Should Ctrip prioritize offering more budget options or focus on higher-margin luxury bookings?

Introduction

The trade-off question at hand is whether Ctrip should prioritize offering more budget options or focus on higher-margin luxury bookings. This scenario involves balancing the potential for increased market share through budget offerings against the allure of higher profits from luxury bookings. My response will analyze this trade-off through multiple lenses, considering business impact, user needs, and long-term strategy.

Step 1

Clarifying Questions (3 minutes)

• Context: Based on Ctrip's position in the market, I'm thinking this decision might be driven by changing travel trends or competitive pressures. Could you provide some context on what's prompting this consideration now?

Why it matters: Helps understand the urgency and external factors influencing the decision Expected answer: Shift in travel patterns post-pandemic or new market entrant Impact on approach: Would inform whether this is a reactive or proactive strategy

• Business Context: I'm assuming Ctrip's current revenue mix leans towards mid-range bookings. Is that correct, and can you share how significant luxury and budget segments are to our overall business?

Why it matters: Establishes baseline for potential impact of shift Expected answer: Mid-range dominant, luxury small but growing, budget stable Impact on approach: Would influence risk assessment of major shifts

• User Impact: Thinking about our user base, are we seeing any shifts in booking patterns or preferences between budget and luxury segments?

Why it matters: Ensures strategy aligns with user behavior trends Expected answer: Increasing polarization, with growth in both budget and luxury Impact on approach: Might suggest a dual-focus strategy rather than either/or

• Technical Feasibility: Considering our current platform, how much additional development would be required to significantly expand either our budget or luxury offerings?

Why it matters: Assesses technical constraints and resource requirements Expected answer: Minimal for budget expansion, more substantial for luxury features Impact on approach: Could influence timeline and resource allocation

• Timeline: Is there a specific timeframe we're working with for implementing this strategic shift?

Why it matters: Determines urgency and scope of initial actions Expected answer: Aiming for implementation start within next quarter Impact on approach: Would shape the aggressiveness of the recommendation and testing strategy