Business Plan Analysis of a New Venture for an Online Travel Accomodation Reservation Service

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Business Plan Analysis of a New Venture for an Online Travel Accomodation Reservation Service View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Simon Fraser University Institutional Repository BUSINESS PLAN ANALYSIS OF A NEW VENTURE FOR AN ONLINE TRAVEL ACCOMODATION RESERVATION SERVICE by Bernadett Maxwell PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION In the Faculty of Business Administration © Bernadett Maxwell, 2011 SIMON FRASER UNIVERSITY Spring 2011 All rights reserved. However, in accordance with the Copyright Act of Canada, this work may be reproduced, without authorization, under the conditions for Fair Dealing. Therefore, limited reproduction of this work for the purposes of private study, research, criticism, review and news reporting is likely to be in accordance with the law, particularly if cited appropriately. Approval Name: Bernadett Maxwell Degree: Master of Business Administration Title of Project: Business Plan Analysis of a New Venture for an Online Travel Accommodation Reservation Service Supervisory Committee: ___________________________________________ Mark Frein, Adjunct Professor, Faculty of Business ___________________________________________ Colleen Collins Associate Professor, Faculty of Business Date Approved: ___________________________________________ ii Abstract This paper is business plan analysis for developing a niche online travel agency business. The entity is in the very early stages of setup, and the initial service will provide online reservations capabilities for accommodations and other services targeted to golf and ski activity based travellers. The paper examines the online travel agency industry, and performs a competitive analysis of the main competitors in the industry, as well as the niche players looking to capture a similar market niche. The paper also reviews market segmentation, and analyzes the behaviour and needs of the target market to determine if the development of this service will be a viable business. Lastly the paper examines the operational considerations of establishing the business to provide the services, and to operate the business successfully. Keywords: New business venture, business plan, online travel agency, OTA, travel reservation service. iii Dedication I dedicate this paper in loving memory of my father who saw great value in higher education. He provided support and encouragement to make it through the laborious times and provided inspiration to achieve my goals. One thing he always said was “you can never learn too much, but you can most certainly learn to little”. I also dedicate this paper to my children Chad and Lisa who have encouraged and supported me throughout this program and to my mother whose prayers and wishes are always with me. iv Table of Contents Approval .......................................................................................................................................... ii Abstract .......................................................................................................................................... iii Dedication ....................................................................................................................................... iv Table of Contents ............................................................................................................................. v List of Figures .............................................................................................................................. viii List of Tables ................................................................................................................................... ix Glossary ............................................................................................................................................ x 1: INTRODUCTION ...................................................................................................................... 1 1.1 Objective ................................................................................................................................. 1 1.2 Methodology of Analysis ........................................................................................................ 1 1.3 Business Concept .................................................................................................................... 2 1.3.1 Business Opportunity ................................................................................................. 2 1.3.2 Revenue Model .......................................................................................................... 3 2: INDUSTRY ANALYSIS ............................................................................................................ 4 2.1 Industry Background ............................................................................................................... 4 2.2 Industry Players ....................................................................................................................... 4 2.3 Industry Size and Profitability ................................................................................................. 6 2.4 Industry Value Chain .............................................................................................................. 7 2.5 Porter’s 5 Forces Analysis ..................................................................................................... 10 2.5.1 Industry Rivalry........................................................................................................ 11 2.5.2 Threat of New Entrants ............................................................................................ 11 2.5.3 Threat of Substitutes................................................................................................. 12 2.5.4 Supplier Power ......................................................................................................... 12 2.5.5 Buyer Power ............................................................................................................. 13 2.5.6 Complementors ........................................................................................................ 14 2.5.7 Impact of Technology .............................................................................................. 14 2.5.8 Government Regulations .......................................................................................... 14 2.6 Assessment of Industry Attractiveness .................................................................................. 15 2.7 Key Success Factors .............................................................................................................. 16 3: COMPETETIVE ANALYSIS ................................................................................................. 18 3.1 Competitors ........................................................................................................................... 18 3.1.1 Competitive Factors ................................................................................................. 19 3.1.2 Niche Market Competitors ....................................................................................... 21 3.1.3 Competitor Products Features and Content .............................................................. 22 4: MARKET ANALYSIS............................................................................................................. 25 4.1 Target Market and Segmentation .......................................................................................... 25 v 4.2 Product Segmentation ........................................................................................................... 26 4.3 Customer Segmentation ........................................................................................................ 27 4.3.1 Customer Groups...................................................................................................... 28 4.3.2 Activity Interests Segmentation ............................................................................... 29 4.3.3 Demographics Segmentation .................................................................................... 30 4.3.4 Buyer Behaviour ...................................................................................................... 34 4.3.5 Market Size and Trends ............................................................................................ 34 4.4 Customer Needs .................................................................................................................... 35 4.5 Strategic Positioning ............................................................................................................. 35 4.5.1 Strategy .................................................................................................................... 36 4.5.2 Positioning Approach ............................................................................................... 36 4.5.3 Target Segment Characteristics ................................................................................ 37 4.5.4 Position ..................................................................................................................... 37 4.6 Market Entry ......................................................................................................................... 38 4.7 Marketing .............................................................................................................................
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