Technology of the Week [Team 9] – Vakantieveilingen.nl vs Priceline
For our technology of the week we chose 2 businesses that, in our opinion, have an innovative business model: Vakantieveilingen.nl and Priceline.
First of all, the Internet has become a vehicle for electronic collaboration through e-markets that exchange both information and knowledge (Standing, 2000). Vakantieveilingen.nl is one those e-markets. It is an intermediary that allows the offering companies (the sellers) to put up products and/or services for auction which potential buyers can bid on. This is an example of an English auction (Businessdirectory, 2012).
Priceline uses a reverse auction. Reverse auctions can be used as a response to cost savings and differ from traditional auctions like English auctions such that the lowest unique bidder wins and not necessarily the highest (Gaggero, 2012).
Vakantieveilingen.nl offers the customers value by putting effort into the content and its user-friendliness. It makes an attractive partner for (smaller) companies who need more promotion for their products/services and we expect their user-base to grow even more in the near future.
We would like to refer to the following table for Vakantieveilingen.nl’s SWOT and Porter’s five forces:
Priceline.com provides the customers with flexibility to bid based on their own preferences. On the other hand, it helps vendors to sell the products that are unsold and provide extra revenue. Priceline also provides the suppliers show anonymously; it can avoid its regular retail business from being harmed, it protects the existing brand.
Priceline’s SWOT and Five Forces:
Both companies have strong market position. However, the industry has low entry barriers for new competitors. They are both positioned in intensively competitive market.
Name your own price by Priceline.com is protected by a patent whereas the technology of Vakantieveilingen.nl is not patented. Priceline.com pays a lot for online advertising whereas Vakantieveilingen.nl relies more on word-of-mouth advertising. Priceline.com expand the market by acquiring companies, while Vakantieveilingen.nl try to grow beyond international boundaries on their own.
Similarities Business Model
Both firms are active on the B2C markets. Both businesses quickly expanded to neighboring countries (e.g. Belgium and Canada).Due to the first-mover advantage, the technology companies could obtain a strong position in their markets.
Differences Business Model
Revenue model used by Vakantieveilingen.nl claims a fixed share of five Euros for each transaction, while Priceline makes use of ‘Opaque’. Priceline.com provides product such as travel tickets where Vakantievelingen.nl is much more diverse with tickets for leisure time activities.
Travel booking is a highly competitive market, mainly as a result of low barrier to entry. Traditional travel booking system still has a considerable amount of market share, and auction-based travel booking is yet to become the frontrunner.
Vakantieveilingen.nl and Priceline.com could both grow exponentially by increasing their exposure in foreign countries. We predict Priceline.com will continue this effort in the short and long run, and Vakantieveilingen.nl will start the same tactic when it expands internationally. The looming economic volatility casts uncertainty on the industry’s future outlook. However the concern is fairly minimal in the near future.
J.H. Aben – 171724
L. Keijzer – 355076
K.B.T. Tram – 355313
C.K. Nguyen – 361546