priceline.com case ppt

8/10/2019 Priceline.com case ppt

1/28

Priceline.com

and the Search for a Business Model that Works

NAME YOUR OWN PRICE

NO ONE DEALLIKE WE DO

Present by

Group 2


2/28

2

Contents

1 Case Background

2 Priceline.com Business Model

3 The future of Priceline.com

4Travel Industry Impacts

5 Current Situations


3/28

3

Background

Start Business

One Stop Shopping!!

Hotel ReservationStart Operation by

Jay Walker

1998

Reverse Auction

Products

Airline Ticket

Financial Service

Car Rental

Name Your Own Price


4/28

4

Background

Expansion Phase

Priceline Webhouse Club

Beginning of 2000

Extend Model

- Groceries

- Gasoline

- Used Goods

Shut Down!!

Oct 2000

Jay WalkerResigned

Dec 2000

- Unable to deal with

major Brands

- Incovenient to pick up

Factors


5/28

5

Background

Reorganization Phase

Core

BusinessRichard Braddock

New Chairman

Discount Retail

20032004 Extension

** First Annual Profit **


6/28

6

Background

Boom!!

International

Business

2004 - Active Hotels

Integration

2005Booking.com

2007Agoda


7/28

Question1

7

What are the corecomponents of Pricelines

business model?


8/288

Components of Business Model

Value Proposition

Revenue Model

Market Opportunity

Competitive EnvironmentCompetitive Advantage

Market Strategy

Organizational Development

Management Team


9/289


Consumer Side

Low Cost with some

additional conditions

Vendor Side

New channel for

excessed products

1) Value Proposition


10/2810


Transaction Fee

Booking & Handling Fee

Adaptive Marketing Program

- Adaptive Promotion

- Adaptive Cross Selling

Sales

Gain between

the offer price and

the vendor price

2) Revenue Model


11/2811


Marketspace

Travel Service Industry

started from domestic (U.S.)

1978

2007 => $253.29 billion

Realistic Market

Consumer side:

Budget Concern

Vendor side:

Excessed Demand ProductRapid Aging

3) Market Opportunity


12/2812


Direct Competitors

Travel Agenciese.g. expedia.com,

orbitz.com

Vendor itself !!!

Travel Industry

High-Revenue

Attractive

Price-War

Information-War

Indirect

Competitors

Online Market Maker

e.g. eBay.com, Amezon.com

High Competitive

Segment !!

4)CompetitiveEnvironment


13/2813


Lower Price from ReverseAuction

Fast Response, Reliability & Standard

First MoverAdvantage & Brand

Product Mix


14/28

International Expansion

14


New Trading Model

Name Your Own Price

Brand Ambassador

William Shatner

Published Price Model

No One Deals Like We Do

6)strategies


15/28


15

OrganizationDevelopment

&

ManagementTeam


16/28

Core Components of Priceline.com

16

Value Proposition

Revenue Model

Competitive Advantage


17/28

Question 2

17

Do you think Priceline willultimately succeed or fall?

Why?


18/28

18

Question 2

Focus on Core Business

Travel Reservations

Financial ControlsExtent Inter-Market

Pricing Strategy

Discount fee

Flexible Services

Specific Information

Group Services

Technology Channel

I-Phone

Uncertainty2 Sides Effects

Direct & Indirect

Competitors

Price War

Inflexible Services

Digital/InternetEffect

Brand Image


19/28

Question 3

19

How has Priceline (and similar online services)impacted the travel services industry?


20/28

20

Question 3

Customer Effects

Positive EffectsIncrease Customer

Easy/Direct to Target

Negative Effects

Price WarValue vs. Volume

Entrepreneur Effects

Positive EffectsMatching Demand

Price/Budget

Cost Savings

Almost Perfect Information

Negative Effects

Limitation Acceptable Prices

Comparable Prices


21/28

Question 4

Follow up on developments at Priceline since Sep 2008 when this case study was prepared.

Has its business model and/or strategy changed at all,

and if so, how?

Who are its strongest competitors?

Is it profitable or operating at a loss?

21


22/28

Question 4

22

Has its business model and/or strategy changed at all,

and if so, how?


23/28

Iphone Application

23


24/28

Priceline Competitor

24



25/28

Question 4

25



26/28

Question 4

26



27/28

Question 4

27



28/28

28

Class Discussion

Q & A

priceline.com case ppt

Documents