TRIPIT: The Traveler’s Agent Harvard Case Solution & Analysis

TRIPIT: The Traveler’s Agent Case Solution

Introduction

The discussion in the case is about the adoption of a new emerging travel agency business in the industry and the case defines the opportunities and hurdles faced by the particular entity. TRIPIT, under the case was considered to be the key firm to face a such situation within IT industry. It is a free online travel service agency, who is responsible to collect data and users specifications from different industry suppliers as well as an intermediary and provide services to the end users (travelers in the case).

In order to adopt the business, the two owners (Greg Brockway and Scot Hintz) raised the necessary funds by using bootstrapping finance. This was less costly as compared to the other financing sources; they used limited funds in the advertising of the business for increasing the user’s data as well as manage the itinerary function.
This would help to meet the demand of the investors regarding the increasing level of profits by more revenues from advertisement given by the suppliers and intermediary as well as increase the financing activities in order to focus on profit maximization.

The second financing activity was held in 2008, whose purpose was to increase the growth as well as market share of the company within IT industry. TRIPIT raised a sum of 5.1 million in order to meet the requirements of the operational activities to generate the desire outcomes. They borrowed funds from three different investors (OATV Sabre Holdings, Travelocity, and Sabre travel network) and used to expand the operations by introducing the new technological software to handle the user’s data under itinerary function. This would help to increase the interest of potential investors to participate in the growth phase of TRIPIT.

Brockway was concerned about the future impact of using the external financing activities and tried to analyze the potential benefit and loss of the business from the sudden economic changes. In order to look at the upcoming results, co-owners were worried about the competition within the market and faced a threat of applying the same tactics as TRIPIT did in the past. This process would hinder the results and performance of the company because it would allow to decrease the unique process and control of the company and to reduce the revenues as well as profits in the future.

Industry analysis

When looking at the performance of an IT industry, it is analyzed that there is still a hyper competition among the market and increasing level of new entrants. Therefore, if one looks at the position of TRIPIT within an industry, then there are some factors that would be considered the key indicators for the success and failure within an industry.

Porter’s Five Forces

The porter’s five forces are the main indicator to analyze the position of a particular entity within a market. According to the results of TRIPIT, these forces would analyze the success and failure of the company within an industry.

Bargaining power of supplier-High

With the market situation, it is analyzed that most of the suppliers have the power to control the travelling data due to their own software and websites. TRIPIT has always posed a threat to disconnect with the particular supplier and to shift  to other suppliers with additional cost.

Bargaining power of buyer-High

As compared to the supplier’s power, the bargaining power of buyer is also the same as for the previous case. This is because every user and traveler has the control to shift for other services due to high cost or poor services of the particular entity or the agency. Therefore, for TRIPIT, the treat of changing the unique users has always been in a stack and thus would decrease the level of revenues in order to survive within a market..................

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