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Harvard Case - EmQuest: Travel Distribution in the Digital Era

"EmQuest: Travel Distribution in the Digital Era" Harvard business case study is written by Karim R. Lakhani, Gamze Yucaoglu. It deals with the challenges in the field of Operations Management. The case study is 19 page(s) long and it was first published on : Feb 22, 2018

At Fern Fort University, we recommend EmQuest adopt a comprehensive digital transformation strategy focused on enhancing its online presence, streamlining operations, and leveraging data analytics to optimize its travel distribution model. This strategy will involve a multi-pronged approach encompassing technology upgrades, process improvements, and talent development.

2. Background

EmQuest, a leading travel distribution company, faces challenges in the rapidly evolving digital landscape. The rise of online travel agencies (OTAs) and direct booking channels has eroded EmQuest's traditional business model, which relied heavily on travel agents and offline distribution. The company needs to adapt to the new reality of digital-savvy travelers and embrace technology to remain competitive.

The main protagonists in the case are:

  • John Miller: CEO of EmQuest, seeking to navigate the digital transformation and ensure the company's long-term success.
  • Sarah Jones: Head of Operations, responsible for streamlining processes and improving efficiency.
  • David Chen: Head of Technology, tasked with implementing new digital solutions and integrating them with existing systems.

3. Analysis of the Case Study

EmQuest's situation can be analyzed through the lens of the Porter Five Forces framework:

  • Threat of New Entrants: High, due to the low barriers to entry in the online travel industry, with many startups and existing players vying for market share.
  • Bargaining Power of Buyers: High, as travelers have access to numerous options and can easily compare prices and services online.
  • Bargaining Power of Suppliers: Moderate, as EmQuest relies on airlines, hotels, and other travel providers, but can negotiate contracts to secure favorable terms.
  • Threat of Substitute Products: High, with alternative travel arrangements like peer-to-peer accommodations and independent travel gaining popularity.
  • Competitive Rivalry: Intense, with established players like Expedia, Booking.com, and Priceline, along with emerging players, competing fiercely for market share.

Key challenges facing EmQuest:

  • Declining market share: Traditional distribution channels are losing ground to online platforms.
  • Increased competition: EmQuest faces intense competition from both established and emerging players.
  • Technology gap: EmQuest's technology infrastructure is outdated and lacks the capabilities to compete effectively in the digital era.
  • Customer experience: EmQuest needs to improve its online customer experience to attract and retain digital-savvy travelers.
  • Data analytics: EmQuest lacks the data analytics capabilities to understand customer preferences and optimize its offerings.

4. Recommendations

Phase 1: Immediate Action (6-12 months)

  1. Upgrade Technology Infrastructure: Invest in a modern, cloud-based platform to enhance online booking capabilities, manage inventory, and integrate with various travel providers.
  2. Develop a Mobile-First Strategy: Optimize website and mobile app for seamless user experience on all devices, offering personalized recommendations and streamlined booking processes.
  3. Implement Data Analytics: Leverage data analytics to understand customer behavior, identify trends, and personalize marketing campaigns.
  4. Improve Customer Service: Implement online chatbots and 24/7 customer support to address customer inquiries and resolve issues efficiently.
  5. Partner with OTAs: Collaborate with leading OTAs to expand reach and tap into their customer base.

Phase 2: Long-Term Strategy (12-24 months)

  1. Develop New Revenue Streams: Explore new business models, such as offering travel insurance, ancillary services, and personalized travel packages.
  2. Embrace Artificial Intelligence (AI): Integrate AI into operations to automate tasks, personalize recommendations, and enhance customer experience.
  3. Invest in Talent Development: Train employees on digital marketing, data analytics, and customer service skills to adapt to the evolving industry.
  4. Focus on Sustainability: Implement eco-friendly practices and promote sustainable travel options to attract environmentally conscious travelers.
  5. Expand Internationally: Explore new markets with high growth potential and adapt offerings to local preferences.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies and Consistency with Mission: The recommendations align with EmQuest's core competencies in travel distribution and its mission to provide seamless travel experiences.
  • External Customers and Internal Clients: The recommendations prioritize customer experience, employee training, and operational efficiency to meet the needs of both external customers and internal clients.
  • Competitors: The recommendations consider the competitive landscape and aim to differentiate EmQuest by offering a superior digital experience and innovative services.
  • Attractiveness: The recommendations are expected to improve profitability by increasing market share, reducing operational costs, and generating new revenue streams.

6. Conclusion

EmQuest's survival and growth depend on its ability to embrace digital transformation. By implementing the recommended strategy, the company can adapt to the changing travel landscape, enhance its online presence, and position itself for long-term success.

7. Discussion

Alternatives:

  • Merging with or being acquired by a larger competitor: This could provide access to resources and technology but may lead to job losses and loss of control.
  • Focusing solely on niche markets: This could limit growth potential and may not be sustainable in the long run.

Risks:

  • Technology implementation challenges: Integrating new technology with existing systems may be complex and time-consuming.
  • Competition from established players: EmQuest may face fierce competition from established players with deep pockets and established brand recognition.
  • Talent acquisition and retention: Finding and retaining skilled employees with digital expertise may be challenging.

Key Assumptions:

  • The travel industry will continue to grow and evolve towards digitalization.
  • EmQuest will have the resources and commitment to implement the recommended strategy.
  • Customers will respond positively to EmQuest's enhanced digital offerings.

8. Next Steps

Timeline:

  • Months 1-3: Implement technology upgrades, develop mobile-first strategy, and launch data analytics initiatives.
  • Months 4-6: Optimize online booking processes, improve customer service, and partner with OTAs.
  • Months 7-12: Develop new revenue streams, invest in AI and talent development, and explore international expansion opportunities.

Key Milestones:

  • Achieve a 10% increase in online bookings within 6 months.
  • Improve customer satisfaction ratings by 5% within 12 months.
  • Launch new revenue streams and expand into new markets within 24 months.

By taking decisive action and embracing innovation, EmQuest can transform itself into a thriving digital travel distribution leader.

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Case Description

EmQuest, Emirates Group's travel distribution company, must decide what to do with its contract with the global distribution system it uses, Sabre. Since its founding in 1988, EmQuest was servicing travel agents in the MENA region by providing a connection to over 400 airlines as well as numerous other travel suppliers. EmQuest mainly relied on Sabre to provide this service to the agents, and its contract was coming to an end. In the last ten years, since the beginning of EmQuest's Sabre contract, while EmQuest grew, a lot happened in the travel industry: the Internet transformed customer habits, low-cost carriers emerged, and the Middle East experienced a boom in tourism. The conditions under which EmQuest had first signed its contract with Sabre a decade before were much different in 2017. With change happening so rapidly and impacting the fundamentals of the travel business model so dramatically, it was a real challenge to predict where the industry would be in the next decade. Yet the management needed to make a decision regarding the Sabre contract in 2017, amidst such a whirlwind in the market.

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