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[IT1004: tutorial 2] Priceline Case Presentation By Group A
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[IT1004: tutorial 2] Priceline Case Presentation By Group A

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Priceline case presentation, prepared by Grace Ong, Ian Gobardja, Chooi Wei Ling, Jolene Lim & Dorlisa Song. …

Priceline case presentation, prepared by Grace Ong, Ian Gobardja, Chooi Wei Ling, Jolene Lim & Dorlisa Song.

Uploaded with kind permission from the abovementioned authors.

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Transcript

  • 1. So… Priceline? Ian – Jolene – Dorlisa – Grace – Wei Ling
  • 2. AgendaThe Beginning The Past The Present The Future The End
  • 3. The Beginning
  • 4. What is Priceline Priceline?
  • 5. “Priceline is the ultimate bargainbin of travel agencies. It takes theextra rental cars, airline seats,and rooms that travel suppliersdont think they could possiblysell, marks them w-a-a-a-y down,and gives them to you for cheap”
  • 6. The Past
  • 7. Evolution of the Business Model2003: Introduction of retail pricing
  • 8. Evolution of the Business Model2003: Introduction of retail pricing2005: Acquisition of booking.com
  • 9. Evolution of the Business Model2003: Introduction of retail pricing2005: Acquisition of booking.com2006: Acquisition of Active Hotels
  • 10. Evolution of the Business Model2003: Introduction of retail pricing2005: Acquisition of booking.com2006: Acquisition of Active Hotels2007: Acquisition of Agoda Hotels
  • 11. Evolution of the Business Model2003: Introduction of retail pricing2005: Acquisition of booking.com2006: Acquisition of Active Hotels2007: Acquisition of Agoda Hotels2008: Eliminated booking fee
  • 12. Evolution of the Business Model2003: Introduction of retail pricing2005: Acquisition of booking.com2006: Acquisition of Active Hotels2007: Acquisition of Agoda Hotels2008: Eliminated booking fee2010: Acquisition of Traveljigsaw
  • 13. Evolution of the Business Model2003: Introduction of retail pricing2005: Acquisition of booking.com2006: Acquisition of Active Hotels2007: Acquisition of Agoda Hotels2008: Eliminated booking fee2010: Acquisition of Traveljigsaw 2012: Acquisition of Kayak
  • 14. n of the Busi ness ModelFurt her Evolutio Shift Towards Social Media
  • 15. n of the Busi ness ModelFurt her Evolutio Emphasis on M- Commerce
  • 16. n of the Busi ness ModelFurt her Evolutio Focus on Retail Pricing
  • 17. The Present
  • 18. Val ue Propo sition?Buyers•  Save money by trading off flexibility about brands, product features and/orsellers in return for lower prices
  • 19. Val ue Propo sition?Sellersi.  Minimize disruption of existing distribution channels and pricing structureii.  Maximize revenueiii.  Minimize lost sales
  • 20. R evenue M odel?Name Your Ow n PriceTransaction BrokerConnecting buyers and sellers fora transaction feeOnline RetailE-tailerCommission fees from themerchants for the sales ofdiscounted flights and hotels
  • 21. arket Oppor tunity?MPoor Economic Conditions ravellersPr ice-Sensitive Leisure TExcess Inventory/Ca pacity
  • 22. Competition?Direct Competitors Similar Internet Travel Companies i. Expedia ii. Travelocityiii. Orbitz
  • 23. Competition?Indirect Competito rsOnline Airlines and Hotel Portals•  Budget Airlines Discount websites •  Groupon
  • 24. ve Advan tage?Competiti1. CostLeadership
  • 25. ve Advan tage?Competiti2. InformationAsymmetry
  • 26. ve Advan tage?Competiti3. First-MoverAdvantage
  • 27. Marketing StrategyCelebrity End orsement ngSearch Engine MarketiOnline Affiliate Mark eting
  • 28. What is Priceline’s Impact on the Travel Industry?
  • 29. act On Con sumersImpEmpowers consumers by making it easier to compare pricesand features orant phic: pri ce-sensitive, brand-ignOpen up a new demogra iously n ot afford to travel prevconsumers who could
  • 30. I mpact On I ndustryIncrease Number of EfficientTransactions yReduce Excess CapacitEnlarge Market Size
  • 31. ating Book ing Fees EliminStreamlined the ind ustry andincreased overall effi ciency tlyEncoura ge people to book direc d ofthro ugh online sites, insteathrough airlines
  • 32. The Future
  • 33. Priceline:Success? Or Failure?
  • 34. ine Failure FactorsPricelPorter’s 5 Forces •  Low barriers to entry •  Strong competitive rivalry •  Strong supplier bargaining power •  Price conscious buyers have little loyalty •  Substitute products are increasingly common (budget airlines and hostels)
  • 35. ine Success FactorsPricel1.  Priceline Group unique position à Greater synergy2.  Poor economic outlook à Price conscious market segment é3.  E-Commerce and M-commerce markets are set to grow4.  Promising company direction (diversification and marketing efforts)5.  Well-established brand name
  • 36. Recap!Priceline ü Unique business model ü Impacted the travel services industry in a positive wayOverall, • Sustainable competitive advantage • Strong potential to succeed