priceline.com case ppt
TRANSCRIPT
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Priceline.com
and the Search for a Business Model that Works
NAME YOUR OWN PRICE
NO ONE DEALLIKE WE DO
Present by
Group 2
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2
Contents
1 Case Background
2 Priceline.com Business Model
3 The future of Priceline.com
4Travel Industry Impacts
5 Current Situations
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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
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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
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5
Background
Reorganization Phase
Core
BusinessRichard Braddock
New Chairman
Discount Retail
20032004 Extension
** First Annual Profit **
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6
Background
Boom!!
International
Business
2004 - Active Hotels
Integration
2005Booking.com
2007Agoda
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Question1
7
What are the corecomponents of Pricelines
business model?
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Components of Business Model
Value Proposition
Revenue Model
Market Opportunity
Competitive EnvironmentCompetitive 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 Fee
Adaptive 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 ProductRapid 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 Maker
e.g. eBay.com, Amezon.com
High Competitive
Segment !!
4)CompetitiveEnvironment
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Components of Business Model
Lower Price from ReverseAuction
Fast Response, Reliability & Standard
First MoverAdvantage & Brand
Product Mix
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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
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Components of Business Model
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OrganizationDevelopment
&
ManagementTeam
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Core Components of Priceline.com
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Value Proposition
Revenue Model
Competitive Advantage
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Question 2
17
Do you think Priceline willultimately succeed or fall?
Why?
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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
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Question 3
19
How has Priceline (and similar online services)impacted the travel services industry?
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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
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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?
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Question 4
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Has its business model and/or strategy changed at all,
and if so, how?
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Iphone Application
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Priceline Competitor
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Who are its strongest competitors?
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Question 4
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Who are its strongest competitors?
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Question 4
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Is it profitable or operating at a loss?
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Question 4
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Is it profitable or operating at a loss?
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Class Discussion
Q & A