Having established a good name and profitable business operation in Australia, Wotif.com's logical choice for expansion is its neighboring country New Zealand. The proximity of the nations is considered very strategic because the target markets are the almost alike or the same. And since buyers are almost always looking at the proximity of these countries, they somehow consider buying from one or the other. Another is that since Wotif.com is very near New Zealand, customers who are aware of its services in Australia, most could also be aware of them in their neighboring country. Venturing in farther and highly unknown markets like North America, Western Europe or China did not become an option as these markets are already controlled by other huge players. The great distance and different consumer culture will also post additional challenges.
In the merchant model, the companies buy the properties like hotels and others at a wholesale price, charge a sensible markup and sell them to customers. However, in the commission based model like the one employed by Wotif.com, its responsibility is solely on the provision of a venue where buyers and sellers can transact. The prices are set by the merchants and it gets a certain percentage of the price that the properties are sold. Noting that properties are not liquid and often requires high payment prices, a company operating on commission based model is more likely to succeed as it entails less risk and is assured of commission when the merchant sells.
4. Using appropriate diagrams illustrate the supply chain for online companies such as Wotif.com, eBay, Dell Computers and Amazon.com. Identify the similarities and the differences between the business models. (8 marks)
Wotif.com is the same as eBay since they create value by providing venue for buyers and sellers to transact. They both profit from having a fee to post merchandises and commission to some items. Dell is a manufacturer which distributes its products directly to customers and is employing a significantly different business model from Wotif and eBay since its sets its price. For Amazon, it functions as an online store carrying merchandises from other manufacturers.
1. How has Wotif.com maintained its competitive advantage in the marketplace (4 Marks)
Wotif.com maintained its competitive advantage in the marketplace by continuing its quest of becoming the lowest cost provider of venue for merchants and buyers of properties. Another is by safeguarding its position as the most profitable and respected business organization in the online accommodation market through strategic pricing strategy and efficient business model.
2. Why would Wotif.com choose New Zealand as their first international market when there are potentially more lucrative markets in North America, Western Europe or China (4 Marks)
Wotif.com's decision of conquering its neighbor New Zealand instead of huge yet unknown markets like North America, We