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Essay / Priceline.Com - 1889
IntroductionBusiness models are probably the most discussed and least understood facet of the Web. Brokerage models, such as Priceline.com, are market makers: they bring buyers and sellers together to facilitate transactions. Priceline.com is pioneering a unique new type of e-commerce known as a “demand harvesting system.” Priceline.com is the world's first online shopping service where consumers name the price they are willing to pay. By leveraging the unique attributes of the Internet, Priceline.com finds sellers willing to meet buyers' needs and prices. Jay Walker, the founder of Priceline.com, created a new concept and business model. This model shifts pricing from sellers to buyers. The company is seeking to use its patented system on products such as airplane seats, hotel rooms, gasoline and groceries. Using a simple and compelling proposition called “Name Your Own Price,” Priceline.com collects consumer requests for a product or service at the desired price. Priceline.com redirects this request to its own databases or simply directly to participating suppliers. Priceline.com fulfills customer offers from inventory provided by participating sellers. Priceline.com allows sellers to generate additional revenue without disrupting their existing distribution channels or retail pricing structures. In this sense, it uses the communication and information capabilities of the Internet to disrupt the usual retail trade; alternatively, it opens up to the individual consumer a form of transaction that was previously only open to businesses.Key IssuesPriceline.com enjoyed enormous success in its early years. However, this achievement was put on hold in 2000. Priceline.com is now facing many critical problems. Recently, Priceline.com has suffered serious investor pain and is now on the brink of survival with the failures of WebHouse Club and Perfect Yardsale. The main areas of concern, which will be analyzed in more detail later, for Priceline.com include: contested patent techniques, poor customer service, need for a new brand identity, reliance on travel industry, falling stock prices and fierce new competitors. , facing monumental problems, Priceline.com faces a daunting future and questionable long-term success. Will Priceline.com find itself ousted from the market by imitators, despite its patent? Basically, can Priceline.com survive? SWOTAn assessment of the strengths and weaknesses of Priceline.com comes in the form of an inspection of the company's internal mechanisms, which are relatively easier to control than external factors. On the other hand, opportunities and threats were analyzed as part of an external environmental analysis; over which Priceline.com has no control.