Analysis of Priceline.com
Incomplete Paper
Priceline.com (PCLN) may have been able to bring a dynamic reverse auction model to the market, but a cloud of doubt now hangs over the company's headquarters in Norwalk, Connecticut. Consumer adoption has been hurt by poor Web site functionality and a rigid bidding system that locks customers into buying products such as plane tickets without any control over specific flight details. On a bullish note, the company was recently reinstated into Connecticut's Better Business Bureau after making improvements to its Web site and customer service.
But the bigger problem facing Priceline is a lack of support from investors, who have driven the company's stock down 98% from its 52-week high. Executive departures and layoffs aside, the company's delayed march toward profitability and inability to scale successfully might very well exemplify a doomed model, or a solution in search of a problem.
Perhaps an emphasis on price has blinded Priceline to intangibles like quality service and a satisfying experience. It's unclear whether consumers are willing to sacrifice brand and product features to save a few bucks. The announcement in early October that the company's WebHouse Club subsidiary for groceries and gas would close, was a shot heard 'round the Web and Wall Street and signaled the model might be broken.
Introduction Which is the one place where you can satisfy your every need (almost every need) at your price? Be it airline tickets, hotel rooms, rental cars, mortgages, new automobiles, or even long distance calling time. The answer would be Priceline.com. All you have to do is know your need, state your terms, and make your offer. It doesn’t get easier than this! Priceline.com was one of the pioneer online companies to traverse the traditional limitations of the Internet and revolutionize online purchasing. It’s strategy – letting the consumer name his/her price, and matching it with a seller who is willing to fill the demand at that price and those conditions, there by providing the required service the consumer desires. Thus Priceline.com is basically an integrated, Web-based e-marketing automated system, which was one of its kinds when it started its business in the consumer marketplace. In simple word it is the ideal middleman, who gets you what you want, when you want it through a unique dotcom experience. Priceline.com was formed on April 6, 1998 as a limited liability company, but looking at its potential and rapid success it was soon converted into a corporation.
I recommend a strong buy on Cisco’s stock with a target price of $32.50, a 50% upside from its current price. Cisco has a solid competitive advantage, because there are not many strong competitors in the market. The other firms show a higher P/E ratio than Cisco because they have a lower market share. The company shows a constant growth. Cisco markets its products globally with the highest market shares than its competitors. The main risks for Cisco are worsening of economic conditions or exchange rates. The company has a good growth in sales, which will lead higher profits. The company also gives out an annualized dividend to its shareholders every year.
Best Buy is currently underperforming because of several circumstances. It is at a competitive disadvantage with some large firms such as Wal-Mart and Amazon in terms of supply-chain and distribution, which impacts the customer in terms of price-point. Additionally, Best Buy has been undergoing a strategic change of direction that focuses more on small specific stores, and less on the larger, broader operations for which they are currently known. Though this may bode well for the future, there have been financial consequences from this process.
...rp decline to their public-investors flee in all directions and, as a result, the company’s stock falls sharply.
Priceline is a business service industry and according to the website Funding Universe, Priceline, is an Internet-based company that created a ticketing service called "Name Your Own Price" that matched customers to airlines. The company was formally created in 1997, and his president was Jay Walker The company headquarters is located in Connecticut (“Priceline.com Incorporated History”).
Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage doubled annually, thus, allowing for the expansion of the industry. Google is launched a year later, in 1998, only to become the most used search engine in the world and an essential partner for the online retailers by helping them tailor their websites to customer’s personal preferences and by advertising. After that, more and more people see the opportunity in the growing industry and enter it. By 2001 there are more than 513 million Internet users globally, which calls for action in terms of creating regulations and laws to protect the users and personal property. In 2003, Apple launches iTunes, and provides a platform for low-cost digital downloads. Another major change is the appearance of social media from 2004, which is one of the biggest influencer on the state of the industry. With the launch of iPhone in 2007, this trend strengthens as people get to enjoy the Internet anywhere they want to. From then on, technological advancements have made it extremely easy and fun to shop online, making it ...
The inter-company industry data also discourages investors from putting their money into Amazon.com. The company ranks 15th (out of 119 industry total) in terms of Price to Equity Ratio, 29th in terms of EPS Growth and Long term (5yr) Growth Rate, and 39th in terms of Revenue Growth. (Source: www.finance.yahoo.com). The industry ranking for Amazon.com drives potential investors to other fruitful companies within the same industry.
Shopping online has started to become the norm in society. It is actually happening faster than anyone predicted. Retailers for the first time since 2014, will generate half their income on the Web. Companies are struggling to keep up with the new trend. I witnessed this first hand and didn’t even realize it. All the radio shacks around town were closing down and I thought that was very strange. I buy a lot from Radio Shack and now there no longer available and I didn’t know why. The article written by Matt Townsend actually mentions Radio Shack. It is because everything Radio Shack has can be bought off the internet. There is no reason to come into the store anymore. This statement from Townsend “The stampede online will only accelerate
Historically, Dollar General operated in a highly price sensitive market segment, with 55% of its consumer base earning an average annual gross income of less than $40,000.[2] To attract these customers, Dollar General employed an Everyday Low Price strategy similar to Wal-Mart’s. Thus, keeping costs low and driving high traffic volumes were critical to the company’s financial success. Dollar General achieved this strategy in several ways, including keeping rents and labor costs low, locating in low-income, high traffic areas that offered consumers few substitutes, and offering a wide variety of popular CPG and white label goods.
Since its launch in the mid '90s, Dell's e-commerce business has been a poster child for the benefits of online sales, says Aberdeen Group analyst Kent Allen. The company's strategy of selling over the Internet -- with no retail outlets and no middleman -- has been as discussed, admired and imitated as any e-commerce model. Dell's online sales channel has proven so successful, says Allen that the computer industry must ask: "Does the consumer need to go to the store to buy a PC anymore?"
price as the major decision-making tool for customers (“Global Consumer Electronics”, 2013). This lack of
The company has to lower its brand value to be able to compete in down-market.
and is especially popular among eBay customers. Fig.1 briefly illustrates Company’s business. The system enables its
Best Buy opened it’s doors in 1966 by the name of “Sound of Music”, it wasn’t until 1986 that it proceeded to change it’s name to what it is recognized today. Best Buy is the top retailer in the nation’s (USA) consumer electronic retail industry. What makes Best Buy unique is that they sell electronics and appliances used for home and office, they provide customer service and business support through their Geek Squad Technical Support System, and they offer major tech brands and their products such as Apple and Windows in house. According to The New York Times, the computer and electronics industry consists of companies engaged in the retailing of computers and peripherals, consumer electronics and other technology products. The industry includes household appliances, audio and video equipment, consumer software, digital cameras, cell phones and components and other electronic goods.” Like many top leaders, Best Buy has not been immune to issues in regards to maintaining its status in the market. Some of the issues the company faces include, loss in stock value, loosing the retention of it’s customers, and being out-competed by e-commerce companies in the same industry such as, Amazon. All of this can be classified as a marketing problem Best Buy faces.
Business strategy and model: Zappos.com had a differentiation strategy with which they had differentiated themselves from the rest of the market. They had use a unique corporate culture in their company which was one of the major competitive edges of the company. According to the CEO of the company, Tony Hsieh, that everything that they had done at Zappos such as their relationships with 1,200 to 1,500 brands, policies and website style could be copied, however, the only thing that no one could copy from them was their unique culture. Zappos had 10 unique core values as a basis of their company’s culture, employee performance and their overall operations. They were hiring and firing people on the basis of their abilities that whether they were living up to these core values or not.
All items are hand-picked and have been established for 3 years. Mr Price will need to combat this threat by closing the gap where potential customers are escaping by merging businesses, or creating a competitive advantage. A competitive advantage is achieved by having lower prices, better quality, customer’s loyalty or best service. (Retief, 2015)