Environmental Analysis

My firm is Expedia, and it operates in the travel industry. The company's core site is a consolidator, but the company operates a range of complementary sites in the travel business. There are a few key macroeconomic variables that impact on the travel industry in general. The most important is the state of the economy (WTO, 2010), which we can take as a combination of GDP and the unemployment rate. These two variables are important because travel is largely a luxury item for consumers. During difficult times, consumers are more apt to save than spend on luxury items. As such, the savings rate is also a variable to which there is a correlation between travel industry demand. This demand will be reflected in firm revenues.

In addition, because firms like Expedia are in an environment characterized by rapidly changing technology, these companies must constantly invest in research and...
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