Group A: Session 3 Min Jung Kim Alissara Jayaphorn Jessica Ai-Chuan Chou

1. Rivalry Among Competing Firms STA travel is competing against many on- line/off-line travel agencies. Well-established on-line agencies such as expedia.com, hotels.com,cheaptickets.com are the main competitors although within the student travel agencies STA travel is the dominant company. The exit barrier for on-line travel agencies is low because of low initial investment. Thus, the competition between the .com travel agencies is intense. STA travel has over 20 web sites that enable visitors to book flights, hostels and rail or bus travel online or book appointments with in- store consultants, as well as access informative editorial on gap years, tours and destinations. STA travel’s success rests on three pillars: a high profile in target markets, employees who provide peer-to-peer advice to customers and a product range that matches the price/performance expectations of its customers.

STA travel customers likely to visit other on-line travel agencies to compare. Compare to Expedia.com, hotels.com, cheaptickets.com, and easyjet.com statravel has the lowest number of people visiting its website daily.

2. Potential Entry of New Competitors STA travel is specialized in the student travel industry since 1979 and is recognized as a global brand in particular by its target customers. With a global distribution network, STA travel is today the largest specialist in the student and youth sector. STA travel employs some 2,400 people in 17 countries, and works with franchisees and licensing partners in 73 further countries. Thus, new comers are to pay for the experience cost when competing against STA travel. A few of the on-line travel agencies are more favored by consumers and have gained a strong brand loyalty/brand recognition. However, STA travel is the largest student travel organization and the preferred travel company for over 6 million people worldwide. STA travel has gained competitive advantages of strong relationships with vendors and proprietary know how, which result in lower average costs. Thus, it enjoys absolute cost advantages over new comers.

STA travel knows what students want and is dedicated to providing a quality travel experience to each and every customer. STA travel’s employees are young, dynamic and knowledgeable individuals who are passionate about travel. STA travel recognizes the need for convenience in a student’s busy life; STA travel provides a combination of outlets suited toward students’ needs. Retail locations (http://www.STA travel.com/fine_a_branch.htm) 24-hour call center Online : http://www.statravel.com/ Interactive Social Community http://www.statravelers.com/)

STA travel core products and services : One-stop shop for every student’s travel needs. Student airfare: The exclusive STA Travel Blue TicketTM provides students with competitive airfare pricing and unmatched flexibility and ease when booking their travel. Land product: STA travel distributes over 1,500 global land products making it clear and simple for students to plan their trip; From accommodation, tours, work, study and volunteer programs. Discount cards: The international Student Identity Card (ISIC) provides access to over 35,000 international and domestic discounts including airfare, accommodation, tours, shopping, dining and entertainment with partners such as Target.com, Apple Store, Virgin Megastore and The Body Shop. Student travel loans: Travel loans are made easy and accessible courtesy of MYRICHUNCLE, an innovator in student loans.

Travel insurance: Insurance coverage is offered for trip, baggage, medical and accident protection as well as providing 24-hour worldwide emergency assistance.

International cell phones: Provide students an easy and cost effective way of keeping in touch with friends and family while touring the world. Online visa application: With its exclusive partnership with VisaHQ.com, STA travel customers now have access to timely, online visa application services at competitive rates. By logging onto http://statravel.visaheadquarters.com/visas.php, students can apply for new visas as needed by accessing their profile through a secure online account. This service reduces the average application time from 30 minutes to two minutes compared to other passport and visa services. Additionally, the online service allows STA Travel customers to track application status online 24/7 and receive real-time electronic updates.

3. Potential Development of Substitute Products Travel industry is in a very competitive market in terms of the quality of service, price and variety of offerings. There is no potential substitute for travel agencies’ services. However, the market itself is extremely price- competitive; thus, there is a very limited opportunity of raising prices for STA travel.

4. Bargaining Power of Suppliers STA Travel depends solely on their wide base of powerful primary suppliers: with 10,392 of airlines, hostels/ hotels, cruises, packages, activities and car rentals. (Ie: Most popular used: British Airways, discount on Eurostar.) *sta.com - STA also offers many add-ons: giving their clients special discount deals with suppliers like overstock.com, ASA (Academic Studies Abroad) and Virgin Megastore and TravelEx Currency Exchange. *http://www.statravel.com/cps/rde/xchg/us_division_web_live/hs.xsl/Student-Specials.htm

STA also longstanding suppliers that give additional discounts to accommodate the STA client, such as discount railway tickets (Eurail Global Pass), discount phone cards, and the ISIC IYTC card that allows for global discounts. *http://www.statravel.com/cps/rde/xchg/us_division_web_live/hs.xsl/discountcards.html - STA also have important secondary suppliers, the main two are the oil distributors that affect the prices of airline tickets, and their own STA workers, who nurture and expand their client base. *www.findartices.com/p/articles/mi_m0EIN/is_2006_March_8/

5. Bargaining Power of Consumers Internet business or E-commerce enables consumers knowledge to increase due to availability of pricing information known as price transparency. With an increasing number of travel sites claiming to have the lowest fares or hotel rates, consumers have learned that no one site consistently has the lowest prices. A research surveys shows that 90 percent of consumers search more than one site before booking a trip online. By operating large portion of its business online, STA’s switching cost for buyers is relatively low. Consumers can compare STA’s offerings with other online suppliers such as expedia.com, and cheaptickets.com to come up with the best purchase price.

51% of STA’s consumers are ages between 18-34 (young adults) 45% of them consist of college students Young adults tend to have low brand loyalty, and brand equity. They tend to make their purchasing decisions mainly base on price.

External Factor Evaluation (EFE) Matrix

Internal Factor Evaluation (IFE) Matrix