Analysis of the business environment of Opodo

Key trends

Increasing trends of using apps and alternative ways for people booking travels on the mobile etc. which could be a threat for Opodo.

Smartphone penetration is expected to reach 92% in Europe by 2014 with mobile phones set to overtake PC’s as the most common web access device worldwide.

The first consumers using the smartphone were business travelers but now the leisure consumers are also catching up.

Green environment. Consumers’ interests for the green environment are still increasing and the consumers not only want to improve themselves through fitness, healthcare etc., they also wants to improve others and the environment.

An important development for Opodo is that there is a rise of travel and tourism reservations through social networks applications such as Facebook etc. It has already been shown that a markeeting tool as Facebook is important and idicates higher sales both for the companies in travel and tourist industry.

Travel retails are expected to stagnate because of the past global economic crisis.

Traditional airlines are becoming more and more similar in strategy with the budget airlines, using extended service offerings.

The future trend in the hotel industry looks similar to the above mentioned, more and more hotels are charging for extended services.

Industry forces

The competitors are other companies doing the same as Opodo, like ebookers etc. But it’s also the hotels, fly companies, car rentals and travel agencies.

The new entrants in the market are the travel companies focusing on new technology to use in the industry. (As we identified in key trends)

It can also be some alternative travel agencies for the costumers there want to experience unusual destinations and more challenging activities when traveling.

Workers – employees. Important to keep the good relationship with the customers.

Shareholders – the biggest are: Amadeus 55.36% and Air France, British Airways and Lufthansa 10.24% each.

As well the IATA has made a promise to cut the carbon dioxide emission by 50% unto 2050.

Macro Economic forces

Oil price increasing which leads to more expensive flight tickets. This is a vital factor since the cost of fuel stands for 1/3.

From the start of 2012 the EU airlines will need to pay for their emissions. Which can lead to more expensive air travel.

Market forces

The major key issue for Opodo is the huge shift in the way consumers have to search and book their travel.

The biggest growth potential is in the leisure segment ( arrow from the key trends to the market segment)

Because of the costumer’s opportunity to compare prices on the net, it’s important for opodo to keep searching for the best package for their customers.

The switching costs are high because of the key issue described in the “market issue”.

Because the costumers easily can find and purchase cheaper products and services, the largest margin for Opodo could be archived in the relationship to the customers. To hold on to the loyal customers they have to keep developing the good relationship with both the business and the private customers through customer contacts and services and their customer club.

Further trends in the airline industry is increased demand for employees and airplanes. Which indicates of a good future for airplain makers such as Airbus and Boing. The increase demand is mainly due to population growth (forecast of twice as many will be flying in 20 years). However, the profit margin for the industry lie only around 1% and are expected to decrease in 2012 to 0,8% because of oil price and country crises. Business customers are declining.

References
Opodo homepage
Ovum
Dagens Industri
IATA

eBusiness - Travel Industry