Priceline.

com
and
and the
the Search
Search for
for aa Business
Business Model
Model that
that Works
Works

NAME YOUR OWN PRICE

“ NO ONE DEAL
LIKE WE DO”
Submitted By : GROUP- 6, MBA (PT) – 2nd year
NAME ROLL NO.
Abhishek Sahi S-2
Amlan Mukherjee S-7
Anesh Dimoli S-8
Amit Kumar Lakra S-5
Ankit Barua S -14
 Contents

11 Case Background

22 Priceline.com Business Model

33 The future of Priceline.com

44 Travel Industry Impacts

55 Current Situations

2
 Background

Start Business

“Name Your Own Price ®”

1998 Products

“Reverse Auction” Airline Ticket

Start Operation by
Hotel Reservation
“Jay Walker”
Financial Service
One Stop Shopping!!
Car Rental

3
 Background

Expansion Phase

Beginning of 2000 Oct 2000

Factors
“Priceline Webhouse Club”
- Unable to deal with Shut Down!!
Extend Model major Brands
Dec 2000
- Groceries - Incovenient to pick up
- Gasoline Jay Walker Resigned
- Used Goods

4
 Background

Reorganization Phase

New Chairman 2003 – 2004 Extension

“Discount Retail”
Core
Business ** First Annual Profit **

“Richard Braddock”

5
 Background

Boom!!

Integration

2004 - Active Hotels

“International
2005 – Booking.com
Business”
2007 – Agoda

6
 Question1

What are the core

components of Priceline’s
business model?

7
 Components of Business Model

Value Proposition
Revenue Model
Market Opportunity

Competitive Environment
Competitive Advantage

Market Strategy

Organizational Development
Management Team

8
 Components of Business Model

1) Value Proposition

Consumer Side Vendor Side

Low Cost with some New channel for

additional conditions excessed products

9
 Components of Business Model

2) Revenue Model

Transaction Fee Sales

Booking & Handling Fee Gain between

Adaptive Marketing Program the offer price and
- Adaptive Promotion the vendor price

- Adaptive Cross Selling

10
 Components of Business Model

3) Market Opportunity

Marketspace Realistic Market

Travel Service Industry Consumer side:

started from domestic (U.S.) Budget Concern

Vendor side:
1978–2007 => $253.29 billion Excessed Demand Product
Rapid Aging

11
 Components of Business Model

Travel Industry Direct Competitors

High-Revenue Travel Agencies

Attractive e.g. expedia.com,
Price-War orbitz.com
Information-War
Vendor itself !!!
4)
Competitive
Environment
Indirect
Competitors
High Competitive
Segment !!
Online Market Maker
e.g. eBay.com, Amezon.com

12
 Components of Business Model

d va nt a ge s
C om p e ti tive A
5)

Lower Price from “Reverse Auction”

Fast Response, Reliability & Standard

First Mover Advantage & Brand

Product Mix

13
 Components of Business Model

New Trading Model

Brand Ambassador
“Name Your Own Price®”
“William Shatner”

6)
strategies

Published Price Model International Expansion

“No One Deals Like We Do®”

14
 Components of Business Model

Organization
Development
&
Management
Team

15
 Core Components of Priceline.com

Value Proposition
or
t C re a t Revenue Model
M arke

Competitive Advantage

16
 Question 2

Do you think Priceline will

ultimately succeed or fall?
Why?

17
 Question 2
Succe or s
ss Fac Fa c t
tors Risk

Focus on Core Business Uncertainty

Travel Reservations 2 Sides Effects
Financial Controls Direct & Indirect
Extent Inter-Market Competitors
Pricing Strategy Price War
Discount fee Inflexible Services
Flexible Services Digital/Internet
Specific Information Effect
Group Services Brand Image
Technology Channel
I-Phone

18
 Question 3

How has Priceline (and similar online services)

impacted the travel services industry?

19
 Question 3
Customer Effects Entrepreneur Effects

Positive Effects
Matching Demand Positive Effects
• Price/Budget Increase Customer
Cost Savings Easy/Direct to Target
Almost Perfect Information

Negative Effects Negative Effects

Limitation Price War
• Acceptable Prices Value vs. Volume
• Comparable Prices

20
 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
 Question 4

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

and if so, how?

22
 Iphone Application

23
 Priceline Competitor

Who are its strongest competitors?

24
 Question 4

Who are its strongest competitors?

25
 Question 4

Is it profitable or operating at a loss?

26
 Question 4
Is it profitable or operating at a loss?

27
 Class Discussion

Q&A

28