Innovation Tools - Skyscanner

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- Literature Review

- Skyscanner

According to Skyscanner.net (n.d.), Gareth Williams, Skyscanner’ CEO, was very interested about computer as a teenager. He went on to study mathematics and computing at Manchester University. On his first day of the course, he met Bonamy Grimes and Barry Smith (who went on to become Skyscanner co-founders) and they bonded over music and computer code.

Graduating and going on to work as a ‘programmer for hire’, Gareth became frustrated with the difficult and tedious process of having to search multiple airline and travel agent websites to find the best flights to visit his brother who was living in France. Based on this, Gareth thought in a way that he could collect, collate and compare prices for every commercial flight in the world. From a simple excel spreadsheet Skyscanner.com was born. (Skyscanner.net n.d.).

Opening an office in Edinburgh, the Skyscanner site was officially launched in 2003. Skyscanner operates worldwide with offices in the UK, Singapore, Beijing, Shenzhen, Miami, Barcelona, Sofia and Budapest. It also offers travel searches in more than 30 different languages including Thai, Japanese and Russian. Skyscanner is the travel site of choice for independent travellers all over the world. (Skyscanner.net n.d.).

Although there is no extra fee to customers who buys tickets via Skyscanner, as it just connect the customer to the airline or travel agent, the airline or travel agent pay to Skyscanner a referral fee.

Skyscanner continues to grow by listening to its users and giving them what they want a travel website that is fast, flexible and finds the cheapest flights, hotels, and car hire, with no added fees and no fuss. (Skyscanner.net n.d.).

- Innovation Tools

Tools and techniques are indispensable for the process of innovation and analysis of company’s strategy, organization, management and so on. Besides that, they are fundamental to support decisions.

- SWOT Analysis

SWOT analysis is a management tool, which studies the internal and external environment of the company by identifying and analysing the strengths and weaknesses of the organization and the opportunities, and threats to which it is exposed. Although it seems simple, this method proves to be quite effective in identifying factors that influence the functioning of the organization and providing very useful information in the strategic planning process.

SWOT analysis is divided in two parts: the analysis of the internal environment where the strengths and weaknesses will be identified, and the analysis of the external environment, where are the threats and opportunities.

The company's internal environment is physical, human and financial, among others issues, on which it is controllable, as result of the strategies defined by management. Thus, it is possible to identify strengths, corresponding to the features and capabilities that together become a competitive advantage for the company over its competitors, and weaknesses that are the weaknesses that the company has compared to the same points of their current or potential competitors.

The external environment consists in factors that exist outside the organizational boundaries, but that somehow influence on it. This is about which there is no control, but that should be monitored continuously, since it is the fundamental basis for strategic planning.

- Porter’s five forces

Porter's Five Forces analyses and demonstrates the attractiveness of a particular market. Proposed by Michael Porter, the Porter's Five Forces aims to make it clear how each stakeholder influence, positively or negatively, in the business. The forces are: rivalry among competitors, bargaining power of suppliers, customers' bargaining power, threat of new entrants and threat of substitute products.

Competitive Rivalry: A market with high rivalry among competitors may not be attractive to some companies, Due to the dispute (between prices, advertising, sales promotion), profitability can decrease. A high rivalry can be observed when: Number of competitors are high; slow growth in the sector, with strong disputes for market share; stable or declining markets; segments in which the costs, fixed or stocks, are high; absence of product differentiation; reduced costs of changing suppliers or brand and; high exit barriers.

Supplier Power: When the number of suppliers in a determined market is small, the dependence of companies in relation to these suppliers can become a problem. The supplier can negotiate prices, terms and forms of payment, leaving the dependent company of the supplier's strategies, impacting profitability.

Buyer Power: Having customers with power in a negotiation also affects the profitability of a company. A customer has high bargaining power in common products without competitive advantage over competitors, when the cost to switch providers is small for that client or when buying in large quantities. Another factor, which influences consumer’s bargaining power, is the consumer knowledge about the product or its production chain.

Threat of New Entry: What limits the entry of new companies are the barriers to entry and exit, which are obstacles to the entry and egress of an institution in a market. The lower entry and exit barriers higher is the chance for new competitors to enter and leave this market.

Entry barriers can be: companies operating longer with economies of scale, which implies lower costs for active and higher for entrants; products with differentiation, causing the incoming company to have a greater communication effort; high initial investment; Switching cost perceived by consumers; difficult access to distribution channels, which means make your product reaches the consumer; government restrictions such as patents, licenses and even subsidies and; scarce raw material.

Exit barriers can be: high initial investment; shared facilities; government policies and implications; implications with the community and emotional barriers.

Threat of Substitution: According to the analysis of the five Porter forces, a product substitute is a product that can serve to fulfil the same need of the consumer. It does not compete directly with the product of the acting company, but in the near future, may cause customers of the acting company reduce or even end up.

Figure 2: Porter's Five Forces

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