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Transcript of Priceline
Claims to help users to find discounted rates for travel-related purchases such as:
Not a direct supplier of these services
Digital Media and E-Marketing
What is priceline.com?
How to use
First known for its "Name Your Own Price - NYOP" system
Advantage of system:
Travelers can name their own preferred price, general location and service level
Drawback of system:
Travelers see the vacation package only after purchasing it
Customers proclaimed Priceline as a scam
From NYOP to a traditional system
Priceline changed its Business Model
Travelers are now presented prices and also told the name of the establishment
Travelers still have the option to name their desired price
1st experiment, 2000
selling gasoline and groceries under the NYOP system
2nd experiment, 2000
online auction business with Priceline Yard Sales
3rd experiment, 2000
long distance telephone service and automobiles under NYOP system
Termination of all models in 2002
1. Presentation of the company
2. Company datas
3. SWOT analysis
4. Priceline in different countries
Type in the desired destination
Choose the dates
Select the number of rooms
The "Name-Your-Own-Price" system
Originally brought on the Internet by Priceline.com
Special business model similar to reverse auction
match that combination
Over 295,000 hotels worldwide
Priceline.com, Inc. on the NASDAQ(Symbol: PCLN)
Is now the #57 largest company according to the S&P 500 index
Customer support provided in 41 languages
Car rentals available in 6,000 locations throughout the world.
Priceline, Booking.com, Active Hotels and Agoda are separately branded for dissimilar demographics.
All regulated and integrated into the Priceline business model
Stock price :
Mkt cap :
Revenue from $5.3B to $6.8B
reduce the cost of goods sold from 21.98% to 15.65%
+0.5B in net income
Forecast Earnings Growth
average annual rate of 19.25%
A GLOBAL PRESENCE
Through acquisitions in recent years, the company has grown rapidly its international presence in more than 180 countries.
Only 32% of its revenues come from the United States.
The Group's strategic orientation towards Europe and Asia allows Priceline to outperform relative to its competitors, the main one being Expedia.
Growth in bookings and income were more than 40% and 20% respectively over the past five years (vs. 10% in the Expedia), and net margin of over 27% in 2012 (vs. Expedia 10%).
Expedia the principal concurrent
Wall Street loves Priceline, which broke through the $1,000 per share.(1047)
Shares of its closest rival, Expedia Inc., meanwhile, were selling for roughly $1,000 less, at $52.
Why is there such a huge gap?
Priceline vs expedia
Still on a snapshot basis, the two hotel booking giants are in the same ballpark. Priceline’s third-quarter revenue was $1.45 billion vs $1.14 billion for Expedia. Net income was $469.5 million for Priceline vs. $209.5 million for Expedia.
Surprised to learn that Priceline is the first online travel agency.
Priceline is used in France through Booking.com.
Expedia Tripadvisor most used.
Priceline in France
As a whole, I think that Priceline is a great traveling website and really innovative. But with further investigation and comparison, I'm not convinced that Priceline can offer substantially lower prices than other websites.
In Switzerland, Priceline is one of the most often used websites, through its acquisition of Booking.com, when it comes to travel-related services. That is why I think that Priceline has already achieved an adequate market share to stay one of the top leading travel booking websites.
To conclude, if Priceline continues with this business model they will eventually control a huge part of the whole online travel market. Nevertheless, Priceline still has to position itself with a proper strategy to stay on top and avoid a eventual crisis in the next 5 years.
In America, I think that Priceline is very popular and a leading booking site. There are a few sites that offer the same types of services, and Priceline would have to build up their product in a different way in order to excel beyond the others. I think it is reliable and practical.
Priceline had made dramatic improvement to its fundamental by acquiring various international booking sites. On top of that, the acquisition of kayak.com will put Priceline in great position for future growth.
Our personal thoughts
Ensures Returning Customers
To hotels, airlines, car rental, and cruise websites.
To see specifics
For easier contact
Branch Out Services
One stop shop on Priceline website
Other forms of travel
Use of social media platform
Trip planning/travel advice
High revenue & earning growth
Large market share
Strong international presence
High brand awareness
Mainly focused on leisure travel
Very vulnerable to economy condition
Exposed to fluctuations in currency exchange rates
Risk of security breaches to personal data
Room to grow in Asia and South America
Advertising Revenues from Kayak
Develop a branch aimed for non-leisure travelers
Competition from other online travel sites
Online Portal Sites
Travel related health concerns