KAYAKs Multi-Sided Market Analysis - Case Study Example

KAYAK CASE STUDY Name Institution Professor Course Date KAYAK Case Study KAYAK comes out as a technology-driven business entity focusing on the improvement of the online travel. The company came into existence in 2004 with the objective of exploiting an effective approach towards finding travel online. The company has been able to utilize websites and mobile applications to facilitate easy access and assessment of accurate, as well as relevant information from diverse travel websites in comprehensive, intuitive, and fast encounter. Additionally, the business entity has been able to offer multiple filtering and sorting options, tools for travel management, and flight status updates, pricing notices, and other valuable services. The organization’s services are free for the travellers. The company tends to earn its revenues through sending referrals to the travel suppliers and OTAs, as well as advertising placements on the websites and other mobile applications. The objective of this report is to focus on the assessment of two questions. In the first instance, the report will explain and evaluate the multi-sided market of KAYAK. Secondly, the report will explore the types of intellectual property, which are important to KAYAK with substantive illustrations on their significance. KAYAK’s Multi-sided Market Analysis According to Rocher & Tirole (2008), multi-sided markets refer to the markets in which platforms tend to offer or provide interaction services to two or more categories of the end-users. On the other hand, Evans (2003) focused on the utilization of three components in the course of defining or illustrating the concept of the multi-sided market. In the first instance, he believes that a two-sided market occurs in the context of firms serving two distinct types of customers. Secondly, such firms or platform of operators service customers or consumers who depend on each other in certain important way. Finally, multi-sided market enables firms to serve consumers who joint participation generates platform for the creation of value to each other. In the maximization of its revenues, KAYAK focuses on the utilization of multi-sided market model. In this context, it is ideal to demonstrate the fact that KAYAK utilizes websites and mobile applications, which enable users or consumers to research, as well as compare accurate and relevant information from other travel websites. Moreover, KAYAK aims at offering numerous or multiple filtering, as well as sorting options and management tools and services for the travellers. Some of these services include flight status updates, pricing alerts, and itinerary management. Upon finding the desired flights, hotels, and other travel products, KAYAK engages in the provision of sending the travellers to their preferred travel suppliers or online travel agency website with the objective of enabling them to complete their procurement. In other instances, travellers complete their bookings through KAYAK’s websites and mobile applications. Evidently, KAYAK provides services, which are free for the travellers. Furthermore, KAYAK engages in the provision of the efficient channel to the travel suppliers and online travel agencies or OTAs to market or sell their products and services to the highly targeted audience aiming at procuring or purchasing travel. In the midst of these transactions, KAYAK tends to earn revenues through sending referrals to the travel suppliers and OTAs, as well as utilization of the advertising placements on the websites or mobile applications. The multi-sided market is critical in enabling KAYAK to create value and maximize its revenues while addressing the demands and expectations of the consumers and suppliers in the travel sector. In the course of achieving this goal, KAYAK is able to enable the users to reduce the search costs because of the ability to utilize diverse applications for effective and efficient comparison of the services from the organizations in the industry of focus. In this context, the reduction of the search costs associates with the improved brand image or reputation, as well as opportunity for profiling of the business entities or travel websites for effective and efficient booking. Moreover, the multi-sided market is ideal in enabling KAYAK to engage in the reduction of the transaction costs. This is through exploitation of contracting and enforcement platforms for the maximization of the revenues and minimization of the costs of operation in pursuit of sustainability in the industry of operation. In pursuit of this goal, KAYAK engages in the utilization of the automated transactions for the users seeking to make bookings for their travels on the online or digital travels. Besides, KAYAK provides secure transactions for the users on the online platforms and mobile applications in the satisfaction of their needs and expectations. The creation of values also emanates from the ability of KAYAK to facilitate effective monitoring of the past transactions in pursuit of competitive advantage and sustainability. In spite of these benefits in the creation of value, the model tends to associate with the ‘Chicken and Egg’ problem, which relates to the approach by the business entity to get both suppliers and consumers on board in pursuit of high revenues. From a strategic point of view, the multi-sided market provides the platform for subsidizing the customer segment. The platform operator incurs costs through serving all customer groups. Nonetheless, the platform operator engages in luring one segment to the platform with the inexpensive value proposition with the objective of attracting users of the other side of the platform. From the operation or execution perspective, KAYAK focuses on aligning sales, services, marketing, and support functions on the mobile application with the objective of delivering the desired margins for the achievement of success for the organization. Types of Intellectual Property important to KAYAK and Justification According to KAYAK, intellectual property is critical in pursuit of success. Evidently, the company tends to rely heavily on the trademark, copyright, and patent law, as well as trade secret protection. Additionally, KAYAK depends on the confidentiality and license agreements with the intention of protecting its proprietary rights. In the course of addressing the goals and targets of the company, KAYAK tends to believe that issued patents, as well as the pending patent applications are critical in helping in the protection of the business. Nonetheless, there is never assurance that the operations do not or will not infringe valid and enforceable third-party patents of the third patients. In other instances, competitors might engage in devising new methods for competing against KAYAK. From this illustration, the issued patents or patent applications do not cover these potential risks. Moreover, there is no substantive assurance that the third parties might not challenge the patent, thus, platform for finding them invalid or unenforceable. This indicates the need for the patents to be effective and efficient in the prevention of the third parties from utilization of the copycat business model in the course of offering same service. From the above illustration, one of the most important intellectual property elements for KAYAK is patent. Patenting the transactions of the company will be ideal for the company in the prevention of others or competitors from making, utilizing, or marketing its invention without its consent. Additionally, this IP element is critical in enabling KAYAK to exploit the subsequent increase in the value of time, thus, platform for maximization of the image and reputation of the company. The company will also be able to utilize patenting to increase the value of the business because of the consideration by the banks and users as valuable asset in satisfaction of the demands and expectations of the target audiences. On the other hand, there are also financial benefits or implications of a patent for KAYAK. It is possible for KAYAK to engage in selling its patent outright to another competitor with the intention of gaining substantive monetary remuneration. Similarly, KAYAK might consider licensing its patent to one or more parties for the percentage of the sale cost or price. From this illustration, patent is one of the valuable assets for KAYAK, thus, the platform to protect the company against unscrupulous business entities or practitioners seeking to benefit from its hard work. Secondly, KAYAK might also benefit from subsequent trademarks and copyrights as valuable intellectual properties in pursuit of competitive advantage and sustainability. Trademarks and copyrights are valuable in the protection of the image and reputation of the firm in question, thus, the platform for KAYAK to maximize its revenues and profit levels while addressing the demands and expectations of the consumers. These attributes are critical in enhancing the approach by the organization to achieve its goals and targets while improving protection of its creations or innovation in the highly competitive industry. Conclusively, the report sought to focus on the assessment of two questions. In the first instance, the report sought to explain and evaluate the multi-sided market of KAYAK. Secondly, the report did explore the types of intellectual property, which are important to KAYAK with substantive illustrations on their significance. According to the findings, the multi-sided market is ideal in enabling KAYAK to create value in pursuit of sustainability. On the other hand, the report highlights potential influences of patent, trademarks, and copyrights as the most important types of intellectual property in improving the image and reputation. Read More