Priceline Case Study
The core components of Priceline's business model:
The core components of Priceline's business model are based on reverse auction pricing pattern. This unique pattern offers value for both consumer and vendor. Priceline also acts as an intermediary, buying blocks of airline tickets and vacation packages at a discount and selling them at a reduced retail price or matching its inventory to bidders. It is best known for its Name Your Own Price auctions, where users specify what they are willing to pay for goods or services, and multiple providers bid for their business (Kenneth & Laudon 2011). It helps consumers to find cheaper product and service. On the vendor side, it allows them to sell products they might not otherwise be able to sell.

Priceline's business model also is known as brokerage. In this model Pricesline creates its own market by bringing buyers and sellers together. Priceline operates as the broker or middle man to bring both parties in a systematic environment.
Priceline receives it’s revenue based on the difference between the “Name your own price” amount entered by the customer and the amount charged by the service provider such as the airline.

Will Priceline ultimately succeed or fail?

Priceline has a reasonable business model which will allow them to succeed in the long term. The reverse auction model which Priceline uses to link the sellers with buyers is what has made it profitable. There will be allways customers seeking to pay as low as posible for air traverl and they are willing to ignore such conveniences like choosing their specifice flying time, and earning frequent-flyer miles. Priceline initially started in the situation where was unable to generate a profit running at a loss of $1 billion. Since its turnaround in 2003 it has been able to reach and maintain sustained profitability. In 2009,