Digital Business - KAYAK - Case Study Example

KAYAK Case Study Name Institution Date Introduction KAYAK is a company that is entirely driven by technology to ensuring enhancement in online travel activities (KAYAK, 2016). The company was started in the year 2004 with an attempt of searching for travel options online and therefore utilizes both its websites as well as mobile applications in order to allow individuals to look for and at the same time compare information from various travel websites in a single fast and intuitive display. In addition, the company also offers individuals with a several filtering options, travel management tools as well as services for example, price alerts and route management among others (KAYAK, 2016). Whenever an individual identifies their anticipated flights as well as their hotel of choice, KAYAK guides them to their ideal online travel agency where they can finish their transactions. Furthermore, it also facilitates complete booking directly via its websites and mobile applications (KAYAK, 2016). The company also provides travel agencies with an efficient path to trade their products and services to a higher valued market which entirely aims at purchasing travel. Therefore, this report will critically assess the multi-sided market of KAYAK and determine the kinds of intellectual property that are significant to KAYAK. KAYAK’s Multi-sided Market KAYAK operates a multisided market since it has two separate groups with which it offers each side with network benefits. KAYAK creates value mainly through allowing direct connection between two discrete kinds of customers (KAYAK, 2016). The company attempts to connect the customers who are looking for a favorable travel destination by offering them a chance to search from a long list of service providers who can facilitates their requirements. KAYAK services are always free for travelers therefore, they are able to earn revenue from such trade by sending recommendations to the travel providers as well as other Online Travel Agencies (OTA) once a traveler identifies their particular travel plan (KAYAK, 2016). Furthermore, KAYAK is able to generate its revenues through advertising revenues such as placing various advertisements on both their websites as well as their mobile applications which can be viewed by their travelers. Distribution Revenues KAYAK runs a successful multisided market between their travelers and their travel providers. When a traveler access’s KAYAK’s website, they are able to enter a question and upon reviewing the results and determined their particular travel plan, KAYAK then connects the travelers with a reliable service provider so that they can continues with the purchase process (KAYAK, 2016). Furthermore, most at times, travelers end up finalizing their transactions with the travel providers without even exiting their websites. Therefore, KAYAK is able to generate revenue in this multisided market through payments made by both travel providers as well as OTA’s whenever these qualified travelers click on a question. These payments can be made either on the basis of cost per click where the travelers click on a query on their website or through cost per acquisition where they purchase a travel product through their website (KAYAK, 2016). Advertising Revenues Due to the multisided market KAYAK is operating in, the company is able to generate advertisement revenues through sponsored links and display advertisements among others. The main advertisers within their website comprise of hotels, OTA’s, sponsored links, as well as vacation package providers (KAYAK, 2016). KAYAK is paid by advertisers on the basis of either CPC or even CPM. This means that the company is paid based on the number of times advertisements for hotels and travel providers appear on their websites. Furthermore, KAYAK’s websites creates a platform that encourages the connection between the end users and the travel providers by allowing travel providers to aim at both the placements as well as the messages entered by the travelers. Also, it permits advertisers to formulate messages that are more effective therefore moving people to their websites proficiently (KAYAK, 2016). Additionally, KAYAK allows travel providers to use the search parameter of the travelers to formulate messages which can enhance the probability of a purchase on their website. Mobile applications and Platforms KAYAK provides their traveler with mobile applications which can facilitate their travel experience. They have come up with mobile applications on platforms such as iPhone, Windows Phone 7 as well as Android among others. In order to improve the mobile experience, the company has enforced a mobile-specific practicality which includes: trip plan management, airport guides as well as visual flight status to name a few (KAYAK, 2016). KAYAK has been able to serve its multisided market through these applications since the travelers can be able to query for travel plan at their own comfort and are able to be connected with a reliable travel provider. KAYAK has been able to generate revenue through these mobile applications accounting for 2.9 per cent of their total revenue as of June 30, 2012 (KAYAK, 2016). Furthermore, KAYAK believes that mobile applications are one of the best methods of ensuring a proper connection between their travelers and their travel providers and therefore proceed to commit resources to enhance their functionality. Intellectual Properties Significant to KAYAK KAYAK considers its intellectual property very significant in their overall success and therefore depends on trademarks, license agreements, copyrights as well as trade secret protection and patent law so as to take care of their propriety rights (KAYAK, 2016). Since KAYAK functions in a highly competitive online classification, most of its potential competitors comprise of OTA’s, travel websites as well as general search engines to name a few. Therefore, any slight disruption in their services especially on their websites, which is presently being compered by third-party providers, could easily tarnish its reputation. Therefore, KAYAK highly relies on intellectual properties such as: patents, licenses and confidentiality agreements. Patents Patents are very important to KAYAK since the company believes that both the patents issued as well as the pending patent applications can assist the company to take care of their business (KAYAK, 2016). There can be no guarantee that the patents belonging to KAYAK will not be subjected to challenges or even found to be worthless or even there can be no assurance that their patents are effective enough to defend other parties from using imitator business models to provide the same products and services. KAYAK has been subjected to a number of patent infringement claims which could have a significant cost and at the same time have a hostile impact on the business (KAYAK, 2016). Therefore, if KAYAK is not fortunate in fighting these claims, they may end up paying huge amounts of money damages. Licenses Additionally, in order to resolve claims related to intellectual properties, KAYAK ought to obtain licenses. These licenses are also important to KAYAK since they can be able to allow the company to utilize the intellectual property rights of the third parties (KAYAK, 2016). Although these licenses are very expensive, KAYAK is required to obtain them so as to permit them to use the intellectual property. Confidentiality Agreements Furthermore, intellectual properties such as confidentiality agreements is very important for the sustainable existence of the company. These confidentiality agreements should be maintained between the company and its staff members, advisors, licensees as well as their independent contractors (KAYAK, 2016). They are significant to the company because they protect both the technologies and operations run within the company. Although, these confidentiality agreements may not have the full authority to protect the company’s confidential information such as trade secrets. At the same time it may not have the ability to offer adequate remedy in case of an unauthorized disclosure of confidential information (KAYAK, 2016). Therefore, a strong confidentiality agreement is very important to KAYAK for the sake of protecting their own functionality. Conclusion To sum up, KAYAK is a company that is entirely driven with technology to ensuring enhancement in online travel activities. The company operates in a multisided market since it connects travelers with travel providers such as OTA’s and hotels through their websites. In addition, the company allows travelers to choose their travel plans using search engines which they later recommend to the travel providers. KAYAK’s multisided market runs successfully through distribution revenues. The company generates its revenue though payments made when travelers click on a query on the basis of cost per click. Additionally, KAYAK’s multisided market involves advertising revenue which allows the company earn its revenue through the number of times advertisements for hotels and travel providers appear on their websites. Also, it permits advertisers to formulate messages that are more effective therefore moving people to their websites proficiently. Additionally, KAYAK promotes the multisided market through mobile applications and platforms. It connects the travelers with the travel providers through their mobile applications which makes it easier for their customers to access their services at their own comfort. The company has observed an increase in revenue by about 2.9 per cent in 2012 with customers using their mobile application. Furthermore, the intellectual properties that important to the company includes: patents, licenses and confidentiality agreements. These intellectual property assist the company to protect any form of infringement on their software as well as to protect their confidential information such as trade secrets. References KAYAK. (2016). Search Flights, Hotels, Rental Cars & Vacations. Viewed 9th Oct. 2016 from http://www.kayak.com Read More