Priceline Presentation
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Priceline.com and the Search for a Business Model that NAME YOUR OWN PRICE “ NO ONE DEAL LIKE WE DO” Present by Group 2
description
Transcript of Priceline Presentation
Priceline.com and the Search for a Business Model that Works
Priceline.com and the Search for a Business Model that Works
NAME YOUR OWN PRICE“ NO ONE DEAL LIKE WE DO”
Present by Group 2Present by Group 2
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Contents
11 Case Background
22 Priceline.com Business Model
33 The future of Priceline.com
44 Travel Industry Impacts
55 Current Situations
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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
Background
Expansion Phase
“Priceline Webhouse Club”
Beginning of 2000
Extend Model
- Groceries- Gasoline- Used Goods
Shut Down!!
Oct 2000
Jay Walker Resigned
Dec 2000
- Unable to deal with major Brands
- Incovenient to pick up
Factors
5
Background
Reorganization Phase
Core Business
“Richard Braddock”
New Chairman
“Discount Retail”
2003 – 2004 Extension
** First Annual Profit **
6
Background
Boom!!
“InternationalBusiness”
2004 - Active Hotels
Integration
2005 – Booking.com
2007 – Agoda
Question1
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WWhat are the corecore
components of Priceline’s
business model?
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Components of Business Model
Value Proposition
Revenue Model Market Opportunity
Competitive Environment Competitive Advantage
Market Strategy
Organizational Development Management Team
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Components of Business Model
Consumer Side
Low Cost with some
additional conditions
Vendor Side
New channel for excessed products
1) Value Proposition
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Components of Business Model
Transaction Fee
Booking & Handling FeeAdaptive Marketing Program
- Adaptive Promotion
- Adaptive Cross Selling
Sales
Gain between the offer price and
the vendor price
2) Revenue Model
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Components of Business Model
Marketspace
Travel Service Industry started from domestic (U.S.)
1978–2007 => $253.29 billion
Realistic Market
Consumer side:Budget Concern
Vendor side:Excessed Demand Product
Rapid Aging
3) Market Opportunity
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Components of Business Model
Direct Competitors
Travel Agenciese.g. expedia.com,
orbitz.com
Vendor itself !!!
Travel Industry
High-Revenue Attractive Price-War Information-War
Indirect Competitors
Online Market Makere.g. eBay.com, Amezon.com
High CompetitiveSegment !!
4)CompetitiveEnvironment
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Components of Business Model
Lower Price from “Reverse Auction”
Fast Response, Reliability & Standard
First Mover Advantage & Brand
Product Mix
5) Competitive Advantages
International Expansion
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Components of Business Model
New Trading Model
“Name Your Own Price®”
Brand Ambassador
“William Shatner”
Published Price Model
“No One Deals Like We Do®”
6)strategies
Components of Business Model
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OOrganization
Development&
MManagement
Team
Core Components of Priceline.com
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VValue Propositionalue Proposition
RRevenue Modelevenue Model
CCompetitive ompetitive AAdvantagedvantage
MMarket arket CCreatorreator
Question 2
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DDo you think Priceline will o you think Priceline will
ultimately succeed or fall?ultimately succeed or fall?
Why?Why?
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Question 2 Success Factors
Success Factors
Focus on Core BusinessTravel Reservations
Financial ControlsExtent Inter-MarketPricing Strategy
Discount fee
Flexible ServicesSpecific Information
Group Services
Technology ChannelI-Phone
Uncertainty2 Sides Effects
Direct & Indirect Competitors
Price War
Inflexible ServicesDigital/Internet
EffectBrand Image
Risk FactorsRisk Factors
Question 3
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HHow has Priceline (and similar online services) ow has Priceline (and similar online services) impacted the travel services industry?impacted the travel services industry?
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Question 3
Customer EffectsCustomer Effects
Positive EffectsIncrease Customer
Easy/Direct to Target
Negative EffectsPrice War
Value vs. Volume
Entrepreneur EffectsEntrepreneur Effects
Positive EffectsMatching Demand
• Price/Budget
Cost Savings
Almost Perfect Information
Negative EffectsLimitation
• Acceptable Prices
• Comparable Prices
Question 4
FFollow up on developments at Priceline since ollow up on developments at Priceline since Sep 2008 when this case study was prepared. 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?
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Question 4
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HHas its business model and/or strategy changed at all,as its business model and/or strategy changed at all,
and if so, how? and if so, how?
Iphone Application
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Priceline Competitor
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Who are its strongest competitors?
Question 4
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Who are its strongest competitors?
Question 4
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Is it profitable or operating at a loss?
Question 4
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Is it profitable or operating at a loss?Is it profitable or operating at a loss?
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Class Discussion
Q & A
