The company OPODO is an online travel agency. In order to be more efficient a company must know its environment whether this is in the online or offline world. It is a step very important to do because it permits the company where are its strengths and opportunities on the market and try to overcome the difficulties and be the best.
In this way, we will analyse theexternal environment of the company OPODO, to do so we will use an external analysis and the Michael Porter 5 forces analysis.
The number of travellers increases whereas the number of travel agencies decreases as many people are choosing direct online booking instead of the brick and mortars shops. This new way of buying travel is easier and more convenient for the consumers because theycan have all the travel planning options and discounts that they can receive with conventional agencies without leaving their homes. Therefore, more than 75% of all travellers now use the Internet for at least some portion of their travel planning. Though the trend is heading upward, a substantial portion of figurative window-shoppers are not completing their bookings. As a result, many onlinetravel agencies are still leaving money on the table
On the other hand, the emergence of the internet as a widely available information and booking tool shaped the travel industry. Indeed most corporate travel agencies provide their clients with their own branded online booking tool and more and more travel agencies exist only online.
In this way, travel is currently the largest e-commercecategory on the Internet representing around one third of total online transactions.
Nowadays to touch and attract more people, online travel agencies, eager to expand their on international markets where travellers are not yet accustomed to booking trips online.
Opportunities: The reliance that consumers have on travel Web sites has not weakenedone bit," says Carroll Rheem, director of research at PhoCusWright. "Consumers are certainly spending less, but they are not giving up travel, nor are they turning away from the Web sites that offer them the selection and convenience they value." http://www.dailyfinance.com/2009/09/28/online-travel-business-sees-traffic-and-conversion-bumps/
Threats: Many people prefer face-to-faceinteraction and would never even dream about using a travel website to book their travel plans. A lot of people still want to have services and deal with an agent. For this reason they are getting away from the Internet because they don’t know if they are getting the best deal.
Opportunities: OPODO is the European leader in the online travellingThreats: There are more and more competitors in this sector. Indeed as more people are purchasing their travel online, most of the companies which exist offline offers also to their consumers the possibility to buy online.
The major players in the online travel agencies are American Express Company, Carlson Companies Inc (deals principally with hotels booking), Expedia Inc (43% of the market sharein this sector in US), Travelport.
Opportunities: The continual development and improvement of Internet.
Michael Porter 5 forces analysis
Rivalry among competitors
As, we noticed in the External analysis there are a lot of companies which offers the possibility to buy online travel. Most ofthe online travel agencies offers the same services than an online one, namely hotels bookings, flights bookings, cruise booking, cars rental…
They all offer a wide range of products: cheap, medium and expensive travels in different parts of the world.
A lot of competitors offering the same products, that means a big rivalry among the existing companies.
Threats of new entrants