Priceline case presentation, prepared by Grace Ong, Ian Gobardja, Chooi Wei Ling, Jolene Lim & Dorlisa Song.
Uploaded with kind permission from the abovementioned authors.
6. “Priceline is the ultimate bargain
bin of travel agencies. It takes the
extra rental cars, airline seats,
and rooms that travel suppliers
don't think they could possibly
sell, marks them w-a-a-a-y down,
and gives them to you for cheap”
8. Evolution of the Business Model
2003:
Introduction of retail pricing
9. Evolution of the Business Model
2003:
Introduction of retail pricing
2005:
Acquisition of booking.com
10. Evolution of the Business Model
2003:
Introduction of retail pricing
2005:
Acquisition of booking.com
2006:
Acquisition of Active Hotels
11. Evolution of the Business Model
2003:
Introduction of retail pricing
2005:
Acquisition of booking.com
2006:
Acquisition of Active Hotels
2007:
Acquisition of Agoda Hotels
12. Evolution of the Business Model
2003:
Introduction of retail pricing
2005:
Acquisition of booking.com
2006:
Acquisition of Active Hotels
2007:
Acquisition of Agoda Hotels
2008:
Eliminated booking fee
13. Evolution of the Business Model
2003:
Introduction of retail pricing
2005:
Acquisition of booking.com
2006:
Acquisition of Active Hotels
2007:
Acquisition of Agoda Hotels
2008:
Eliminated booking fee
2010:
Acquisition of Traveljigsaw
14. Evolution of the Business Model
2003:
Introduction of retail pricing
2005:
Acquisition of booking.com
2006:
Acquisition of Active Hotels
2007:
Acquisition of Agoda Hotels
2008:
Eliminated booking fee
2010:
Acquisition of Traveljigsaw
2012:
Acquisition of Kayak
15. n of the Busi ness Model
Furt her Evolutio
Shift Towards Social
Media
16. n of the Busi ness Model
Furt her Evolutio
Emphasis on M-
Commerce
17. n of the Busi ness Model
Furt her Evolutio
Focus on Retail
Pricing
20. Val ue Propo sition?
Buyers
• Save money by trading off flexibility about brands, product features and/or
sellers in return for lower prices
21. Val ue Propo sition?
Sellers
i. Minimize disruption of existing distribution channels and pricing structure
ii. Maximize revenue
iii. Minimize lost sales
22. R evenue M odel?
Name Your Ow
n Price
Transaction Broker
Connecting buyers and sellers for
a transaction fee
Online Retail
E-tailer
Commission fees from the
merchants for the sales of
discounted flights and hotels
23. arket Oppor tunity?
M
Poor Economic Conditions
ravellers
Pr ice-Sensitive Leisure T
Excess Inventory/Ca
pacity
31. act On Con sumers
Imp
Empowers consumers by making it easier to compare prices
and features
orant
phic: pri ce-sensitive, brand-ign
Open up a new demogra iously
n ot afford to travel prev
consumers who could
32. I mpact On I ndustry
Increase Number of Efficient
Transactions
y
Reduce Excess Capacit
Enlarge Market Size
33. ating Book ing Fees
Elimin
Streamlined the ind
ustry and
increased overall effi
ciency
tly
Encoura ge people to book direc
d of
thro ugh online sites, instea
through airlines
36. ine Failure Factors
Pricel
Porter’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)
37. ine Success Factors
Pricel
1. Priceline Group unique position à Greater synergy
2. Poor economic outlook à Price conscious market segment é
3. E-Commerce and M-commerce markets are set to grow
4. Promising company direction (diversification and marketing efforts)
5. Well-established brand name
38. Recap!
Priceline
ü Unique business model
ü Impacted the travel services industry in a positive way
Overall,
• Sustainable competitive advantage
• Strong potential to succeed