Trivago Business Case Study
In 2016, Trivago’s field of business could be described as hotel-related online marketing and distribution. The firm provided a two-sided, online meta-search platform that connected travelers seeking hotel accommodations with more than 200 booking sites and 1.3 million hotels. With 1.4 billion visits and 487 million qualified referrals1 in 2016, Trivago was the largest hotel meta-search platform in the world. What differentiated Trivago’s business model from that of online travel agents (OTAs) was its value proposition as an independent information provider. Trivago did not sell hotel rooms. Instead, it organized large amounts of hotel-related information from multiple sources to offer the optimal basis for making a booking decision. Thus, Trivago helped users convert their initial interest into a clear, specific booking intention, thereby fulfilling their personal needs.
The following points are to guide a review and discussion of some important concepts.
- Describe Trivago’s corporate-level strategy and discuss the advantages and disadvantages of the company’s matrix organizational structure. Does the organizational design effectively support the needs of Trivago’s corporate-level strategy?
- How does the management innovation activity at Trivago facilitate achievement of the company’s corporate objectives? What recommendations would you make to improve either the design or implementation of the company’s management innovation efforts?
- Using a balanced scorecard framework, outline the financial and strategic organizational controls used by Trivago to drive management behavior and firm performance. Are the corporate criteria balanced? Are they yielding desired outcomes for the company?
Trivago’s corporate-level strategy revolves around being an independent information provider in the hotel meta-search market. This strategy emphasizes providing users with comprehensive information to facilitate informed booking decisions. Trivago’s matrix organizational structure, where employees report to both functional managers and project managers, supports this strategy in several ways:
Advantages:
- Flexibility: The matrix structure allows Trivago to adapt quickly to changes in the competitive landscape and technology advancements.
- Cross-functional collaboration: By breaking down silos between departments, the matrix structure encourages collaboration and knowledge sharing, which is crucial for aggregating and organizing large amounts of hotel-related information.
- Innovation: The matrix structure fosters innovation by bringing together employees with diverse skills and perspectives.