and Travelocity, it became the leading travel company in the U.S and across the globe. This made a huge difference between Priceline Group whose revenue stands at around $39 billion and Expedia’s which stands at around $69 Billion. This shows that if Expedia were to acquire two more travel companies and especially in developing companies such as in Brazil and Thailand as well as invest heavily in Europe and China, then it would not worry about competition from any other company (Long, 2015). Acquisitions of various travel airlines in such countries will create more openings for various Expedia’s brands. Customers who travel through their airlines can use their rental cars, destination services as well as accommodation in their hotels worldwide (Lee, Guillet, & Law, 2013). Another strategic improvement should involve the quality of services that Expedia offers. An important aspect of the point to note is that the quality of different services offered in the hospitality industry can be defined as a composite measure of various attributes. The quality of a service does not only include tangible characteristics but also the intangible or subjective attributes such as comfort, safety, and quietness which highly varies from one person to another and are impossible to measure accurately. Research shows that customers prefer corporations that put their customer’s need for satisfaction at the forefront of their operations. By so doing, Expedia will thwart any unnecessary competitions and overcome the fact that it heavily relies on the U.S traveling customers.

Expedia can use various strategies such as the pricing strategy, Promotion strategy as well as a distribution strategy. By enacting a pricing strategy, Expedia can lower their prices during summers and winters so as to attract more customers compared to their rivals. A reduction of as less as one dollar is very significant to customers as most of them aim at using the lowest prices available. A promotion strategy would be very effective especially during summers since most people are taking vacations. A promotion strategy would attract these customers who are more likely to become lifetime customers for Expedia. Lastly, Expedia ought to offer their services in every destination where their customers arrive. Accommodation and hotel services would be very significant since customers are sure that upon arrival, they will find a safe place to spend their day or night while undertaking their business (Mariani, Buhalis, Czakon, and Vitouladiti, 2016).

A top-down communication plan would be more effective. The board of directors should ensure that extensive research is carried out in various tourist destinations so as to ensure the safety of their customers. The research will also help Expedia to identify and exploit any market niche that has been unidentified or ignored by other travel companies in the various countries. The board of directors would then use this research to make various strategic decisions regarding the success of their corporation in various countries and the necessary actions that should be implemented. Meetings should be held to inform concerned stakeholders regarding the pricing strategies as well as the other strategies so that all of them are in agreement. Stakeholders should be guided on how to implement various actions in their assigned areas of specialization.

The Board of Directors of the company sets very high standards for its employees, directors, and officers. It is the duty of its board members to ensure that every member serves as prudent fiduciary as well as oversee the management of all activities. To fulfill their fiduciary duties, the Board of Directors follows various procedures and standards that are set in various governance documents an example being the Code of Business Conduct and Ethics for Directors and Senior Financial Officers and the Code of Business Conduct and Ethics. The Audit Committee, for instance, provides assistance to the Board by ensuring that all shareholders financial reports are well handled and that financial statements are accurate and up to date. According to the Code of Business Conduct and Ethics, all employees, directors, and officers within Expedia are collectively responsible for managing the company

The current President and Chief Executive Officer of Expedia Inc. go by the name DaraKhosrowshahi. Under his leadership, Expedia operates over 150 travel booking sites in about 70 countries globally. Before being CEO, Khosrowshahi was the president of the Brand Expedia Business and was the overseer of all operations and strategies of Expedia brand globally. Others who serve under him include Barry Diller who is the Chairman and senior executive, Victor Kaufman as the Vice Chair, Mark Okerstom as Chief Financial Officer and Executive Vice President Operations and Robert Dzielak as the Executive Vice President, General Counsel, and Secretary. Women are highly underrepresented in this company as there is only Nikki Krishnamurthy and ArianeGorin as Chief People Officer, Expedia Inc. and Senior Vice President and General Manager, Expedia Affiliate Network respectively. One recommendation is that the company should enhance gender balance as well as employ people of color as board members so as to attract more qualified employees.

In today’s world, corporate social responsibility is an obligation to every organization that wishes to undo the social as well as the environmental problems that the world is facing today. Companies that put short-term profits in the forefront or try to make more profit by failing to handle the toxic substances they release into the environment are seen as unprofessional and are a risk of damaging their brand’s reputation (Graham 2009). According to Expedia’s director, the company’s Corporate Social Responsibility salaries are about $152, 585-167,555. In 2012 for instance, all employees in Expedia railed together the Expedia’s inaugural Global Day of caring. All company employees were encouraged to lead a hand to other deserving organizations. In a single day, more than 2,000 Expedia employees are involved in charitable works in their communities.

References

Graham R. M, (2009). Product evolution: a Darwinian or Lamarckian phenomenon? Journal of Product & Brand Management, Vol. 8 Iss: 4, pp.301 – 31

Lee, H. A., DenizciGuillet, B., & Law, R. (2013). An examination of the relationship between online travel agents and hotels: A case study of Choice Hotels International and Expedia. com. Cornell Hospitality Quarterly, 54(1), 95-107.

Lee, W. S., Moon, J., Lee, S., &Kerstetter, D. (2015).Determinants of systematic risk in the online travel agency industry. Tourism Economics, 21(2), 341-355.

Long, H. (2015). Geographic Relevance for Travel Search: The 2014-2015 Harvey Mudd College Clinic Project for Expedia, Inc.

Mariani, M.M., Buhalis, D., Czakon, W. and Vitouladiti, (2016). Tourism Management, Marketing, and Development: Performance, Strategies, and Sustainability. Springer.