Priceline i

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Priceline i

  1. 1. Priceline.com• A reverse auction site• The “name your price” concept can be adopted to many industries.• Providing travel and other services to individuals• Commission revenues 1
  2. 2. The Business Model• A customer makes an offer (the customer “names a price”). – The customer agrees to lose flexibility: • Exact departure times • Connections • A specific airline.• The customer is bound if the offer is accepted. Credit card is charged for transaction upon fulfillment.• Priceline matches a seller willing to sell at that price. 2
  3. 3. The Logic• Customers obtain lower prices at the cost of flexibility -- market segmentation.• Sellers can sell excess capacity without eroding current markets..• Use customers’ power.• Enjoy transaction fees. 3
  4. 4. Potential Weaknesses• Consumers with bad experiences may deter others.• Sellers may decide to do it alone, or extract benefits• Others may begin similar businesses. – Patents. Actions against the patents. 4
  5. 5. Facts about Priceline.com• Began sales on April 1998 – Leisure airline tickets.• Expanded into other areas: – Hotel rooms – Car rentals 5
  6. 6. Opportunities• Ancillary revenues – Customers sign up for other services (credit card, car rental, etc.)• Exploiting other markets: – Telephone calls• Expanding into other areas: – New/Zealand and Australia 6

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