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and the Search for a Business Model that Works
NAME YOUR OWN PRICE
³ NO ONE DEAL LIKE WE DO´
Submitted By : GROUP- 6, MBA (PT) ± 2nd year NAME Abhishek Sahi Amlan Mukherjee Anesh Dimoli Amit Kumar Lakra Ankit Barua ROLL NO. S-2 S-7 S-8 S-5 S -14
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Case Background Priceline.com Business Model The future of Priceline.com Travel Industry Impacts Current Situations
Background Start Business ³Name Your Own Price ®´ 1998 Start Operation by ³Jay Walker´ Products ³Reverse Auction´ One Stop Shopping!! Airline Ticket Hotel Reservation Financial Service Car Rental 3 .
Incovenient to pick up Oct 2000 Shut Down!! Dec 2000 J y W lker Resigned Exten Mo el .Unable to deal with major Brands .Groceries .Background Expansion Phase Beginning of 2000 ³Priceline Webhouse Club´ F ctors .Used Goods 4 .Gasoline .
Background Reorganization Phase Ne Ch ir n 2003 ± 2004 tension Core Business ³Richard Braddock´ ³Discount Ret il´ ** First Annu l Profit ** 5 .
Active Hotels 2005 Boo ing.com 2007 Agod ³Intern tion l Business´ 6 .Background Boom!! Integr tion 2004 .
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 Low Cost with some additional conditions Vendor Side New channel for excessed products 9 .
Adaptive Promotion .Components of Business Model 2) Revenue Model Transaction Fee Booking & Handling Fee Adaptive Marketing Program .Adaptive Cross Selling Sales Gain between the offer price and the vendor price 10 .
Components of Business Model 3) Market Opportunity Marketspace Travel Service Industry started from domestic (U.S.) Realistic Market Consumer side: Budget Concern Vendor side: 1978±2007 => $253.29 billion Excessed Demand Product Rapid Aging 11 .
g. expedia. Amezon.com 4) Competitive Environment Indirect Co petitors Vendor itself !!! High Co petitive Seg ent !! Online Market Maker e. eBay.Components of Business Model Tr vel Industry High-Revenue Attractive Price-War Information-War Direct Co petitors Travel Agencies e. orbitz.com 12 .com.com.g.
Components of Business Model Lower Price from ³Reverse Auction´ F st Response. Reli bility & St nd rd First over Advantage & Br nd ix roduct 13 .
Components of Business Model New Trading Model ³Name our Own Price®´ Brand Ambassador ³William Shatner´ 6) strategies Published Price Model ³No One Deals Like We Do®´ International Expansion 14 .
Components of Business Model Organization Development & Management Team 15 .
Core Components of Priceline.com Value Proposition Revenue Model Competitive Advantage 16 .
Question 2 Do you think Priceline will ultimately succeed or fall? Why? 17 .
Question 2 Focus on Core Business Travel Reservations Uncertainty 2 Sides Effects Financial Controls Extent Inter-Market Pricing Strategy Discount fee Direct & Indirect Competitors Price War Flexible Services Specific Information Group Services Inflexible Services Digital/Internet Effect 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 Price/Budget Positive Effects Increase Customer Easy/Direct to Target Cost Savings Almost Perfect Information Negative Effects Limitation Acceptable Prices Comparable Prices Negative Effects Price War Value vs. Volume 20 .
Question 4 Follow up on developments at Priceline since S ep 2008 when this case study was prepared. and if so. Has its business model and/or strategy changed at all. how? Who are its strongest competitors? Is it profitable or operating at a loss? 21 .
how? 22 .Question 4 Has its business model and/or strategy changed at all. and if so.
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 .