Concur Technologies Inc. (CNQR) expanded its reach in Indian market with its strategic alliance with the country’s leading online travel management company, Cleartrip. The agreement involves a marketing partnership between the company as well as planned investment of $40 millon in Cleartrip by Concur. Concur’s investment will provide it a minor stake in Cleartrip.
The alliance expands Concur’s existing customer base and enhances its operating regions. The company will benefit from the growing business travel market of India with enhanced combined technology, new product offering as well as superior service. The Indian travel sector is expected to increase to over $20 billion by 2012 and Cleartrip enjoys a leading position in online travel in the market.
Nearly a third of Concur’s U.S. workforce and about 40% of the global workforce are employed by the emerging businesses. As this market segment is under-served, they provide incremental long-term revenue and earnings growth opportunity for the company. Concur expects to materially increase its investments in direct distribution over the course of the next several quarters.
Valuable long-term drivers for the company include its investment in the emerging markets, its geographic expansion and customer retention (in which Concur leads the industry in client satisfaction). As the global economy gradually regains its footing, Concur believes that there will be opportunities for it to strengthen its leadership position, especially in new geographical markets and through new service offerings.
However, Concur depends on strategic relationships with third parties. Its revenues will decline if it is unable to sustain and develop these relationships. Further, an important component of its business success depends on its ability to maintain and develop relationships with travel suppliers.
Adverse changes in its existing relationships, or an inability to enter into new arrangements with these parties on favorable terms, could reduce the amount, quality and breadth of attractively-priced travel products and services.
Concur Technologies is a provider of business services that automate the processes involved in the management of corporate expense. Concur focuses on reducing costly and inefficient expense processes in businesses of all sizes, by streamlining the reimbursement processes, reducing operating costs, improving internal controls, and enabling customers to apply greater insight into their spending patterns through analytics. Major competitors of Concur are Compuware Corporation (CPWR), Oracle Corp. (ORCL) and SAP AG (SAP).
We continue to maintain a Neutral rating on Concur, with a Zacks #4 Rank (Sell recommendation) over the next one-to-three months
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