Big Data and Tourism in the Context of Globalization

 

1 Globalization and the Impact of Globalization

1.1 Globalization

 

Globalization is the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture.[i] Advances in transportation and telecommunications infrastructure, including the rise of the telegraph and its posterity the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities.[ii]

The term globalization has been increasingly used since the mid-1980s and especially since the mid-1990s.[iii] The concept of globalization 'emerged from the intersection of four interrelated sets of "communities of practice": academics, journalists, publishers/editors, and librarians.' [iv] Economists were central in this early stage. In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge.[v] Further, environmental challenges such as climate change, cross-boundary water and air pollution, and over-fishing of the ocean are linked with globalization.[vi] Globalizing processes affect and are affected by business and work organization, economics, socio-cultural resources, and the natural environment.

1.2 Impact of Globalization

From the above summary of globalization we can see that globalization has already impacted many different aspects in our lives, e.g. in terms of politics, economics, culture, environments and technologies, etc.

What I would like to focus in this article are mainly on the following aspects:

1.2.1 In Terms of Economics

Economic globalization primarily comprises the globalization of production and finance, markets and technology, organizational regimes and institutions, corporations and labour.[vii]

On the one hand globalization has radically increased incomes and economic growth in developing countries and lowered consumer prices in developed countries, on the other hand it also changes the power balance between developing and developed countries and has an impact on the culture of each affected country. And the shifting location of goods production has caused many jobs to cross borders, requiring some workers in developed countries to change careers. This has caused more connections between different regions of this world.

1.2.2 In Terms of technologies

Globalization also accelerates the change of technology. Every day it seems that a new technological innovation is being created. The pace of change occurs so rapidly many people are always playing catch up, trying to purchase or update their new devices. Technology is now the forefront of the modern world creating new jobs, innovations, and networking sites to allow individuals to connect globally.

Under the influence of globalization, the emerging technology - Big Data Technology, has been applied to various industries around the world rapidly. SOCAP defines Big Data as “the productive use of data in units of measure that far exceed megabytes and gigabytes.” While this is a broad definition, the idea behind Big Data is crystal clear: use the information that customers are already generating to provide them with better, more targeted – and ultimately more profitable – services and products.

1.2.3 In Terms of migration and movement of people

As the globalization began to develop faster and faster, the migration and movement of people between different countries became more and more often. People employed by multinational companies and connected through a global system of networking and production, immigrant workers, transient migrant workers, telecommuting workers, and those in export-oriented employment or contingent work and other precarious employment need to travel more, due to the impact of globalization. And the others moves to other countries, due to better living conditions, better education, better medical care, more ssecurity or family links.

These increasing movements have brought huge opportunities for the tourism industry, especially airlines and car rental companies, etc.

2 Globalization and tourism

Tourism involves flows of goods, services, and people on a global scale. Therefore we could say that it is a visible expression of globalization itself. The global aspect of tourism processes makes some of the aspects of the tourism market more intensive and at the same time of a broader scope – competition, protection of cultural resources, dependence on external entities, demands for market information. Under these circumstances internationalization is becoming a main strategic option of tourism development for tourism companies. How to compete on a world stage, how to overcome long distance and reach people who have purchasing power and desire to travel require global perspective and technology.

Globalization presents tons of opportunities for tourism industry, such as cheaper and faster transportation, more cultural exchange stimulating desire to learn other cultures, more information tools for planning a trip far away from home. With the fast growth of information technology and its application in tourism industry, the efficiency and service quality have been greatly increased. New information technology like big data has provided more possibilities for each player in the industry, which could be challenges as well.

3 Big Data and Tourism in the context of globalization

We are going to examine how Big Data could make a difference for 4 different players in the tourism industry as follows:

3.1 Big Data and Car Rental Industry

One of the industries which benefitted most from the growing globalization is car rental industry. The increasing transnational business activities and the increasing migration and movement of people have played a significant role in the growth of global car rental industry. According to a new market report published by Transparency Market Research "Car Rental Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2013 - 2019," global car rental market was valued at USD 36.89 billion in 2013, growing at a CAGR of 13.6% from 2014 to 2019 to account for USD 79.46 billion in 2019.[viii] Today, the market is expanded and diversified not only in developed countries but also in the emerging economies, such like India, Brazil and China etc.

In the present scenario, car rental industry has become very technologically oriented. And Big Data Technology becomes a big support for the modern Car Rental Industry gradually.

3.1.1 Company Hertz as a good example

With over 8300 business locations in 146 countries globally, company Hertz is one of the world’s largest car rental companies. Recently it started to work together with IBM (e.g. company Mindshare, an IBM Partner) to use IBM data analytics tooling (driving by the big data technology) and has obtained in a short time frame a competitive advantage over its global competitors.

Before the cooperation with IBM, Hertz has traditionally kept it's finger on the pulse of it's customers with customer satisfaction surveys. And what’s the problem? How should Hertz analyze all these information and understand what customers were trying to tell them through these surveys?

“Hertz gathers an amazing amount of customer insight daily, including thousands of comments from web surveys, emails and text messages. We wanted to leverage this insight at both the strategic level and the local level to drive operational improvements,” said Joe Eckroth, Chief Information Officer, the Hertz Corporation. Mindshare, a partner of IBM, realized there was an opportunity for Hertz: not only could the company address its need to understand its customers better, but also how it could take efforts to enhance its relationship with its customers.

Here's how Mindshare helped Hertz to address it's customer satisfaction challenges and enhance it's customer engagement activities by using IBM’s big data analysis:

Ø Enhanced the manner in which Hertz gathered customer sentiment surveys by centralizing the process.

Ø Allowed Hertz's analysis to occur in half the previous time, giving the company the ability to respond quickly to customer’s feedback

Ø Provided Hertz insights which allowed it to take immediate action on problem areas

Here is an example - while evaluating the solution, Hertz was able to identify a potential area for improvement in Philadelphia: surveys indicated that delays were occurring for returns during specific times of the day. By investigating this situation, Hertz was able to quickly adjust their staffing levels at the Philadelphia office during those peak times, ensuring a manager was present to resolve any issues. This enhanced Hertz's performance, and increased customer satisfaction, all by parsing the volumes of data being generated from multiple sources. This tangible example of Big Data providing real returns, convinced Hertz to move forward with the IBM/Mindshare Big Data solution.[ix]

3.1.2 Some other areas that Big Data can be helpful for Car Rental Industry

Big data can also be helpful for Car Rental Industry in following aspects:

Customer Relationship

After the emergence of big data technology, by combining internal and external databases like rental history, purchasing history or spending habits with publicly available information, car rental companies can learn a whole lot about their customers’ preferences on a macro level easily.

They can then recommend suitable vehicles for their customers according to their previous car choices as well as according to the recorded rental places and time periods. Thus the customer relationship will be improved and more business profit can be achieved.

Vehicle Management
With the support of big data technology, car rental companies can allocate and arrange their vehicles better and more efficiently. For example, by using the big data analysis, a car rental company can know it easily what type of vehicles would be preferred by what kind of customers in which country / in which place (e.g. at airport or in the city, etc.). This allows the better usage of the internal resources of the car rental companies.

3.2 Big Data and tourism attraction companies

Big data technology is widely used by the tourist attraction companies to expand its business and visibility in a global range. Regions, especially remote ones or third world where tourism is the pillar industry, more urgently need the assistance of Internet technology and big data application to get to know the industry, develop products and improve service. Moreover, big data technology also should be used to ensure the orderly operation of destination companies and safety of visitors.

3.2.1 Carrying ability prediction

Simply put, carrying capacity is a measure of the maximum number of tourists that can use a tourism resource (which could be a resort, beach, attraction, town or any other kind of tourism destination), when there is no emergency, like natural disasters or big political events. For a country with big population and strong needs for travelling during holidays, like China, it is wise for tourist destination companies to use big data to predict an approximate number of visitors in peak seasons in order to make transportation within scenic area, accommodation and other arrangement beforehand. We have bloody experience of “New Year's Eve Stampede in Shanghai”--- On December 31, 2014, a deadly stampede occurred in Shanghai, near Chen Yi Square on the Bund, where around 300,000 people had gathered for the New Year celebration. 36 people were killed and there were 49 injured, 13 seriously. If the administration of Shanghai stampede used big data to predict the number of visitors and took steps to limit the flowrate, the tragedy would not happen. But the reality is such events occurs time from time, in amusement parks, mountains, beaches, etc.

The precondition for making profits is to make sure all the customers can have a safe travel environment. No matter how beautiful the scenery is, how exciting your project is, or how unique the sight is, prediction and controlling of number of visitors is the priority. After guaranteeing the security of visitors, the comfort of tourists should be taken into consideration, such as the frequency of shuttle buses/cable cars with the scenic areas, the inventory of food and water, and so forth.

3.2.2 New business exploration:

Beyond simply managing and leveraging owned data streams, attraction companies need to consider how to use other indications of consumer preferences and lifestyles:

Take the photos being posted on social media, like Facebook and Wechat for instance. Would the traveler sharing snaps from a trip to Mount Huang be interested in information about Mount Lu? If shown on a mountain bike, would that individual want to know more about local biking destinations or biking services in scenic spots? If shown standing in front of a car with a bicycle roof rack, wouldn’t a trunk rack be easier to use and avoid back problems down the road?

Also, overall macroeconomic data and economic data from other industries also can offer clues for tourism development companies. For example, with the boost of health care industry in recent year, which means Chinese people are more and more health-conscious, the tourism companies can take the advantage of the trend to develop “Farm Stay” projects or “Hot Spring” programs. And a hot TV reality show could give your new idea to promote your companies, like the TV show “Dad, where are we going” breeds “Family Fun” programs, like family sports meeting, family pottery making.

Big data and data analytics suggest that the future may belong to those firms that are sensitive enough to shape and deliver the consumer travel experience.

3.2.3 Personalization with combination of information

5 years before, Chinese people were mostly satisfied by package tour, one tour guide, same routing, same accommodation. But now due to increasing number of middle-class and high-class people in China, more and more people ask for a more personalized travel plan specially designed for themselves. For tourism corporations, they are required to provide a wide range of activities to cater for different needs. However, the feasibility is still a problematic issue. The use of big data can be a problem-maker or a problem solver.

Personalization is a key tenant of Big Data. With so much available information about a particular consumer, transaction or destination, the reality is it is difficult to integrate and manage all the information and make a suitable plan for VIPs.

In order to most effectively win at true personalization, large tourism companies must work across different channels to gather the myriad data points created by a consumer.

Information systems can be quite fragmented and even territorial, with records pertaining to a single customer showing up in reservation, post sales complaint, survey, loyalty and other systems, with little or no ability to weave together and form a complete customer profile. Therefore, companies tend to rely on one source of information and make decision. For example, the popularity of biking is increasing but the reason behind the phenomenon is citizens’ health condition is disappointing. So if the company develops difficult and energy-exhausting project, probably it will not be a good choice. However, different people have different health condition, so how many plans they have to develop and how to set the level are the questions.

Combining data from different in-house systems can help companies achieve new insights and make right decision.

3.2.4 Learning from competitors:

Big data also shows the ranking among competitors and the reasons why some are hot and some are ignored by tourists. For example, in Jiangxi province, there are two beautiful mountains, one is called Mount Lu and other one is Mount Sanqing. Although they are both unique and magnificent, Mount Lu are far more famous than the latter one. One of the reason is an early popular color movie “Love on Lushan Mountian” was shot in Mount Lu and tells a romantic love story happened in the mountain. So using big data to investigate the reason behind the phenomenon, the company of managing Mount Sanqing finally understands that they lose not because of the scenery itself but the advertisement. Therefore, it is heard that the authority is working on making a film about Mount Sanqing.

Various rankings reveal the trend---What is hot and what will be hot, and show reasons behind phenomena---Why this tourist destination is well-known and why that place is only visited by professional traveler.

3.2.5 Privacy

Big data is double-edged sword. It helps tourists enjoy more customized and comfortable trips but also raise potential be to lose personal privacy. Actually, privacy is a paramount concern when it comes to Big Data. Avoiding privacy leakage is an essential component of successful Big Data implementation, and also ensures a significant level of trust on the consumer side.

3.3 Big Data and country tourism board
3.3.1 The role of country tourism board
Each country has a tourism board, or call it a tourism commission, administration, whatever. If you go to their websites, you could find introduction of the country’s culture, most famous scenes, transportation and accommodation details, even advertisements on some exhibition or promotion for certain activities. It almost looks like a travel agency’s website. However, in fact, a tourism board’s function is much broader than this.

So what does a tourism board do? Their main purpose of course is to maintain the sustainable and healthy growth of the country’s tourism industry. In the context of globalization, it also has the responsibility to promote the country’s culture and tourism services in the world market, as well as protect local culture and ecological environment. To be more specific, its main function includes:

1. Plan and coordinate the development of the tourism industry, setting up development policies and strategies. Of course after setting up the policies and regulations, it also need to supervise the implementation of those policies.

2. Communication and exchange in the global market, including organizing external publicity and significant promotional activities to promote and improve the country’s image.

3. Coordinating the development and protection of tourism resources on a country level. This includes instructing the layout and development of key tourism regions, destinations and routes.

4. Protecting interests of tourists and improving service quality of the industry. This includes setting up standards on tourism services and products.

5. Providing education and training services, collecting industrial data.

3.3.2 How big data could help country tourism boards to reach their goals

As we mentioned earlier, big data has provided new ways as well as challenges for each player in the industry, including the tourism boards. Let’s now examine how big data could help country tourism boards reach their goals.

First of all, although I put collecting industrial data in the last function of country tourism boards, it does not mean it is the least important one. In fact, it is the foundation of the implementation of all other functions of the country tourism boards. And this does not just start when big data emerges. Collecting and maintaining industrial data could said to be a traditional responsibility of country tourism boards. So you could almost imagine how much data they have accumulated through all these years. And how to make good use of these data becomes the natural question and even a great challenge for the tourism boards. Big data technology could address this problem perfectly.

Big data can help tourism boards understand tourists’ behavior and consumption habits in a much more organized way. For example, they could find out from the historical data the density of each tourism region and amount of consumption over years, including the changes and trends on different consumption categories. With these analysis, the tourism boards could make judgment on whether the development of each region is balanced enough. What’s more, with the knowledge of consumption habits and trends, tourism boards could make more scientific policies to lead more consumption in less developed regions.

In the global tourism market, big data could also play an important role on improving tourism boards’ effectiveness. For inbound tourism, which means the market where foreign tourists visiting the host countries, it is a bit similar with domestic market. Big data technology could help analyze the behavior and consumption habits of tourists from different countries. This lays the foundation for the tourism boards to formulate different policies for different countries. For example, from the historical data on visitors’ countries of origin and their tourism destinations, tourism boards could find out what kind of tourism destinations is more attractive to certain countries’ tourists. And they could make targeting marketing strategies or promotion in those countries. Another example could be the length of stay of different countries’ tourists in different tourism destinations. The analysis of these data could help the tourism boards better plan and organize tourism resources such as accommodation in different regions.

For outbound tourism, which means the market where host countries’ tourists visiting other foreign countries, big data could help to analyze host countries’ tourists behavior and consumption habits as well. For example, there are lots of reports recently on Chinese tourists’ inappropriate behaviors in foreign countries which raised international attention. Big data could provide more detailed analysis such as whether certain behavior is due to misunderstanding of the local culture or misleading of the travel agencies. Such analysis could help the tourism board to design focused education programs for the people or training programs of the tourism agents. With the developing of the economy, Chinese people’s purchasing power also increased. Chinese tourists spend substantial amount of money on purchasing all kinds of products in foreign countries. By using big data technology, the Chinese National Tourism Administration can find out where did Chinese tourists spend their money on mostly and even predict their consumption trends. The analysis could then provide guidance for domestic Chinese providers for the way of improvement in order to attract more oversea consumption back to the domestic market. This is another good example of the application of big data for country tourism boards.

Big data also helps on tourists interest protection. For example, it can help to analyze the violation models of different tourism service providers. Tourism boards could then use these analysis to formulate relevant regulations to better protect tourists’ interests.

3.4 Big Data and airlines

The impact of Big Data to the airline ticket industry is from three perspectives: customers, agency and airline company.

3.4.1 For customers

The application of big data could help to reduce the expense on ticket. With globalization people go out for traveling become more and more often, so airlines also developed very fast during these years. Stand on the client perspective, there is a common sense that it is cheaper if book the ticket earlier, however, the truth is it is not. As a product, airline ticket, for the same journey, same seats class, however the price is totally different. So some company developed a system to collect huge amount of price information of airlines and have those information analyzed which could be used to predict the trend of the price fluctuation. The most successful company is Forecast, the company have collected ten thousands billion price recording to predict the price of airline ticket and the precise rate is as high as 75%. It is estimated that the customer could spend less than 50$ for single ticket through the Forecast system. By using the system, the client could find that the price on Friday and Saturday is always high and sometime is very cheap which shows not the early the better.

3.4.2 For agents

The application of big data could help to provide customized products to each fragment market. With the globalization and development of transportation, the competition between agents is obviously higher and higher, so how to utilize the technology of Big Data become the advantage for many companies especially for those big OTA. By collecting the data, the agents could integrate whole consume chain products and reengaged to derivate new products and by tracing the consumption they could get the feedback immediately and response to the client quickly. Furthermore, with new technology of APP, the company could reach and cover every corner of the market and interact with the potential clients easily by pushing some promotion message and advertising, the customer could give their individual plan and requirements to the company by the tool easily. So with the technology, they could not only provide much more customized products and service to customer but also could do much better on interaction with the clients and do better clients service work.

3.4.3 For airlines company

To some extend the implement of Big Data in some place will reduce the profit of Airlines Company, however, airlines are striving to make fully use of their Customer Royalty Program as well by collecting the consumption data to provide services from miles exchange ticket to miles exchange commodities. Since the application of Big Data, the value of CRP is emerging like a cash bull that could generate continues cash. By collecting the data, the company could sell the miles to hotels, credit card companies and shopping malls, some leading company like Canadian Airlines even separate the CRP out and established a new company to IPO, some of them like Qantas sell part of the share to some other industry company (Woolworths) to get the trasindustry cooperation which have been a brand new business model give us big space to imagine.

4 Conclusion

After the emerging of Big Date, the industry have changed the logic of business development, some of them begin to think integration and segmentation rather than wait for the customer, if the Data could be utilized and new products and services are stimulated, thus they surly will become leading companies in the industry.

On the other hand, country tourism boards as government agencies, are entities traditionally function with rich data. Big data provides an innovative way to manage and make use of the rich data in a global context. However, whether they can successfully implement big data technology depends on a lot of conditions such as willingness, financial support, skilled personnel, etc.

We believe that with the great support of emerging technologies, especially the big data technology, the future tourism industry will become more and more efficient and convenient for the customers.



References:

[i] Albrow, Martin and Elizabeth King (eds.) (1990). Globalization, Knowledge and Society London: Sage. ISBN 978-0803983243 p. 8. "...all those processes by which the peoples of the world are incorporated into a single world society."

[ii] Stever, H. Guyford (1972). "Science, Systems, and Society". Journal of Cybernetics 2 (3): 1–3. doi:10.1080/01969727208542909.

[iii] Google Books Ngram Viewer: Globalization https://books.google.com/ngrams/graph?content=globalization&year_start=1900&year_end=2008&corpus=15&smoothing=3&share=&direct_url=t1%3B%2Cglobalization%3B%2Cc0

[iv] James, Paul; Steger, Manfred B. (2014). "A Genealogy of globalization: The career of a concept". Globalizations 11 (4): 424.

[v] International Monetary Fund. (2000). "Globalization: Threats or Opportunity." 12 April 2000: IMF Publications.

[vi] Bridges, G. (2002). "Grounding Globalization: The Prospects and Perils of Linking Economic Processes of Globalization to Environmental Outcomes". Economic Geography 78 (3): 361–386. doi:10.2307/4140814.

[vii] James, Paul; Gills, Barry (2007). Globalization and Economy, Vol. 1: Global Markets and Capitalism. London: Sage Publications.

[viii] https://www.linkedin.com/pulse/20140707102103-221228539-global-car-rental-market-size-and-share-2013-2019

[ix] “How big data is giving Hertz a big advantage”
www-01.ibm.com/software/ebusiness/jstart/portfolio/hertzCaseStudy.pdf

 

 

Big data in online travel industry

Big data in online travel industry

Big data defined

Everyone talks about big data nowadays, but what is Big data? The definition from Wiki is:

“Big data is a broad term for data sets so large or complex that traditional data processing applications are inadequate. Challenges include analysis, capture, curation, search, sharing, storage, transfer, visualization, and information privacy. The term often refers simply to the use of predictive analytics or other certain advanced methods to extract value from data, and seldom to a particular size of data set.”

The mainstream definition of big data as the industry analyst Doug Laney  articulated, contains three Vs: volume, velocity and variety.

• Volume, refers to the enormous volume of data we have now. It used to be a storage issue. However, now it is more about how to determine relevance within large data volumes and how to use analytics to create value from relevant data.
• Velocity. Data is streaming in at unprecedented speed and must be dealt with in a timely manner. Reacting quickly enough to deal with data velocity is a challenge for most organizations.
• Variety. Data today comes in all types of formats, which increase the complexity. Managing, merging and governing different varieties of data is important for many organizations.

To sum up, Big Data Technology can be treated as one of the most innovative technologies and Internet Tourism is also one of the emerging industries of this era. Thus, our question is will there be kind of unprecedented effect take place, if these two emerging issues are superimposed together?

The Impact seen

Nowadays nobody can deny that Big Data Technology as an emerging innovative technology has already facilitated the upgrading revolution of the entire tourism industry in very short time and it has also changed the business operation model of the tourism industry completely.

After the emergence of big data technology, by combining internal and external databases like purchase history or spending habits with publicly available information, the tourism industry, e.g. airlines, restaurants and hotels, etc. can learn a whole lot about their customers’ preferences on a macro level easily.

With the right approach, these airlines, restaurants hotels and travel agencies can use these information and insights to build connections with individual travelers and can be able to offer travelers the right service or products at the right time. Travel is such a fast-paced industry, which really drives the need for speedy data analytics and quick decisions. In tourism, any demands need to be addressed instantly in order to still be relevant for travelers, which makes big data so important.

In general, Big Data Technology has disrupted the old business model of the Tourism industry, and led to new ways of the personalized Internet Tourism.

Industry profile report on online travel and big data

With the development of internet and BIG DATA technology, the tourism industry has been changed a lot, as reported in the media, Chinese market now has 20% of growing annually in the industry mainly because the application of internet technology that make people go traveling much more easy and convenient.

OTA is the main business model in the industry which contribute about 60%-80% of the whole trading volume, other two business participants are online airplane ticket agent and online hotel agent. OTA integrated the whole product chain so it has advantage and agile price space to compete with other two competitors, however, online ticket agent and hotel agent also have advantage to keep the high level customer tightly.

For the industry, internet technology and BIG DATA brings reforming and new blood to the industry, through the new technology the industry can:

1. Integrate

Tourism product is an customer experience which is composed by many single products like transportation, tickets, restaurant, insurance and others, so online technology can integrate all the suppliers together. It is transparent and convenient for customers to choose.

2. Interactive

Before the customer make their buy decision, they can have a review online at what other have experienced, what’s their travel plan and how they feel about any provider in the supply chain, so after glance at the suggestions and tips on some topic, people can make their decision much reasonable. Furthermore, the provider also can put many video and 3d effective introduction online to make the products much clearer.

3. Derivatives

With the customer data the company collected, they can sort them out and analyze what they get. Most important one is the agent can track the consumption by contact with the customer by online or IM to get the hottest feedback of the experience, secondly, the company can provide customized products to its customers according to the preference and consumer power information that they have already tracked, thirdly, the company can also provide other products like online education, online insurance, online loan etc to its customers to enlarge the profit source.

The industry is developing very fast and appears dynamic to its customers, many emerging companies have come out with new technology and ideas to compete with those big giants, nowadays, the industry could be divided into those 3 types:

1. OTA

CTRIP and YILONG could be the typical representative which provide one station service to its customers, they also occupied the most of the market share.

2. PLATFORM FOR COPARING

Qunaer and Qiongyou could be the representative of this business modal which is an emerging segment of the industry to provide many products information online for customers to compare, some of them also focus on search engine for tourism products.

3. Vertical agents

This type of agents have very clear position on niche market and provide very customized products that could keep its customer tightly. Like tuniu, the company can provide unique products to customers.

We can forecast that with the implication of the technology, the competition in the new future will be higher and how to face the coming challenge is the key issue. For the OTA, the big giants have many advantages, how to fully use its customer data and integrate other resources in the product chain to provide more customized products is the most urgent thing for them, with the competition goes deeper, the market will be tailored into small segment, if anyone failed to cover any niche market it will be dangerous. So APP will be a very good tool to adapt the market, it can covered any corner of the market since the market have been become fragments. Ultimately, if the company can provide other services like online education, online loan, online insurance etc products, it will be another advantage for them to become even better.

Big data and Ctrip

In today's era of big data, how to do business flexible and intelligent data analysis and management, is the question many companies must focus on especially for Internet business enterprise. Who can effectively manage and use data, not only to the future of their business whether smooth continuous growth, but also related to the business can dig out more business value from vast amounts of data, which related to the business of life and death. Just like we have mentioned above, OTA can make the best of big data to develop some other businesses including online training or online financing.

Let’s cite one of the biggest OTA Ctrip as example. As one of the biggest leading OTA, Ctrip's business is cross offline, online and mobile platform. Users Behaviors, applications and log data are flushed from all those platforms. As its business grows, Integration of multiple data sources and knowledge pose growing challenge to the scalability of underlying data infrastructure, in which Ctrip captures and mines big data, and draws business insights.

Advanced technology, stress on high quality of service, economies of scale and building a popular brand are Ctrip’s four core competencies, which contribute to Ctrip’s rapid development. Although Ctrip emphasizes a lot on its technology development, it has a unique strategy for innovation. Ctrip is adopting the strategy of “Innovate scientifically and temperately” to develop its technologies. As an online travel agent, Ctrip’s operation heavily relies on rapid data throughput. However, take the rapid evolution of data processing technology into consideration, blindly investing in the data throughput technology innovation will place heavy fiscal burden on the company. While innovation under a scientific tempo could reduce the challenges from upgrading technology as well as control innovation costs effectively. Crtip’s embrace of big data took the same route.

The company recently merged two of its affiliates into a new company, which is setting up a new platform that focuses on big data analysis for the hotel industry.

This will be the first domestic hotel data platform in China. The new company will integrate the hotel industry's big data and cloud computing technology through its three main businesses, including software development, information channels and market intelligence. On the software side, the new company will provide property management systems to hotels. This will in turn help with the data collection and integration for the platform. Data are very important for hotels to understand consumer preferences and upgrade services, however, due to limited technology skills, hotels in China only collected data without analyzing or using them in the past. The new company will also launch a China Hotel Industry Index, which will include hotel satisfaction, hotel brand and hotel customer price intention indexes. The three main indexes will indicate the satisfaction rate, brand impact and consumer demand trends, respectively, in the hotel industry. These methodical inclusion of big data innovation would definitely enhance Ctrip’s leading position in online travel industry as the trend leader and standards setter, and will also reinforce its brand value.

There is a saying, “If you can solve customers’ problems, you can catch business opportunities.” Today, Ctrip is in an unique position to link user behaviors tracked in 3 different data sources and represent the same customer in a consistent, accurate and meaningful fashion. In the information era, consumers are presented with ever-increasing shopping paths to choose among more and more products. That has placed the burden of information processing, before they select which products meet their needs. As a result, the users need to spend more efforts. The need to reduce the effort of finding the right products is stressed from end users. In Ctrip, they are developing a model of measuring their users’ efforts to evaluate the shopping complexity and guide them to improve their products to achieve best user experience.

In Ctrip's daily business, they still have problems which needs tons of human efforts. For example, they need hundreds of operators to confirm millions of transactions with various suppliers every month. Thus they have issues of low efficiency, high cost and risk of losing revenue by human mistakes. But with the various types of collected data(user information, behavioral data, transaction, business data) as feature, they trained powerful GBM(Gradient Boosting machine) model to predict and classify the highly suspicious orders and "safe" orders. In this way, they can significantly improve the efficiency and reduce the cost and loss with Big Data techniques.

Big data technology also helps Ctrip to do several important predictions. For example, before “Chinese Golden Week”, Ctrip uses big data to get access of the booking amount of main scenic spots and accordingly makes some market prediction for the city governments and scenic spots regulators, which can assist them to make transportation, security and other plans beforehand. And also according to Ctrip’s calculation of hits of different tourism lines, it is also able to predict the popularity of them in the next quarter or year. Hence, by predicting function, the disruptive innovation of big data successfully add value to Ctrip.

In the face of fierce competition and complex economic environment, Ctrip needs to know better the needs of customers and market. How quickly identify potential business opportunities from these data which develop in line with users’ needs is a major challenge facing Ctrip.  Ctrip’s technology vice president Jiang Hao undisguised favor of the commercial value of the data to address the challenges faced by Ctrip. And building flexible and intelligent data platform is the only way.  Ctrip’s eyes are locked in Microsoft SQL Server 2012.

Microsoft SQL Server 2012 provides the basis for Ctrip data platform support and enhanced data capabilities, allows them to always quick step in the interpretation of their own needs and market demands in the process Microsoft SQL Server 2012 for Ctrip provides cloud computing for business intelligence and data warehousing platform era, which makes Ctrip more competitive in a highly competitive market environment.

Now is the time to consider how business on the commercial value of these large data is excavated. How to be a reasonable investment in scientific IT, deployment adapt their business development needs of enterprise data platform. Obviously, flexible, intelligent data architecture platform should to be chose to lend a helping hand to the OTA business.

Lessons from the case:

1. Big Data success requires scale and speed.

Hadoop can process a lot of data, but it is a batch process. In many industries and companies, like Ctrip, real-time decision making is no longer optional. Some experts aver that putting SQL on top of Hadoop or other Big Data stores enables organizations to actually use Big Data information in a timely way. As we all know, the competition of current market is extremely fierce. Fast speed means bigger possibility to occupy a favorable position due to the high sensitivity of the market. If an online travel agency can acquire information timely and make the best use of it, there is no doubt that customers are more likely to remember you.

2. Big Data access via mobile devices.

The latest generation of touch-enabled smart phones and tablets are driving a huge change in the way companies operate and communicate internally and with their partners and customers. Ignoring their demand for access to manipulate Big Data information and insights via their mobile device is a career-shortening decision for IT managers. So currently APPs begin to become a main source of business data and also an interaction platform for companies.

3. Matching and commitment are important

  Big Data offers approaches to release value from accumulated data in using innovative new technologies. Smart organizations can apply Big Data methods to solve existing business problems, implement new business models, and drive growth in innovative new ways. However, they have to find a way to move beyond their traditional ways and really match big data with their core competence. This is true especially for traditional companies which information technology is not their core competence. This requires very clear business vision, technical competence, and willingness to experiment in order to succeed. They should learn from Ctrip’s case to take the initiative and make the commitment to adapt big data into their core business model. Do not let the challenge become a real threat instead.

4. To build intelligent tourism

When big data applied in the industry, the company could combine the customer by promotion offlines informations on internet, such as discounts, booking etc, customers could find the offline chanel to get what they buy online. The model have developed very quickly which can help the company find the niche market and provide customized service to their customers by analyzing and utilizing the data. Big companies like Ctrip have the advantage of doing this because the company have already build a strong platform of online business, for other emerging company, they could cooperate with BAIDU, through data that the search company have to find where is the customer, what is they wanted and provide the service.

References:

http://en.wikipedia.org/wiki/Big_data

META Group. "3D Data Management: Controlling Data Volume, Velocity, and Variety." February 2001

Wang,  Huiyao, P.133, Globalizing China: The Influence, Strategies and Successes of Chinese Returnees, Emerald Group Publishing, 2012

http://usa.chinadaily.com.cn/epaper/2015-03/26/content_19918152.htm

The Fall of Motorola Pager

1. Industry analysis of Beeper/Pager

A Pager (also known as a beeper) is a wireless telecommunications device that receives and displays numeric or text messages, or receives and announces voice messages.

As an icon of 1990s technology, pagers had helped making the company Motorola one of the world’s biggest telecom giants. In 1942, Motorola was already the dominant leader of pagers, gaining as much as 85% market share. –For more than 40 years later on, the company was at the forefront of both the one-way numeric pager and two-way numeric pager markets.

1.1 Industry analysis during 1990s

The period of 1990s was the rise of the pagers. In the early 1990s, the paging industry demonstrated phenomenal growth. During this period, nine companies underwent IPOs, raising over $425 million. By 1996, pager service providers were considering network upgrades, hardware enhancements, and effective methods for ensuring widespread adoption by millions of new customers. Industry analysts were predicting that the number of pager users in America would top 50 million, or one fifth of the country’s population. 3 Hardware manufacturers like Motorola were partnering with the world’s largest pager service providers to bring customers the latest features in pager communication. The customer base for pagers had grown rapidly from medical and emergency personnel to parents and teens around the world..

1.2 Industry analysis from 2001 to 2014

After Motorola announced the end of its new pager manufacturing in 2001, many mobile carriers (e.g. China Mobile, China Telecom, etc.) in different countries had also closed their pager networks and services accordingly. And a number of smaller firms began to enter the market, Exhibit 1 indicates Pager Operators in the U.S. in 2001. Most of these small service providers provided both one-way and two-way paging.

 

Exhibit 1 – Pager Operators

Till today, pagers remain in use only in places where mobile phones typically cannot reach users, and in places where the operation of the radio transmitters contained in mobile phones is problematic or prohibited. One such type of location is a large hospital complex. Another is a facility handling classified information, where various radio transmitter or data storage devices are excluded to ensure security. 

2. Motorola promotes the technology globally

The name “pager” was first used in 1959 when Motorola Inc. made a personal radio communications product called a pager. So according to “Innovation Adoption Lifecycle”, it is easy to tell that Motorola Inc. is the innovator for this technology. They invented, first adopted beepers and dominated the world pager market for decades.

The first successful consumer pager was “Motorola's Pageboy I” first introduced in 1974. It had no display and could not store messages, however, it was portable and notified the wearer that a message had been sent.

By 1980, there were 3.2 million pager users worldwide. At that time pagers had a limited range and were used mostly in on-site situations for example when medical workers communicate with each other within a hospital. This time period was the growth stage for beepers.

By 1990, wide-area paging had been invented and over 22 million pagers were in use all over the world. In early 90s, Motorola began to sell a paging service, called Embarc, which allowed users of portable computers to receive messages, electronic mail and other information over radio waves. By 1994, there were over 61 million pagers in use and pagers became popular for personal use, even in developing countries, such as China and India. This period was at the business zenith.

However, with the market shock of mobile phones, pagers became to step down from the stage of history. Pagers gradually vanished in the market and few companies still make pagers, only existing in some niche markets.

 

Overall, Motorola played a leading role in the new innovation of pagers but the trend does not go a long way from begin to end.

3 The environment/market influences (why pager? why Moto?)

Pager was first developed for professional use. One of the first practical paging services was launched in 1950 for physicians in the New York City area. In 1960, Motorola’s chief engineer John Francis Mitchell combined elements of Motorola's walkie-talkie and automobile radio technologies to create the first transistorized pager.

Motorola started by producing radio systems for vehicles and later on mobile telephones for automobile. But these were large and heavy and, due to the amount of power they consumed, required the vehicle's engine to be running in order for the systems to be used. Also, although vehicles has some mobility, people still feel stuck with the cars just like with a wire beside the desk in their offices or home. The desire for real mobile communication, the freedom to be everywhere while communicating is the drive for paging technology (as well as the cell phones later on).

Walki-talkie is a portable two-way radio transceiver developed during the Work War II mostly for military use. Motorola is one of the earliest contributor to the technology. However, after the war, when the market called for portability, it is almost natural to combine the portable element of it and Motorola’s strong automobile radio technology to deliver the first generation of mobile communication tools. A pager is - if you think about it - a small portable private radio. Pagers soon gained popularity in the U.S. market especially among young people and became part of the pop culture.

Paging services were brought to China in early 1980s, when landlines are already somewhat popular. Pagers enabled people to be found anytime and anywhere. There is no longer the need to wait beside landline phones. This brought great convenience and make communication at work or with friends much more efficient. Motorola took its advantage in paging technology into Chinese market and gained great success during late 1980s and 1990s. 

4. Technology forecast done by the company

The technology forecast done by the company is that the pagers should allow the users to receive messages written in text, rather than a simple numeric page or coded message. These pagers should range from beepers with large enough storage space for receipt of e-mails or faxes to pagers that will display a single sentence. Some will even run the user’s favorite stock quotes in real time!

In addition, paging systems use radio waves to transmit or broadcast one-way messages. The pager itself is small, allowing for accessibility at all times, and can be carried or clipped to clothing. Each pager has a number, like a phone number, which the caller dials. The pager is then contacted, and informs the user that he/she is being contacted, with a beep, a vibration, or other signal. They can work with voice mail capabilities, allowing a caller to leave a message that the user can pick up at his/her leisure. Or, as mentioned above, pagers can display messages across their screens.

5. How the industry was led to astray

Pagers have many uses, not least of which is the ordinary user who wants to be reachable at all times, whether for personal reasons or due to work. Parents may rest easier leaving their children with a sitter if they have a pager on them; doctors can be paged in a medical emergency. Pagers are even used at restaurants such as The Cheesecake Factory, so customers can shop while they wait for their table. However after mobile phone appeared in the market, these functions were all concluded and Pagers have to get out of the stage.

 

The main reason of the failure of Pagers is that the industry (including company Motorola) failed to predict the huge competitive threat coming from the mobile phones, while the mobile phone technology was being developed very quickly. Therefore the pager industry missed the best time period to improve their technology to catch up with the new trend and as well as the user’s new need, and it has become more and more marginalized by the users.

6 Technical Opportunity should have been reached 

If the manufacturer of Pagers could do more homework on following task, the pager may still be a great success in some particular field. 

1- Niche market.

Actually pagers are still useful in some certain places, e.g. pagers were once thought of as a tool for drug dealers, and initially were most commonly used by medical personnel for emergency services. And Runners can use pagers that clip to their belts.
Amazon Inc.is still using pager in the workplace. There are three reasons leading to the anomalism. First, people tend to ignore the ring from messages of mobile phones since they normally receive tens of messages a day but only the coworkers would contact them with beepers. So the ring of beepers can even wake somebody sleeping up. Second, the system is more stable than smartphones’ system due to its simplicity. For example, when a sudden accident happens, telephone network is easy to break down because of the information traffic jam but pager system is a different story. Last but not least, the cost of pager is way lower than that of phones.
Therefore, “blue sea” still exists for pagers in business worlds.

2- combining with cellphone

One advantage of pagers as opposed to the cellular telephone is the ability to screen phone calls, thus not wasting airtime on an undesired call. (When the popularity of smartphone is not high.)Pagers are also used in combination with the cellular phone. More and more people are working from home or on the go. The pager is adapting to the needs of these companies and employees who must be mobile, yet in constant touch with the office.Worldwide reach is most likely the next step for the pager.

3- Smart functions

The pager’s technology can be used for miniature computers. As it stands now, they can operate as portable email receivers and fax machines. Computing will never be the same, as a pager becomes a personal computer on the go. Two-way pager technology is already being marketed, and its capabilities will surely be increased. Voice recognition papers and portable answering machines are currently being developed and marketed. Sky pagers, allowing paging worldwide and in the air, will become more common. All of these technologies are expected to become even more affordable as they gain wide acceptance. One of the most advantageous features of the pager is that it is compatible with other technologies. This indicates that the pager would probably not lose its popularity. Instead, it will be combined with other communication technologies to create new and better tools.

7-Lessons from the “flash in the pan”

1-“Quit or change”

If you cannot extend the life cycle of one product (like we have mentioned the new functions for pagers above), you would better switch to the right thing as soon as possible.

We can cite Chinese market for example. In 1983, the pager business entered Chinese mainland market and reached its peak at the end of 20st. However, in 2002, 90% drop of sales in the market still could not stimulated Motorola to make some changes both for the pager business and the development of smartphones.5 years later, it lighted out for pagers in China totally in such a tragic way. So if the managers in Motorola could be aware at first time that 3G smart phone is a trend and enormously strong substitute for pagers and even cellphone, they should have stopped or change the business.

2-Don’t listen to your customers without your own judgment towards future market

Motorola missed the fast movement to 3G. Sure, it did — but remember its biggest customers, the U.S. wireless carriers, didn't think they needed 3G technology. Hence, Motorola listened to its customers, when they should have been listening to its customers' customers. Sometimes, customers seem to be right all the time but remember in some cases they are not crystal-clear what they really want and what incentives genuinely drive them to pay the bill.

3-Technology changes faster today

It took us hundreds of thousands years to move forward from agricultural society to industrialization. However, it only took decades to brace the smartphone. Technology changes faster today than ever, therefore, companies need to think ahead, look further, adapt faster - at least, when hint of new technology emerges, do not ignore it! The falling down of lots of once well known Tech-giants is due to their complacency. Like Nokia, Kodak and Motorola, they have been so successful in their fields which made them blind to the fast developing threads. Or they thought they still had time, but in fact they do not! These are serious lesson to learn in today’s fast changing society.

References:

The Decline of Pager Technology http://faculty.tuck.dartmouth.edu/images/uploads/faculty/ron-adner/Pagers.pdf

The Decline of Pager Technology http://faculty.tuck.dartmouth.edu/images/uploads/faculty/ron-adner/Pagers.pdfhttp://www.cbc.ca/news/technology/telus-may-be-closing-its-pager-network-but-the-beeper-isn-t-dead-yet-1.2929237

Newsbytes, “Pager Market Up, Motorola Market Share Down,” August 11, 1997.

http://www.cbc.ca/news/technology/telus-may-be-closing-its-pager-network-but-the-beeper-isn-t-dead-yet-1.2929237

http://www.brophy.net/PivotX/images/brick_to_slick.jpg

http://www.brophy.net/PivotX/?p=john-francis-mitchell-biography

http://www.historyofthecellphone.com/people/john-mitchell.php

http://en.wikipedia.org/wiki/Pager

http://www.brophy.net/PivotX/images/brick_to_slick.jpg

http://www.brophy.net/PivotX/?p=john-francis-mitchell-biography

http://www.historyofthecellphone.com/people/john-mitchell.php
http://en.wikipedia.org/wiki/Pager