CTRIP: SCIENTIFICALLY MANAGING TRAVEL SERVICES Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

CTRIP: SCIENTIFICALLY MANAGING TRAVEL SERVICES Case Study Analysis

Organized

Ctrip organized all the available resources effectively and efficiently and provided its customers with low prices along with procedure convenience. Ctrip established its own ticket delivery team with on time delivery, within 2 hours anywhere- parks or homes. This approach covered 50% of its sales volume.In China, it has overall 3% market share in the travel market and 51.6% in OTA (Online Travel Agency)(BROSZIO, 2020). The company has conducted its day to transactions through call system and through an online system, the bifurcation is 60% and 40% respectively.(See appendix 1 & 2)

Porter’s Five Forces Analysis

Porter’s five forces analysis has been performed in order to analyze the Ctrip’s external environment. The analysis reveals that the threat for entrants were highfor the company because of China’s government policies, which encouraged investment in all type of industries. In addition to this, the threat of substitute product was moderatebecause Ctrip was already providing e-ticketing services. Althoughtherecould’ve beena possibility that the customer might have preferred to use road transport instead of air transport.The threat of competition is high because now the travel industry is aggressively approaching towards technological change. However, the threat of bargaining power of supplier is moderate because Ctrip had already made contracts with hotels for reservation and travel agencies. Ctrip’s approach toward its supplier has always been effective. At the end of 2010, Ctrip had total of 17,000 hotel supplier, hotels for allotment agreement were about 12500,with an inclusion of 20,000 hotel suppliers abroad. The threat of bargaining power of customerswas low because Ctrip already had designed many discounted tours and facilities such as online deliverysystem and DIY’s tours. (See appendix 3)

Ctrip’s Scientific Approach

In 2001, Ctrip adopted a scientific approach in which key features were strategicdecision-making process, which were based upon data driven concept and the hypothesis made. Ctrip management analyzed the need for proper interrelated procedure which could facilitate total quality management concept, division of work, work measurement and proper process analysis. To analyze the competitiveness of this approach, strategic and non-strategic analysis were performed. The analysis presented that the approach was rigorous and carried high potential to attract more customers, because it had emphasized basically based upon the customer’s data driven strategy. Additionally, this approach helped to cut down the call limit from 210 seconds to 180 seconds. This strategy comprised of over six sigma concept, which were followed by all services departments. The open culture would facilitate pure discussion. The analysis represents that this approach is strategic, because it provides low prices along with highly satisfied customers. Ctrip had expert leadership and team nationally and internationally, because of its effective training sessions, which enabled it to give a tough competition to its competitors.

Limitation of Scientific Approach

This approach entails some of the limitations, which are discussed below:

This approach requires everything to be measured, because it entails cultural quantitative nature.
The skilled and trained IT team would be required every time,who would have efficient analytical capability,with an additional ability to gather correct data.
An incentive system which will motivate employees to perform at their best level.
Develop a culture which will facilitate an open discussion and helps in exploring many new innovative ideas.

Recommendations

It is recommended that Ctrip should broaden its customer base by targeting potential budget travelers, because primarily the target market was FITs and they are generally business travelers and have budgetconcerns. Additionally, it is easy to attract and managethe budgeted traveler, because they are same as its previous target market.

Conclusion

In 1999, Ctrip.com international ltd was founded in Shanghai. Air ticketing, hotel reservations and packaged tour were its core business. Primarily, Ctrip’s core target market were FITs (Frequent Independent Travelers) and now the Ctrips’ management is considering to broaden its customer base through analyzing other potential target markets. Ctrip was considered as the best corporate travel agency in 2011, because of its highly competitive strategic approach. Additionally, its core competencies included its online 24-hour open platform, online E booking system, PDA (Personal digital assistants) system, V-booking, GDS (Global distribution system), trained management and ticket delivery team. It had established a customer centric environment along with adopting scientific managing approach................................

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