Strategic Management & Priceline.com: A Comprehensive Case Study

This case study provides a strategic analysis of Priceline.com Inc., an online travel booking service, focusing on its "Name your own price" business model and its internal strengths and weaknesses. The analysis identifies Priceline's strengths, including its global presence, loyal customer base, ability to expand, user-friendly website, and strong brand value. It also highlights weaknesses such as technological vulnerabilities, lack of ownership of travel assets (hotels, airlines, cars), low barriers to entry for competitors, and high taxes and salaries. The study compares Priceline to competitors like Expedia and Orbitz World Wide, emphasizing Priceline's effective strategies, strong management, and alliances with numerous suppliers. Ultimately, the case study illustrates how Priceline dominates the online travel booking industry through its strategic approach and extensive supplier network. Desklib offers more solved assignments and past papers for students.

Running Head: CASE STUDY 0
Strategic Management
Student Details
2/8/2019

Case Study 1
Case Study: Priceline.com Inc.
Priceline is a marketing website which provides services of online travel booking and
discounts. Here, customers tell the price that they can pay for hotels, airfares, rental cars,
holiday packages. Business model of it “Name your own price” has become a success in its
domain that is helping customers to find the best packages in alignment of their quote price
(David & David, 2015).
In similar to other organizations, Priceline also has its internal strengths and
weaknesses which influence the organization as a whole. There needs a strategy development
team in the organization which foster the strength of the company by building focused and
innovative ideas and help in overcoming its weaknesses. This chapter focuses on evaluation
and identification of strengths and weaknesses of a firm in its functional areas including
business, production and operations, marketing, research and development (R&D),
management, accounting and finance, and management information systems (MIS). This
chapter examines relationships among these business areas, strategic implications of
functional area, describes the process of internal audit, and introduce resource based view of
strategic management as concept of value chain analysis. Priceline.com makes an excellent
use of its strength to benefit from external circumstances (David & David, 2015). Analysis of
this case study provides various internal strengths of Priceline which includes efficiency in
handling clients, company is present globally that makes it more trustworthy, has chain of
loyal customers across various countries, has the capability to expand its business in new
countries, provide all prices of airlines on the website for providing user-friendly experiences
to customers and a brand value that is recognised on both websites and search engines of
international hotels and airlines. Further, sales growth rate of Priceline is high and also high
profits (23.08% PCLN’ return on assets), large domestic market ($4 billion sales generation)

Case Study 2
(David & David, 2015). Along with these strengths, Priceline.com has various weaknesses
also which includes due to increasing use of internet, there rises some technological issues
which are out of control, Priceline.com does not possess its own hotels, airlines, or cars, low
barriers for new competitors’ entry, and one more weakness is associated with huge taxes and
salaries. The number of employees and the more money a company make, the more taxes it
has to pay and so the Priceline (David & David, 2015).
There is several numbers of competitors in the business of online travel booking. One
of the major competitors of Priceline is Expedia. Expedia was founded one year before
Priceline, in the year 1996. Revenue volume of Priceline is four times more than the
Expedia’s revenue volume but while competing for customers, these two businesses are very
hostile. Other competitor of Priceline includes Orbitz World Wide (David & David, 2015).
Strategies of Priceline are effective in a way that they provide online travel bookings
and offers. Secondly, the link of support developed under the Priceline and established
between various portals shows that Priceline has great management strategy and domain
expertise (David & David, 2015). Priceline is dominating the industry of online travel
booking and offers because of its alliance with large number of suppliers which make it easy
for Priceline to avail services of price-disclosed hotel care, 185,000 hotels and
accommodations in around 160 countries (David & David, 2015).

Case Study 3
References
David, F. R., & David, F. R. (2015). Strategic Management: A Competitive Advantage
Approach, Concepts and Cases (15th ed.). Retrieved from
https://www.vitalsource.com/textbooks?term=9781323322406