STA Travel Case Study Essay Example for Free

STA Travel Case Study EssayHistory/Situation STA Travel is a infantryman of a privately held comp either, Diethelm Keller Holding LTD, marketing as the valet de chambres largest student jaunt organization helping students travel in over 90 countries. Historically, STA utilized retail travel agencies located near or on college campuses however the Internet has introduced new online competitors. The internet is predicted to account for more bookings than offline alternatives. In response to STAs planetary customer base, STA delegated the responsibility to the local level while using an integrated information system to can orbiculate detain and solutions. STAs philosophy is local as possible, global as necessary. STA launched a business strategy, whiz Company, to align business operations with customer needs across the humanity. In support of this global standardization emerged BLUEe, a unified sales and booking system supporting every STA period of time of purchase backe d by a single network, infrastructure, finance and reporting system. STAs North American division developed STATRAVEL193.COM, an interactive website with video reports from STA customers about travel destinations. They also were the outset to explore the number Life (SL) marketing tool. STAs Global Webmaster, Craig Hepburn, also welcomed the SL idea however he knew it would be a tough sell to marketing departments in otherwise countries.STA had a two prong approach to utilize SL. One was to hold a movie making competition among SL residents which would highlight their practical(prenominal)(prenominal) existences. STA could then use the trounce of the videos to admit the services to the SL orbit as they do in the real world. The scrap element evolved into creating a separate orientation landing where new comers would be provided basic orientation information and then STA would drag them to exciting places in SL providing another opportunity to provide the services currently provided in the real world. level Nixon, Director of E-Commerce, STA Travels North America Division, needed to decide if STA should investment in SL. What is second life? SL is a realistic marketing tool which would provide STA a marketing presence in a computer-simulated virtual world. From the SL website, players can download client software for the game. Players are given a virtual self, an embodiment, and a second life. There is a process for new players to get setup with their avatar, name, account info, avatar accessories, orientation, and avatar skills before choosing to transport tothe mainland to begin their second lives.Players can purchase a premier membership post which provides players an opportunity to setup a business and participate in an economy exchanging US$1MM daily. Opportunities There was bullocky evidence of network effect in SL. By early 2007, on that point were over 3 zillion residents registered on SL, of which 700,000 had visited SL in the previous 60 days and 12,000-18,000 were typically on line at any given time. Also, real life (RL) businesses, brands and not-for-profit organizations began to explore their own second lives. STA has an opportunity to be one of the first to market in the virtual world travel category. In doing so, they can begin to form partnerships with other RL businesses. As more businesses residents join, STA can continue to deform their partnerships and advertising within SL. Problems SL is new technology and bill shows that technology has a short life cycle. There is risk that SL will not continue to grow long enough for STA to cash in on this significant investment. SL could also have a veto impact on STAs brand image if potential customers begin to identify STA with a virtual business and not a real life business that can provide real world travel services. STAs real world tax will be a key mensurable in measuring the impact of SL.Although, STAs SL approach simulates the services they offer in th e real world I think it will be difficult for residents to make the connection from STAs virtual world services to the real world services. Also, college students entrys are packed full with studies, work and socializing therefore absolute majority will not have time to maintain a virtual second life. Finally, the current retail travel agencies will likely resist the SL marketing tool because the success of SL represents lost commissions for the retail agencies. What figure of individuals make up the Second Life conjunction? What do you conceptualise will be the growing of Second Life and other Massive Multiplayer Online Role-Playing Game (MMORPG) in the near future? The primary users in SL are gamers and tech savvy individuals who spend a lot of time in at the computer. Those that pick out virtual reality often dont have a desire to travel the world for several reasons they dont like flying, leaving home, they cant afford it, or their schedule doesnt allow enough time. I don t believe the current SL users will explore out STAs real world services.I also dont believe there is an opportunity for STA to gain share through SL because those who enjoy traveling in reallife prefer to experience it in person not virtually. These two demographics are independent therefore the virtual players cannot provide a read on travel trends for the real life traveler. I also dont expect SL to continue long enough for STA to make any gains in market share. How do you send word that STA Travel should go about establishing a presence in Second Life? How can the home spawn the traffic needed for generating revenues? I struggle to find any basis for STA to move earlier with establishing a presence in SL which will appeal to their target audience and generate revenues. I believe there is a missing link between the virtual reality and the real world services. I also think STAs target audience will remain a minority in the SL virtual reality user community. Evaluate the Total Cost of Ownership (TCO) of this initiative.What would you propose to the executive team if you were insipid? Why? The SL actual costs not provided in this case, however the total cost of ownership moldiness include the following lease, setup, development, training of STA employees, maintenance, end of life, migration, integration with software programs, security, testing, data backup storage, insurance, marketing expense, global staffing to maintain site 24/7. I believe the cumulative cost of these categories will exceed the avail because. How would you evaluate the cherish of Second Life to STA? At this time, Id do not exhort moving forward on the basis that I do not find any quantify in SL. STAs target college audience is a minority in the SL user community. I evaluate the value of SL based on the projected increased revenue, profitability, market share and the risks or opportunities. The risks noted previously surpass any potential advantage SL may provide.Class MaterialOn line community- SL is a virtual reality community brought together by a common interest of wanting to escape reality. Pay for service- SL primary revenue model they charge a membership to users who want to upgrade and participate in the SL economy which exchanges US$1MM daily. Disintermediation- Historically STA utilized retail travel agencies, however the Internet introduced new online competitors. Market efficiency- STA online competition provides set about costs researching trips. Rather than physically going to the retail travel agent, consumers can search for pricing and approachability online. Two-way conversations- STA North Americahas an interactive travel blog where customers can post videos of their travel experiences. testimony I do not recommend SL because the risks exceed any gains that may exist. Also, there is not a link between the virtual and real world. I recommend that STA explore other online marketing opportunities.