Porter’s 5 Forces
Porter’s 5 Forces
Webjet is Australia and New Zealand’s largest online travel agency. Leading the way in online travel tools and technologies, Webjet enables customers to easily search and book the best domestic and international travel flight deals, travel insurance, car hire and hotel accommodation worldwide. Webjet sites are simple to navigate, engaging and informative, giving customers confidence when managing their own travel arrangements. Webjet offers a 24/7 customer support service to cater to our customers’ needs. On 21 August 2013, Webjet announced a profit of $11. 4 million and NBAT of $6. 5 million.
During the year the company experienced a growth in total transaction values of $110 million from $768 million to $884 million. About service Webjet. com has created our site around the belief that saving time and money is the key to opening up a world of travel opportunities. Operating as a completely independent flight booking engine, Webjet. com shows the absolute economical fares available, displaying the lowest total travel price. With the use of leading proprietary search technology, Webjet. com sifts through millions of published airfares from over 150 different airlines and 69,000 hotels to choose from.
In addition to discounted fares offered through our consolidator network we provide the most affordable travel options available. We are fully committed to providing better access to savings on both international and domestic airfare as well as top deals for hotels, travel packages, cruise, car rentals and more! Unlike most of our competitors, we display the TOTAL price, including taxes and fees, up front to allow customers to compare prices and know what to expect at point of purchase. “We help U. S. world travelers navigate through the jungle of international airfares to find the best deals,” says Mathias Friess, Webjet.
com’s CEO. With that said who wouldn’t want to easily find flights that will save them money? Also, not only does Webjet. com promise convenient and affordable flights but we also promise privacy. Booking online, no matter what site used, requires users to provide personal information. Webjet. com promises to not only protect this information but also to only share it after receiving the travelers’ consent. So why choose Webjet. com? Because our team works to provide affordable fares and put customers’ needs first. Marketing and IT team
We’re more than such social media junkies and computer geeks. Our marketing team works to make a connection with our customers and let them know about the exciting updates with our site. We figure out what you want and need so that we can get it to you. From making you smile with our #TravelProblems tumble to providing travel tips with our blog and updating you on deals with our newsletters we enjoy reaching out to each customer. We’re constantly using our creativity to give travelers what they’d want from sweepstakes to our hangout videos that provide tips for traveling abroad.
Feel free to connect with us on our Facebook, Twitter and Google+. History Established in 1998, Webjet was founded by former Jetset Travel Chief Executive David Clarke. Management WEB’s senior management has a mix of backgrounds, with a core group of directors and managers having been with the company for several years. In the early 2000’s this group pursued the development of an integrated booking platform to streamline its website activities Since then they have expanded Webjets services into complimentary fields that can be managed via their existing website.
Webjet’s ROE over the last several years attests to the success of these decisions and management’s ability to provide good returns on investor capital. Internal ownership is substantial, with over 12% of outstanding shares owned by the directors and senior managers alone. Bonuses are typically 20% or less of total remuneration across the management group. Risks •Stiff competition in online accommodation service with the likes of Wotif (WTF) and lastminute.
com •Competition from existing brand-name competitors like Flight Centre (FLT), who are also developing their online accommodation presence •Reliance on indebted Australian and new Zealand consumers for the vast majority of revenue •Sensitivity to the AUD, as a lower dollar will discourage Australian’s from holidaying overseas Opportunities •One of the few companies in Australia that is currently benefitting from the high AUD, as Aussies head overseas for their holidays to take advantage of increased purchasing power •The web-based business model is unencumbered by physical store fronts like its rival Flight Centre, making Webjet suited
to the on-line shift for flight and accommodation bookings •Good brand name recognition within Australia •An easily-scalable business for overseas operations Webjet is a great business with good brand name recognition in Australia and a business model suited for the online future. Their financials look great, with a stable ROE of approximately 20-25% and a robust balance sheet that has no debt. Management have successfully grown the Webjet business by increasing the services it offers and maintaining a low cost structure.
Unfortunately Webjet has no durable competitive advantage and is sensitive to movements in the AUD. Further, the online world has low barriers to entry and consumers can be fickle. In addition, Webjet must also compete with established travel groups like Flight Centre and dedicated booking agents like Wotif. As such, Empire Investing considers Webjet a Good Company with no competitive advantage – one we’d like to own, but only at a big discount to compensate.