Priceline WebHouse Club Harvard Case Solution & Analysis

Priceline authorized users "name your price" for airline tickets and hotel rooms, he bought these suggestions for marketers. Priceline founder Jay Walker described as a result of transactions, a new ecosystem that has helped customers realize lower costs, allowing marketers to turn excess inventory at profits and, thus, the price discrimination, without damaging their brand or their published prices. Tickets and reservations are only a starting point for Priceline, however. By the end of 1999, Priceline has made inroads into the mortgage, new car sales and car rental companies. In Walker began November Priceline WEBHOUSE Club to bring the "name-your-price" concept products, with plans to eventually scale WEBHOUSE includes almost every type of retailer. Several pressing issues confront Priceline WEBHOUSE management team in this case. First company has to close the deal with any major brand manufacturers. Thus, to satisfy customers, WEBHOUSE subsidized member savings from their own coffers, which, combined with the early success of customers, resulting in significant losses and cash burn. To continue to attract customers , Walker estimates that $ 200 million to $ 500 million in additional funds will be needed. Meanwhile, the company has faced questions about where and how quickly it should be expanded.
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by Thomas R. Eisenmann, John K. Rust Source: Harvard Business School 29 pages. Published: 22 February 2000. Prod. #: 800287-HCB-ENG

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