[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.

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

  1. 1. So… Priceline? Ian – Jolene – Dorlisa – Grace – Wei Ling
  2. 2. AgendaThe Beginning The Past The Present The Future The End
  3. 3. The Beginning
  4. 4. What is Priceline Priceline?
  5. 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. 6. The Past
  7. 7. Evolution of the Business Model2003: Introduction of retail pricing
  8. 8. Evolution of the Business Model2003: Introduction of retail pricing2005: Acquisition of booking.com
  9. 9. Evolution of the Business Model2003: Introduction of retail pricing2005: Acquisition of booking.com2006: Acquisition of Active Hotels
  10. 10. Evolution of the Business Model2003: Introduction of retail pricing2005: Acquisition of booking.com2006: Acquisition of Active Hotels2007: Acquisition of Agoda Hotels
  11. 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. 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. 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. 14. n of the Busi ness ModelFurt her Evolutio Shift Towards Social Media
  15. 15. n of the Busi ness ModelFurt her Evolutio Emphasis on M- Commerce
  16. 16. n of the Busi ness ModelFurt her Evolutio Focus on Retail Pricing
  17. 17. The Present
  18. 18. Val ue Propo sition?Buyers•  Save money by trading off flexibility about brands, product features and/orsellers in return for lower prices
  19. 19. Val ue Propo sition?Sellersi.  Minimize disruption of existing distribution channels and pricing structureii.  Maximize revenueiii.  Minimize lost sales
  20. 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. 21. arket Oppor tunity?MPoor Economic Conditions ravellersPr ice-Sensitive Leisure TExcess Inventory/Ca pacity
  22. 22. Competition?Direct Competitors Similar Internet Travel Companies i. Expedia ii. Travelocityiii. Orbitz
  23. 23. Competition?Indirect Competito rsOnline Airlines and Hotel Portals•  Budget Airlines Discount websites •  Groupon
  24. 24. ve Advan tage?Competiti1. CostLeadership
  25. 25. ve Advan tage?Competiti2. InformationAsymmetry
  26. 26. ve Advan tage?Competiti3. First-MoverAdvantage
  27. 27. Marketing StrategyCelebrity End orsement ngSearch Engine MarketiOnline Affiliate Mark eting
  28. 28. What is Priceline’s Impact on the Travel Industry?
  29. 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. 30. I mpact On I ndustryIncrease Number of EfficientTransactions yReduce Excess CapacitEnlarge Market Size
  31. 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. 32. The Future
  33. 33. Priceline:Success? Or Failure?
  34. 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. 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. 36. Recap!Priceline ü Unique business model ü Impacted the travel services industry in a positive wayOverall, • Sustainable competitive advantage • Strong potential to succeed

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