Expedia Inc. Ongoing problems, necessary capabilities and competences to improve the quality of the services it offers and impact of Kaizen and ISO 9000
Essay 2017 9 Pages
This report points out and discusses the ongoing problems being currently experienced by Expedia Inc - a company leader in the provision of online travel bookings. In order to test these aspects, a small research on the customers' reviews on the web site of Tripadvisor.co.uk was made. In line with the findings and the opinions of the customers of Expedia Inc, the extent to which the company has the necessary capabilities and competences to improve the quality of the services it offers was also examined. This report likewise highlights the impact that two of the most famous quality management techniques of Kaizen and ISO 9000 will have on the company. Their advantages and disadvantages in regard to the particular situation were discussed at the end.
The many problems triggered by the inability of a particular company to provide its customers with a quality relevant to their needs is what makes it experience certain problems. One of the most disputed concepts of "quality" can be defined " as a conformance to requirements" (Crosby, 1989), or according to the definition of ISO (1986) "quality is the totality of features and characteristics of the product or service that bear on its ability to satisfy stated or implied needs". As stated by Fitzsimmons et all (2014), customer satisfaction with particular service can be defined by comparing perceptions of service received with expectations of service desired.
Following the principles that define quality, there exist greater possibility for its mismanagement in many organizations. Although, there have been various types of evidences that Expedia Inc is a growing business, gaining huge amounts of money (Schwarzbaum and Ezra, 2017; Derrick and Jayson, 2017) the company experiences huge disapproval rates on part of its customers (Tripadvisor.co.uk, 2017). Hence, the present report highlights the major problems within the company. It also investigates whether and to what extent the company has the capacity to improve the quality, offered to its consumers. The report also aims at assessing the impact of two of the most popular quality management techniques of Kaizen and ISO 9000 on the company.
I. Expedia's currently experienced problems
As stated by Maillard (2013) quality is always a means of value-creation in any economic exchange. In fact, most of the examples related to poor quality in the tourism sector are connected with lack of adequate travel information and deteriorating quality of facilities and services.Talking about it companies need to be able to transform, quickly and constantly. In the regard of quality of the service provided and based on the customer's reviews on the web site of Tripadvisor.co.uk, Expedia in its capacity of a tourism services provider experiences the following problems:
1. Poor quality of the service and deteriorating standards;
2. Lack of trained staff able to solve customers' problems on time;
3.Lack of recent innovations, enabling the smooth provision of services to the consumers;
Talking about the poor service, provided by the company in most of the cases regarded it is concerned with the lack of empathy and ability to respond to customer's needs in an adequate and accurate manner. Theory of Johnson et all (2012) focuses on the idea that the service operations management incorporates providing services, as well as value, to customers or users, ensuring they get the right experiences and the aspired outcome. According to Blackmon et all (2013) quality has emerged as a major strategic factor due to the increased competition in a global scale, that in turn has given enormous amounts of choice and power to consumers. Going back to the fact that the customers of Expedia receive poor service and experience deteriorating standards suggests that the company lacks empathy and ability to respond in the appropriate manner to the customers’ needs and expectations.
The second problem of Expedia is tightly connected with the first one; simply put, the company lacks the trained employees, able to provide adequate advice on travelers in peril. No matter that fact but it is often misleading them, adding to the company's lack of reliability to provide the promised service and to perform it accurately. One of the reviews on the web site of Tripadvisor.co.uk reveals the following "DON'T EVER BOOK WITH EXPEDIA! The reason being that if you ever run into any problem with them, you will spend hours trying to get it sorted " (Tripadvisor, 2017). Kros and Brown ( 2012) suggest that the importance of the employees' factor within any industry is enormous, however the economy crisis hit most of the sectors. Notwithstanding the fact that adjustments were made, such as profit margins being squeezed, it appears that the human factor is still an issue in many industries (Kros and Brown, 2012). As active participants in the whole process of provision of tourism service to the end consumer, the Expedia staff should be trained to recognize, support and address in the proper manner the already deteriorated issues.
The third problem of Expedia, or namely the lack of recent innovations, enabling the smooth provision of services to the consumers is directly related to the second one. Therefore, staff training constitutes an essential goal of Expedia. Having in mind, the comments left by visitors on the web site of Tripadvisor.co.uk regarding the online travel booking site Expedia.com, it seems that the company's management does not realize the potential of the investments in the improvement of service. The latter, actually shows lack of assurance and ability to convey trust and service to its users. Again, according to Kros and Brown (2012) innovations in operations and the supply chain tend to be trustworthy and are generally low-cost. Nowadays, people working in the hospitality industry are well positioned to develop innovative operations and supply-chain oriented ideas (Kros and Brown, 2012).
The complexity and the interdependence of the problems currently being experienced by the online travel company Expedia does not mean that they are insolvable. Although the company is constantly receiving poor reviews, its activity is constantly growing and generating huge revenues ( Schwarzbaum, 2017).
II. The extent to which Expedia has the right capabilities and competences to improve the quality
To have the best chance for success and sustainability the online booking site Expedia.com must improve the quality of the services, being offered to its customers. However, before making an analysis of the extent the company possesses the capability to do that, I will try to provide a characterization of the concept of "quality". For example, in the ISO 9000 standards, the quality is often referred as "an aptitude of a set of intrinsic characteristics to fulfill requirements" (ISO 9000, 2017); whereas, the economist Garvin outlines the concept "as an extremely nebulous, because it is easy to visualize and exasperating to try to define" (Garvin, 1985). Since recently, the analysists from Citi recommend investors to buy shares of Expedia Inc (Derrick and Jayson, 2017) the company must be fully capable to improve its quality and to refine the deteriorating quality of the online booking services it offers. Increasing emphasis is being put on the positive growth outlook of the whole company, as this will mark an amelioration in its quality. With this knowledge in mind, the quality managers of Expedia should be able to focus on the next interrelated issues, experienced by the company. Having in mind the financial resources, being generated by Expedia Inc, the company must be fully able to fulfill its market research gap. For example, the management of the company might not be fully aware how customers formulate their expectations from past experience, advertising and communication with friends (Parasuraman et all, 1988). In this case, the improvement of market research seems quite posible, while fostering better communication between employees is also a priority and aim that could be performed by Expedia Inc.
The global market share of Expedia's online booking will rise to 9 percent up to 2020 (Schwarzbaum and Ezra, 2017), so the company must be able to improve the capabilities of its own staff. The core of the critique, provided by customers of the online travel company, lies in the fact that the company's employees spend hours trying to solve a particular problem. As Stranjancevic and Bulatovic (2015) state one of the major factors affecting the customer satisfaction are kind staff, professionalism and speed of service; all of them lacking the Expedia's staff at the present moment. Staff concern and the resulting behavior are affected by complicate interaction of attitudes, belief and ways to manage the situation. However, the company cannot spread out its investments just in order to improve the quality of the services it offers to its customers (Maillard, 2013). In the process of the resolution of its problems Expedia.com has to define its priorities, in accordance with its above-mentioned problems. However, the reduction in the levels of management that distance the customer is also within the capabilities of the company.
In the world of business, the capability for making an improvement in general lies in the financial abilities of any company. Despite the fact, that as said above the innovations in operations and the supply chain tend to be trustworthy and are generally low-cost (Kros and Brown,2012) Expedia as a company, has a positive growth outlook (Derrick and Jayson, 2017). In addition, it is stated again by (Derrick and Jayson, 2017) that the company possesses a free cash flow of $1.5 billion in annual free cash flow on top of its $3 billion in cash and equivalents. This puts the company in great position to make strategic investments and acquire strategic innovations in its everyday activity (Derrick and Jayson, 2017). Nothwithstanding that fact, Expedia Inc has the right capabilities to compensate for:
- the lack of teamwork;
- the poor and untrained staff, unable to resolve within relevant time limits particular problem;