Disruptive Innovation A Study of the Charter Industry Aalbrog Universitet – Culture, Communication & Globalisation 10th Semester, 2018 Master Thesis Supervisor: Peter Kvistgaard Anders Boelt NiKola Klasnic Acknowledgments We want to thank every interviewee participating in this thesis. Without you, this would not have been possible. Furthermore, we want to thank our supervisor, Peter Kvistgaard, for providing guidance that made this thesis to what it is. Special thanks go to: Lars Thykier, CEO of Dansk Rejsebureau Forening Peder Hornshøj, CEO of Bravo Tours Jan Vendelbo, CEO of Spies Terje Pedersen, Head of Digital Sales and Marketing at TUI Glenn Bisgaard, Head of Public Relation at Apollo Carsten Terp Hansen, Deputy Director of Suncharter Ejner Munk Svendsen, Trade Promotion Officer at Sparekassen Vendsyssel Martin Braun, Head of the Production Department at Sparekassen Vendsyssel Allan Brodersen, Digital Product Manager at TV2 Thorvald Stigsen, Founder of Momondo Tune Hein, Disruption Expert Abstract The past couple of years have witnessed a strong increase of passengers departing from Danish airports, while the number of charter passengers has stagnated, or even decreased during the same period. Different experts argue that the development is caused by disruptive online platforms and that the agencies within the Danish charter industry are threatened, whereas the CEO of Dansk Rejsebureau Forening claims that this is not the case and that disruptive developments have not been seen in the Danish charter industry since the emergence of the Internet. He furthermore adds that the agencies are not threatened and that these online platforms are just expanding the market. The thesis therefore, seeks to clarify how the travel has experienced disruption in past and if it is traceable today. Furthermore, it seeks to investigate how prepared Danish charter agencies are to handle disruptive innovations. The thesis initiates by giving an overview of the travel industry including the traditional charter agencies and the before mentioned online platforms. From this point on it presents the theory of Clayton Christensen and Hein and Honoré, which deal with principles of how to harness the principles of disruptive innovation. Throughout these theories, a unique thesis framework created and entails the principles of both aforementioned theories. The thesis framework consists of a section that aims to clarify what can and what cannot be identified as disruptive innovation and a section that provides guidelines to how a company can prepare themselves for a future disruptive innovation. The next chapter explains the account of method and continues into a section that is called “the digital scene”. This section initiates with an explanation of how industries has been altered by technological developments followed by a description of how digitalisation has had an impact on consumer behaviour and ending with an elaboration of how the online platform, Momondo, was created based on statements from the platforms founder, Thorvald Stigsen. From here on, the analysis begins and kicks off by analysing what can and what cannot be determined as disruption in the history of the travel industry. Moreover, the analysis continues by analysing the statements from the participating charter agencies with the uniquely constructed thesis framework. This leads into an overall assessment of the charter agencies preparedness and the thesis is concluded. Table of Content Introduction ................................................................................................................................ 3 Problem Analysis ......................................................................................................................... 4 Problem Statement ............................................................................................................................... 5 Setting the scene ......................................................................................................................... 6 The Travel Industry ............................................................................................................................... 6 Traditional Charter Agency ....................................................................................................................... 6 Global distribution systems (GDS) - Charter Flights & Hotels ................................................................... 7 Online Travel Agencies (OTA) ................................................................................................................... 8 Meta Search Engines ................................................................................................................................ 9 TripAdvisor ................................................................................................................................................ 9 Airbnb ..................................................................................................................................................... 10 Travel Tech Start-ups .............................................................................................................................. 10 Danish Charter Agencies ..................................................................................................................... 11 TUI Group ............................................................................................................................................... 11 Spies Rejser ............................................................................................................................................. 11 Bravo Tours ............................................................................................................................................. 12 Suncharter .............................................................................................................................................. 12 Apollo Rejser ........................................................................................................................................... 12 Account of theory ...................................................................................................................... 13 Clayton Christensen - Disruptive Innovation ........................................................................................ 13 The Definition of Disruption ................................................................................................................... 14 Harnessing The Five Principles of Disruptive Innovations ...................................................................... 16 Principle 1 - Companies Depend on Customers and Investors for Resources. ....................................... 16 Principle 2 – Small Markets Do Not Solve the GroWth Need of Large Companies ................................. 17 Principle 3 - Markets That Do Not Exist Cannot Be Analysed ................................................................. 17 Principle 4 - An Organisation’s Capabilities Define Its Disabilities .......................................................... 18 Principle 5 - Technology Supply May Not Equal Market Demand .......................................................... 19 Hein and Honoré - Disrupt or Die ........................................................................................................ 21 Globalisation ........................................................................................................................................... 22 Digitalisation – IT-enabling ..................................................................................................................... 22 Shared Economy ..................................................................................................................................... 23 Thesis Framework ............................................................................................................................... 24 The Thesis’ Definition of Disruption ....................................................................................................... 25 Harnessing the Seven Principles of Disruptive Innovations .................................................................... 26 Account of Method ................................................................................................................... 28 Epistemological Standpoint ................................................................................................................. 28 Research Design and Data Collection ................................................................................................... 30 Interview Techniques and Approaches ................................................................................................ 32 Content Condensing ............................................................................................................................ 33 Meta Matrix ........................................................................................................................................ 34 Limitations .......................................................................................................................................... 34 Clayton Christensen ................................................................................................................................ 34 Hein & Honoré .......................................................................................................................................