Transformation of the Travel Marketplace Business Model for Global Market
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STATEMENT OF SUBSTANTIVE CHARACTER OF THE COURSE PAPER 1
INTRODUCTION. 3
PART 1. COMPANY AND INDUSTRY REVIEW 6
1.1 Comprehensive Overview of the Company Operations 6
1.1.1 The definition of the marketplace activity & its value for customers 6
1.1.2 The analysis of the traffic types on the marketplace 7
1.1.3 Investigation of the current marketplace business model 16
1.2 External Environment Analysis & Competition 19
1.2.1 The study of the global travel tech market statistics 19
1.2.2 Research of travel tech trends & innovation opportunities in 2024 22
1.2.3 Learning travel insights from the latest public presentations 25
1.2.4 PESTLE analysis: the way market trends influence companies and the industry 31
1.2.4 Exploration of the major market players 38
PART 2. METHODOLOGY AND THEORETICAL BACKGROUND 42
2.1 Methodology & The logic of the paperwork 42
2.2 Theoretical background for each step of the methodology 42
2.2.1 Step 1: Defining the concept of a business model 42
2.2.2 Step 2: Analyzing Company A business model 43
2.2.3 Step 3: Identifying the business model elements to transform 46
2.2.4 Step 4: Developing the practical recommendations 46
2.2.5 Step 5: Assessing risks 46
PART 3. DEVELOPMENT OFRECOMMENATIONS. 47
3.1 Applying analysis tools for recommendations development 47
3.1.1 The Value Proposition Canvas 47
3.1.1 The Current Business Model Canvas 49
3.3 Developing the set of practical recommendations 51
3.4 Assessing the developed recommendations 62
CONCLUSION. 65
LIST OF REFERECNCES 66
INTRODUCTION. 3
PART 1. COMPANY AND INDUSTRY REVIEW 6
1.1 Comprehensive Overview of the Company Operations 6
1.1.1 The definition of the marketplace activity & its value for customers 6
1.1.2 The analysis of the traffic types on the marketplace 7
1.1.3 Investigation of the current marketplace business model 16
1.2 External Environment Analysis & Competition 19
1.2.1 The study of the global travel tech market statistics 19
1.2.2 Research of travel tech trends & innovation opportunities in 2024 22
1.2.3 Learning travel insights from the latest public presentations 25
1.2.4 PESTLE analysis: the way market trends influence companies and the industry 31
1.2.4 Exploration of the major market players 38
PART 2. METHODOLOGY AND THEORETICAL BACKGROUND 42
2.1 Methodology & The logic of the paperwork 42
2.2 Theoretical background for each step of the methodology 42
2.2.1 Step 1: Defining the concept of a business model 42
2.2.2 Step 2: Analyzing Company A business model 43
2.2.3 Step 3: Identifying the business model elements to transform 46
2.2.4 Step 4: Developing the practical recommendations 46
2.2.5 Step 5: Assessing risks 46
PART 3. DEVELOPMENT OFRECOMMENATIONS. 47
3.1 Applying analysis tools for recommendations development 47
3.1.1 The Value Proposition Canvas 47
3.1.1 The Current Business Model Canvas 49
3.3 Developing the set of practical recommendations 51
3.4 Assessing the developed recommendations 62
CONCLUSION. 65
LIST OF REFERECNCES 66
The object of the research of this thesis (hereinafter referred to as Company A) is the business unit of a big travel tech company, that has been successfully operating in the Russian market for more than 15 years. It is a platform-aggregator for easy and reliable online booking of excursions, the main users of which are Russian-speaking tourists. The main function of the platform is to help tourists and activity providers to find each other by collecting all offers and products in one place, that is, in the simplest and most convenient way for users. That is, Company A is a Russian service marketplace for searching and booking tours and excursions, and the features of the business are as follows:
• It is an IT platform for placing advertisements.
• It has been operating for more than 15 years on the Russian market.
• Company A revenue is 680 mln. RUB for 2023.
• The main function of the platform is to help tourists and guides to find each other by collecting all offers and products in one place in the most user-friendly way.
In 2022, the company decided that it was big enough to start considering entering the international market. While analyzing the external environment and the geopolitical crisis, the company decided to enter the international market under a new name and brand, leaving no visual associations with the Russian positioning. It is important to note here that both business units (Russian and European ones) operate based on the same IT product, that is marketplace, so the logic of functioning is almost identical. And there is a developed business model only for the Russian market, while the business model for the unit which is supposed to operate on the global market is still undefined. The point is that the global travel tech market is rapidly growing and changing1, so Company A does lack the knowledge of the global environment and its ever-evolving trends to be ready to adapt its business to global conditions outside of its home country.
Managerial Problem Statement
Company A needs to transform its existing business model and adapt it to the global competition.
Object & Subject of the Research
Thus, the object of this study is the travel marketplace, the international business unit of Company A that is created for global development based on the experience of operating in the Russian market.
And the subject of the research is the business model for the international business unit so that it can operate efficiently on the global market.
Relevance of the Study
In a rapidly changing travel tech environment, companies must monitor market development and its trends in order to understand what changes should be introduced into the business model so that it can stay competitive and efficient market player.
The relevance of this study is explained by the following points:
• The Global Travel Tech Market Size & Competition: it is valued at US$ 6 billion and is predicted to reach a market size of US$ 13 billion by the end of 2033.2
• Travel Tech Market is rapidly changing: the digital trends are shaping the travel industry in 2024.34
• The company's goal is to make its business international and become a competitive player in the global market.
Goal
Based on the identified managerial problem, it can be stated that the goal of this work is to develop recommendations for the transformation of the existing business model of Company A in order to adapt it to the global travel tech market.
...
• It is an IT platform for placing advertisements.
• It has been operating for more than 15 years on the Russian market.
• Company A revenue is 680 mln. RUB for 2023.
• The main function of the platform is to help tourists and guides to find each other by collecting all offers and products in one place in the most user-friendly way.
In 2022, the company decided that it was big enough to start considering entering the international market. While analyzing the external environment and the geopolitical crisis, the company decided to enter the international market under a new name and brand, leaving no visual associations with the Russian positioning. It is important to note here that both business units (Russian and European ones) operate based on the same IT product, that is marketplace, so the logic of functioning is almost identical. And there is a developed business model only for the Russian market, while the business model for the unit which is supposed to operate on the global market is still undefined. The point is that the global travel tech market is rapidly growing and changing1, so Company A does lack the knowledge of the global environment and its ever-evolving trends to be ready to adapt its business to global conditions outside of its home country.
Managerial Problem Statement
Company A needs to transform its existing business model and adapt it to the global competition.
Object & Subject of the Research
Thus, the object of this study is the travel marketplace, the international business unit of Company A that is created for global development based on the experience of operating in the Russian market.
And the subject of the research is the business model for the international business unit so that it can operate efficiently on the global market.
Relevance of the Study
In a rapidly changing travel tech environment, companies must monitor market development and its trends in order to understand what changes should be introduced into the business model so that it can stay competitive and efficient market player.
The relevance of this study is explained by the following points:
• The Global Travel Tech Market Size & Competition: it is valued at US$ 6 billion and is predicted to reach a market size of US$ 13 billion by the end of 2033.2
• Travel Tech Market is rapidly changing: the digital trends are shaping the travel industry in 2024.34
• The company's goal is to make its business international and become a competitive player in the global market.
Goal
Based on the identified managerial problem, it can be stated that the goal of this work is to develop recommendations for the transformation of the existing business model of Company A in order to adapt it to the global travel tech market.
...
To sum up, this thesis is devoted to Company A, a Russian travel marketplace, as an object of the research, and its business model for functioning in the global travel tech market, as a subject of the research. It is worth noting here that Company A has been operating for more than 15 years in Russia and has significant profits, allowing it to invest in its development in the international market, which is now rapidly changing and transforming due to the widespread use of technology and artificial intelligence. Thus, the purpose of this research work is to develop a set of recommendations for the transformation of the company's business model to adapt it to the global travel tech market.
In the process of the research (1) the existing business model of the company, thanks to which the business successfully operates in the Russian market, was determined, (2) the global travel tech market was deeply investigated with the help of many articles and public speeches concerning the development of the travel industry (Deep PESTLE-Analysis was used as the main tool), also the major players and leaders of the researched market were examined in the comparative analysis. The obtained information about trends and changing conditions of the global travel tech market was collected in a table and correlated with six levels of travel journey (The 6-Level Journey Scheme), as well as Process Chain Network (PCN), which displays each stage of interaction between 3 participants of the process: the travel marketplace itself, activity providers, and customers. As a result of the correlation of (1) market trends and (2) stages of interaction between process participants, it has been possible to develop recommendations at each individual travel-journey level.
In this thesis recommendations for short-term and long-term development of the company were proposed. Short-term recommendations were successfully tested on the example of the city of Budapest, Hungary. Recommendations aimed at the long-term development and growth of the company are extremely difficult to evaluate financially and efficiently, since the introduction of artificial intelligence into business processes is a new phenomenon that the fastest market players are now trying to master.
Thus, this consulting project resulted in practical relevance to the management of Company A, which has started its operations in the international market relatively recently. The concluding thought is that in times like these when market is changing rapidly, small new players have bigger chances to become competitive ones as all market figures and leaders are faced with uncertainty to which they need to adapt, which is never easy to do. The one who does it the fastest wins.
In the process of the research (1) the existing business model of the company, thanks to which the business successfully operates in the Russian market, was determined, (2) the global travel tech market was deeply investigated with the help of many articles and public speeches concerning the development of the travel industry (Deep PESTLE-Analysis was used as the main tool), also the major players and leaders of the researched market were examined in the comparative analysis. The obtained information about trends and changing conditions of the global travel tech market was collected in a table and correlated with six levels of travel journey (The 6-Level Journey Scheme), as well as Process Chain Network (PCN), which displays each stage of interaction between 3 participants of the process: the travel marketplace itself, activity providers, and customers. As a result of the correlation of (1) market trends and (2) stages of interaction between process participants, it has been possible to develop recommendations at each individual travel-journey level.
In this thesis recommendations for short-term and long-term development of the company were proposed. Short-term recommendations were successfully tested on the example of the city of Budapest, Hungary. Recommendations aimed at the long-term development and growth of the company are extremely difficult to evaluate financially and efficiently, since the introduction of artificial intelligence into business processes is a new phenomenon that the fastest market players are now trying to master.
Thus, this consulting project resulted in practical relevance to the management of Company A, which has started its operations in the international market relatively recently. The concluding thought is that in times like these when market is changing rapidly, small new players have bigger chances to become competitive ones as all market figures and leaders are faced with uncertainty to which they need to adapt, which is never easy to do. The one who does it the fastest wins.
