The Market Analysis of TravelTrot Company - Assignment Example

Mobile Commerce Business Plan Executive Summary: This business plan is on a new business venture within the emerging mobile business sector and would determine several issues within the mobile commerce business aimed at categorising the market sector that the new business venture would be aiming at the core competencies and factors that could lead to the success or failure of the business the measures or evaluative tools that could be applied at a later stage to determine whether the introduction of the business had been successful The emerging business sector of mobile commerce has opened doors to new possibilities and business opportunities and we provide a business plan for selling air tickets and travel deals targeting users of mobile devices, emphasising on the mobile business sector as the primary marketing tool for our company. TravelnTrot.com is a global online ticketing service based in the UK that provides travel deals, hotel deals, tour information and tour packages, as well as last minute ticketing services and airfare deals to customers in the UK and worldwide. This business plan would focus on the information services that could be used by TravelnTrot to attract or inform mobile users using the emerging facilities of m commerce. Introduction: Mobile commerce or m-commerce is considered as the next logical step or advancement of business systems after electronic commerce or e-commerce and refers to transactions with the use of a wireless device and data connection that can result in payments for information, services and goods. Mobile commerce is facilitated by mobile phones rather than the internet and includes services of online buying and selling as well as banking, payments and ticketing. M-commerce or mobile commerce has been projected as the next generation e-commerce or the next phase of buying and selling moving beyond online selling to mobile selling. Mobile commerce refers to buying and selling of services and products through wireless handheld devices such as cellular or mobile phones and personal digital assistants or PDAs. M-commerce enables users to do online buying and selling and also helps in accessing the internet without the need for any kind of plug in devices. The technology behind e commerce is based on the WAP or wireless application protocol and WAP technology is available in most mobile devices in Europe. Mobile phones with WAP technology have devices equipped with Web-ready micro-browsers and can help in furthering online access and browsing to help in buying and selling using handsets and mobile devices. These devices could thus be used for basic buying needs, payments, banking and ticketing as well as for accessing internet, messaging service sand reading email. However for mobile commerce the focus is on buying and selling and making payments using mobile devices and WAP technology rather than using the internet through a traditional computer. The m commerce market potential looks promising and handset manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm have been working with carriers such as AT&T Wireless and Sprint to develop WAP-enabled smart phones. A recent technology has been the Bluetooth technology and smart phones with Bluetooth devices tend to offer fax, phone and email capabilities for m commerce to be accepted within the mobile and business workforce. M commerce allows users to access the internet from anywhere and thus do business beyond borders or limitations of locality. Mobile commerce helps in the delivery of e commerce and online facilities using wireless devices and WAP technology. Major companies have been working in partnership with banks and ticket agencies to take advantage of the retail facilities available in mobile devices. Mobile commerce refers to business transacted with the help of mobile phone networks, or similar communication links allowing considerable mobility amongst the users. Electronic commerce relies on internet connection through phone line and broadband and fixed telecommunications links. Mobile commerce takes the idea of mobility while doing business across all boundaries and thus being not confined to any location, mobile commerce has more possibilities than electronic commerce which seems to be limited in space and time. Content and products delivered over the wireless devices could become faster and more secure and it has been speculated by market analysts that m-commerce will surpass e commerce for digital commerce transactions. M-commerce is successfully applicable for industries that are involved in Financial services - as in mobile banking customers can use handheld devices and PDAs to pay bills and access accounts and also for online trading as stock quotes can also be displayed on such mobile devices Information services - this can include the delivery of financial news, sports news and traffic updates to any mobile device at any time Telecommunications, and service changes, account checks and bill payments could be done with hand held devices Service/retail sectors - customers can buy things and place orders for goods and products while still on the move with the click of a button We use the service and retail sectors as well as information services for sending information on ticketing and travel and also for selling travel deals and airline tickets online through mobile devices and wireless technology. Mobile Commerce - Research Findings Wright (2000) has discussed extensively on the increasing popularity of mobile phones and wireless devices especially the wireless application protocol or WAP technology that could be used for fulfilling all daily needs and has the potential of replacing the traditional internet as obtained through a landline phone connection and broadband. Europe and Asia have been leading the way for such devices and the WAP technology and since mobile devices are becoming very sophisticated users can now access to the internet from their wireless device instead of having to go through the internet from their wired personal computer. Thus wireless devices and wireless technology has helped to provide greater freedom and mobility, especially to travellers and busy professionals. Mobile devices provide the access of wireless technology and connectivity with the power of the internet thus people can check their emails or do all online activities including buying and selling from their hand held or mobile devices without having to log on to their personal computer. Wright (2000) suggests that the wireless access technology is crucial for displaying content of all wireless devices and as wireless technology grows in its applicability and becomes more acceptable worldwide, the opportunity for business organisations and marketers would also grow. This would indicate strong opportunities for any business focused on marketing through mobile devices and WAP technology. As Wright suggests, a new and advanced marketplace has been created and marketers can reach to consumers by using WAP in new and effective ways. A study described by Wright and conducted by the marketing company AnywhereYouGo.com shows that marketing analysts and executives have indicated that wireless advertising will be one of the most important forms of marketing within the next two years and may even replace all other forms of marketing. The WAP and wireless technologies have enabled marketing companies to come out with new marketing initiatives and have helped marketing companies to discover and apply new ways to reach out and connect to consumers using new business models and strategies. In fact it is widely accepted that companies which can embrace the new technology and use wireless technology effectively will become leaders in their field. The opportunities presented by WAP seem to be immense and marketing executives could use this new technology to implement their marketing campaigns using wireless devices and also to overcome and face challenges that are encountered by the different industries to adapt to changing user demands. For wireless applications to be successful, it would be important to have dependable wireless networks to support mobile commerce applications. Malloy et al (2002) suggest that mobile commerce is an emerging discipline that involves applications and mobile devices as well as wireless networks. The existing e commerce applications are modified to run in a wireless environment and are adjusted within the m commerce framework, also involving new applications within the wireless infrastructure. The applicability of wireless technology include mobile financial services, user specific advertising, local specific mobile communications, mobile inventory management, wireless business reengineering, and mobile interactive games. Malloy et al (2002) point out that mobile commerce is largely dependent on the wireless infrastructure and tend to have several disadvantages as unlike e commerce applications that run on fixed networking infrastructure and have very high dependability, m commerce applications do not have such high dependability from the emerging wireless technology and infrastructure. The research on m commerce is largely based on wireless applications, wireless devices and security issues and Malloy et al point out that research would be necessary to address dependability issues and challenges of the wireless infrastructure to show how much mobile commerce applications could depend on the infrastructure and what would be the expectations of marketing professionals in terms of the infrastructure facilities of the WAP services and technology. The issues that should be discussed and investigated on within research limitations would include the dependability issues of wireless infrastructure, architectures to improve dependability of wireless networks, simulation models and dependability of m commerce on wireless technologies. An improvement in applications of wireless technology could be possible with up gradation of infrastructural facilities of WAP technologies so that proper applications could be made for mobile devices. Barnes (2002) captures the rapidly changing technologies and evolving business market and suggests that even before electronic commerce could take a full hold the market is rapidly adapting to a new wave of technology driven commerce known as mobile commerce or m commerce. Barnes points out that there is an increasing saturation of new devices fuelled by mobile technology and this include cellular phones, and personal digital assistants or PDAs. Like the changes brought about by e commerce, m commerce also promises to change market demands, customer orientations and preferences and also the ways in which certain activities and business functions are conducted. The new mobile devices have micro browsers and new technological applications and offer the internet in the pocket or at any time from anywhere which is clearly a great step forward for regular internet users. Through this new technology consumer possibilities seem endless and include facilities of online banking, booking flights and hotels, buying tickets, online trading and auctioning, shopping and accessing real time updated news. Mobile commerce is oriented towards the consumers and has a B2C or busyness to consumer approach to marketing in which value is added and provided to customers through a range of activities and facilities. Barnes (2002) analyses the key players and technologies that form part of the m commerce value chain and provides the foundation for the strategic analysis of the future of the m commerce industry. It would be however important to understand what the technological issues of m commerce are and how consumers respond to these issues and how these issues could be examined thoroughly to understand the future directions of mobile commerce. Company Objectives: The objectives of the company TravelnTrot is 1. To target mobile consumers who are on the move and who have a busy lifestyle and focus on services depending on their needs 2. to provide online travel and ticketing services for consumers who are looking for travel deals 3. to provide upgraded and updated information services for consumers seeking travel information 4. to provide comprehensive travel information, travel products and services to consumers who are mainly mobile users and even busy to log on to traditional means of online access through the internet Company Mission: TravelnTrot is aimed to be a global travel company focused on providing travel services including ticketing, travel deals, flight deals and hotel reservations for people who are always on the move and who use mobile devices for all their travel, flight and reservation needs. TravelnTrot is aimed to provide comprehensive services on all areas of travel and is focused on becoming one of the best global travel companies. Although the initial business transactions would be based in the UK, and would be focused on UK customers, the ultimate aim of the company is to provide travel solutions through m commerce using mobile devices such as the cellular technology and WAP to fulfil the needs of all travelling business consumers across the world at a global level. Critical Success Factors: The critical success factors of the company TravelnTrot would be dependent on internal and external factors of excellence in service, selling and marketing power, and quality of service and customer satisfaction attained and the visibility of brand name attained by the company. The role of the management team and the management strategy is also important in the success of the company. We identify the internal and external factors that would help to establish the company at a UK and global level. Quality of Service: This is extremely important as it helps in providing the brand image of the company. Services provided to customers should be of high quality determined by the level of timeliness and appropriateness of services offered including response to queries and fulfilling of ticketing and travel needs. Selling and Marketing: This is an important aspect of the company's success as adequate advertising and marketing of company's image and activities is an essential part of launching a specific service. Management team: The role of the management team could be highlighted as central to shaping the principles, policies and mission of the company. The management team lays down the targets to be achieved including revenue structure expected, established the organisational framework and determines company objectives, business strategies and the nature or extent of product development. The external success factors of the company are dependent on the market changes due to economic policies, globalisation as a phenomenon in the world economy, political and social factors as well as changes in the competitive environment and industry structures. The focus of the business of TravelnTrot being on customers on the move, the major aspect is to reach out to the customers through m commerce, thus having an updated technological and communication facility would be extremely important for the company. Considering the importance of m commerce in improving business relationships and interactions, Leek et al (2003) focused on the interaction approach in business to business relationships and the changes to this approach within the business environment. Thy point out that globalisation and rapid evolution of IT and e commerce have led to many changes in business interactions and practices from manufacturing to services and the development of IT and m commerce has changed the way business is conducted playing a dominant role in business to consumer models and business to business models. The impact of technology on business relationships may have to be studied in greater detail to understand the role of information technology in marketing management and development of B2B relationships. However there are great variations to the use of technology in business to business environments and the use of mobile phones, internets, intranets, emails, extranets and audiovisual conferencing are important aspects of business relationships. According to Leek et al, it is essential for business organisations to remain completely aware of the facilities and uses of the new technologies and use these technical equipments and knowledge effectively to promote the company's interests. Thus adapting to technological changes would be one of the major success factors of the company considering both B2B and B2C models. The factors affecting company performance and business analysis would be determined with the help of SWOT and PESTLE tools that shows the strengths, weaknesses, opportunities and threats that the company could face while launching its services in an exploding travel industry within the UK. The PESTLE analysis would focus on the political, social, technological, and economic factors that can affect the company during its entry into the UK market. The SWOT and PEST would be done in the later part of the plan. Company Summary and Focus: The company under the trade name TravelnTrot would be registered in England and Wales to obtain a VAT number and requisite registration number to be obtained within the year 2006. The company would be located in the busy cosmopolitan capital of UK, London and would have its operations from the head office located in central London near the Victoria train station. The company aims to establish other office spaces in other parts of the UK including Manchester, Birmingham, Brighton and Leeds. Considering its global ambitions, TravelnTrot aims for a global travel company and within the next five years aims to establish its offices in Shanghai, New York, Paris, Tokyo and New Delhi. As far as its organisational structure is concerned, TravelnTrot would be led by a CEO or Chairman who would be the head of all departments and oversee the general organisational structure and function of all the offices and draw out plans for expansion and general management of the organisation. The organisational structure would be further divided into four departments that would handle ticketing and flight reservations, travel deals and holidays, hotel bookings and travel information services respectively. These four different departments would be led by four managing directors who would be responsible for marketing and general management of their respective departments. The managing directors would oversee marketing management although each department would have its own marketing manager responsible for management of advertising. Each division will also have its own sales department and finance department and customer service division that would focus on meeting customer needs and also financial needs of the company. Business week cites analysts to suggest that mobile commerce transaction could reach well over $2 billion by 2006 although there may be many social, technological and business obstacles (Business week, accessed 2006). Business week suggests that although some rudimentary forms of m commerce is already making its way into the market, the more complex forms and elaborate uses of m commerce may arrive only after a few years. One of the greatest challenges seems to be the use of wireless technology in devices that are difficult to navigate or out of date. Thus proper mobile and handheld devices will be needed and promoted to make them compatible with the demands of the new WAP technology. However next generation m commerce applications are already being built into wireless networks and new mobile devices and PDAs are developing fast to keep up with the growing changes of technology and making changes to adapt to wireless technological applications. Along with changes in technology, financial considerations for such devices have also gone up. Datamonitor estimates that operators will be spending over $5 billion worldwide on m-commerce infrastructure within this year, up from about $280 million in 2000. Business week suggests that Europe and Asia Pacific show the greatest potential for expansion of mobile commerce business, and more than 12,000 m-commerce applications will be available by 2006 (Business week, accessed 2006). Considering that consumers in Europe and Asia are more likely to adapt to mobile commerce applications and use new technology more frequently and easily than their American counterparts, our business advertising and applications based on wireless technology would be especially effective for European and Asian customers. For this purpose our company TravelnTrot would focus on UK customers initially who would like to book flights or hotels in Asia and Europe for leisure or business travel purposes. TravelnTrot would focus on customers who are frequent travellers to European ad Asian destinations and would provide information and ticketing services or travel deals to these customers identified. The company's business principles would be focused on maintaining long term business relationships with customers. Company Services: TravelnTrot would focus its services on four main areas of Ticketing and Flight Reservations Holiday Deals and Travel packages Hotel bookings Travel Information services Some of the areas of management that could be considered as important aspects of these divisions would include Marketing and Advertising, Sales and Finance, Customer service, Communications and technology (including IT support), Operations Management and Human Resource Management. The use of m commerce would be especially relevant for the marketing team which would work as a team with the travel information services department to send out advertisements and information on new travel deals to customers worldwide. This service would especially require improved technology and features such as WAP and would focus on customers who are on the move or who use mobile devices for access to travel information and travel services. The communications and technology department would not only focus on maintaining an updated IT system to help ease of booking and reservations but would also emphasize on proper record keeping with names and contact information of customers on file for future reference and for sending out travel information on new deals and holiday packages. Customer service departments thus should work closely with IT and communications departments and hand over customer information for future records and reference. The customer service is also directly responsible for providing complete customer satisfaction and is thus instrumental in bringing back customers for future business transactions. The marketing and advertising department plays a crucial role and will have to work with all the different division s of ticketing, reservations, hotel bookings and travel deals and information divisions as also the communications and IT and customer service divisions to understand basic customer needs and expectations and would project the company image according to these expectations. Marketing and advertising can be done through various avenues and mobile commerce would be an important avenue through which advertisements could be sent directly to cell phones of customers and clients. Emails on new travel deals and general information as well as general advertising on the internet would be some of the ways in which business objectives could be met. The sales and finance department is involved in drawing out a report on the general profits and revenues of the company and would be responsible for presenting their findings to the board members for evaluations at the annual meeting. The human resource department is also expected to work in close association with the four divisions of services to employ the right kind of people for the different jobs according to qualifications, experience and interest. Human resource department is asked to focus on the needs of the employees both in terms of their professional needs and their personal needs. Market Analysis: We would finally perform a market analysis using SWOT and PEST tools to understand the issues to be considered for the launch of the company. SWOT analysis would focus on the strengths, weaknesses, opportunities and threats of TravelnTrot (Dealtry, 1992) as it enters the UK travel market that seems to be exploding and promising although not without already existing large number of players. The UK travel industry as well as the global travel industry looks promising with the economic boom in Asia, and general positive economic situation in the UK. With a rising number of young professionals who have to travel extensively for busyness needs and the upwardly mobile community in the emerging markets of Asia that has increased leisure travelling, the boom of travel industry seems to have just begun. The travel industry looks particularly promising in the merging markets of Asia and also in Europe and coupled with the fact that these regions are also more open to technological changes and use of mobile commerce , our business activities would be focused on these parts of the world. Mainly for this reason we aim to expand our operations to the Asian markets of China, Japan and India. Strengths: Booming travel industry in UK, Europe and Asia Mobile commerce focus would be extremely advantageous for the company Travel information and saes could be upgraded with the use of new technology Business objectives and mission of the company are already in place The company is geared to have a strong base in the UK with possible expansions to Asian and European cities The use of mobile commerce can be effectively used as marketing and sales strategy especially in Europe and Asia A clearly developed team management approach and organisational structure can help in division of responsibilities and promote company goals and objectives Weaknesses: The mobile commerce technology is still in its initial stages Company cannot be entirely dependent on m commerce facilities due to the limitations of technological devices that have failed to keep up with demands of the industry Travel industry is yet to update itself according to rapid changes in technology Most of travel information still available only on the internet rather than on mobile device The mobile devices and PDAs are not compatible with the rapid changing technological necessities Most companies have not updated their IT systems according to the necessities of m commerce and TravelnTrot would have to consider this point Opportunities: Booming travel industry Globalisation has led to new opportunities in travel and hotel businesses There is sharp rise in travel among people in emerging economies Europe and Asian markets are very promising in terms of travel and in terms of using and adapting to m commerce technologies Increased travelling among young professionals for business and leisure Consumers seem to be keener on new deals and focus much on budget travel in which case, travel information services would be especially useful Threats: Many competitors and travel companies in the market Within UK chief online competitors would be travelbags, ebookers, lastminute, expedia etc. that focus on providing efficient and cheap services One of the major challenges would be providing price deals that would be attractive to consumers Failure to keep up with advanced IT, communication and wireless technologies would be major drawback for the company A downturn in economic boom could lead to a major slump in travel industry A PEST analysis would focus on the political, economic, technological and social factors that can be either obstacles or opportunities for the company. Political factors: The Iraq war and other terrorism related events have led to a rapid decrease in travel Tourist industry has been suffering in areas such as Lebanon, Iraq, and even Thailand due to political tensions and terrorist threats Economic factors: There are major possibilities of travel boom in emerging markets although there may even be a sharp decrease in travel in case of sudden economic recession Globalisation has changed the dynamics of travel and the focus now seems to be on Asian and European travellers rather than on American travellers Social factors: One of the reasons for which mobile commerce may or may not be successful in certain regions would be highly depend on social acceptance o new technology In Japan for instance new technology is very quickly adapted when compared with other cultures This should also be coupled with the approach to travelling as people of certain cultures as in the UK are more eager to travel than people from other cultures Adapting to changing technological needs is one of the major social processes that should be considered Technological factors: The technological factors that can affect the company would be related to updated IT and communications system which the company should maintain for proper B2B and B2C approach Using wireless technology as its advertising tool would be major step forward in travel marketing Some of the obstacles we have already pointed out would relate to incompatible handheld devices which would not be able to receive messages through WAP technology. Conclusion: In conclusion, we can suggest that the use of mobile commerce through WAP technology could be an important marketing tool for TravelnTrot. Considering the business objectives and approach of the company, the role of advertising and travel information services through mobile devices such as cellular phones and PDAS would be instrumental to company performance and success in the future. Bibliography Aungst Stan G;Wilson David T.2005 A primer for navigating the shoals of applying wireless technology to marketing problems The Journal of Business and Industrial Marketing, Volume 20,Number 2, February pp. 59-69(11) Barnes S.J. 2002 The mobile commerce value chain: analysis and future developments International Journal of Information Management, Volume 22,Number 2, April pp. 91-108(18) Barwise P. 2001 TV, PC, or Mobile Future Media for Consumer e-Commerce Business Strategy Review, Volume 12,Number 1, pp. 35-42(8) Dealtry, T. Richard. 1992. Dynamic SWOT analysis :developer's guide : when looking to the future look for the opportunities and threats and consider your strengths and weaknesses /T. Richard Dealtry. Birmingham (Prince's Corner, Harborne Park Road, Harborne, Birmingham. B17 0DE) :Dynamic SWOT Associates, Ghinea G.;Angelides M.C. 2004 A User Perspective of Quality of Service in m-Commerce: Special Issue: Mobile Multimedia and Communications and m-Commerce Multimedia Tools and Applications, Volume 22,Number 2, February pp. 187-206(20) Ghiassi M.;Spera C. 2003 Defining the Internet-based supply chain system for mass customized markets Computers and Industrial Engineering, Volume 45,Number 1, June pp. 17-41(25) Ben Hourahine;Melanie Howard 2004 Money on the move: Opportunities for financial service providers in the 'third space' Journal of Financial Services Marketing, Volume 9,Number 1, September pp. 57-67(11) Hung S.-Y.;Ku C.-Y.;Chang C.-M. 2003 Critical factors of WAP services adoption: an empirical study Electronic Commerce Research and Applications, Volume 2,Number 1, Spring pp. 42-60(19) Kumar S.;Zahn C. 2003 Mobile communications: evolution and impact on business operations Technovation, Volume 23,Number 6, June pp. 515-520(6) Mort, Gillian S.;Drennan, Judy 2005 Marketing m-services: Establishing a usage benefit typology related to mobile user characteristics The Journal of Database Marketing & Customer Strategy Management, Volume 12,Number 4, July pp. 327-341(15) Mylonopoulos, Nikolaos;Sideris, Ioannis 2006 Growth of Value Added Mobile Services Under Different Scenarios of Industry Evolution Electronic Markets, Volume 16,Number 1, Number 1/February pp. 28-40(13) Kinsella R. 2002 Securing E-business in a Wireless Environment Network Security, Volume 2002,Number 2, 28 February pp. 12-13(2) Leek S.;Turnbull P.W.;Naude P. 2003 How is information technology affecting business relationships Results from a UK survey Industrial Marketing Management, Volume 32,Number 2, February pp. 119-126(8) Malloy A.D.;Varshney U.;Snow A.P. 2002 Supporting Mobile Commerce Applications Using Dependable Wireless Networks Mobile Networks and Applications, Volume 7,Number 3, June pp. 225-234(10) Mohamed A. Sharaf;Panos K. Chrysanthis 2004 On-Demand Data Broadcasting for Mobile Decision Making: Mobile and Pervasive Commerce (Guest Editors: Ravi Jain, Hui Lei and Marisa Viveros) Mobile Networks and Applications, Volume 9,Number 6, December pp. 703-714(12) Riivari, Jukka 2005 Mobile banking: A powerful new marketing and CRM tool for financial services companies all over Europe Journal of Financial Services Marketing, Volume 10,Number 1, September pp. 11-20(10) Rettie, Ruth;Grandcolas, Ursula;Deakins, Bethan.2005 Text message advertising: Response rates and branding effects Journal of Targeting, Measurement and Analysis for Marketing, Volume 13,Number 4, pp. 304-312(9) Shih G.;Shim S.S.Y. 2002 A Service Management Framework for M-Commerce Applications Mobile Networks and Applications, Volume 7,Number 3, June pp. 199-212(14) Singh G. 2000 Freedom Without Compromise: Creating a Secure Environment on the Move Computer Fraud & Security, Volume 2000,Number 12, 1 December pp. 11-13(3) Suoranta M.;Mattila M. 2004 Mobile banking and consumer behaviour: New insights into the diffusion pattern Journal of Financial Services Marketing, Volume 8,Number 4, June pp. 354-366(13) Tsalgatidou A.;Pitoura E. 2001 Business models and transactions in mobile electronic commerce: requirements and properties Computer Networks, Volume 37,Number 2, October pp. 221-236(16) Wang, Yi-Shun;Lin, Hsin-Hui;Luarn, Pin.2006 Predicting consumer intention to use mobile service Information Systems Journal, Volume 16,Number 2, April pp. 157-179(23) Wright L. 2000 Wireless application protocol (WAP) Interactive Marketing, Volume 2,Number 2, October/December pp. 148-157(10) BBC.co.uk - BBC news, 2000 accessed 2006-04-03 A simple guide to m-commerce http://newswww.bbc.net.uk/1/hi/business/992292.stm Businessweek Online, May 2001, accessed 2006-04-03 Online Extra: Mobile Commerce Is Coming--Modestly, Eventually http://www.businessweek.com/magazine/content/01_20/b3732698.htm Read More