Case Interview Question #00175: Your client Expedia.com (owned by Expedia Inc., NASDAQ: EXPE) is an online travel website that currently sells all major travel products – airline flight tickets, hotel rooms, car rentals, vacation packages, and cruises. Their major competitors are Travelocity, Orbitz and Priceline.
They are interested in entering a new market where consumers can add additional destination products to their trip, such as airport transfers, show tickets, tours, etc. A consumer will begin booking their trip as normal, and before concluding, will be presented with these additional product options. Expedia calls this new product a “Trip Add-On”.
Before Expedia invests money in developing this new capability, they’ve asked you to evaluate the market potential of this offering and provide a go/no-go recommendation with associated risks. How would you go about it?