The Priceline Group: Booking a Place for the Future SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Priceline Group: Booking a Place for the Future
The Chairman of the Priceline Group is considering the actions he must take to confront an evolving external environment, new direct competition, disintermediation and substitute offerings. Does his response require an increased coordination of each historically autonomous division or some other approach?
Authors :: Leonard A. Schlesinger, Anish Pathipati
Swot Analysis of "The Priceline Group: Booking a Place for the Future" written by Leonard A. Schlesinger, Anish Pathipati includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Priceline Disintermediation facing as an external strategic factors. Some of the topics covered in The Priceline Group: Booking a Place for the Future case study are - Strategic Management Strategies, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Priceline Group: Booking a Place for the Future casestudy better are - – there is backlash against globalization, wage bills are increasing, increasing transportation and logistics costs, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of The Priceline Group: Booking a Place for the Future
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Priceline Group: Booking a Place for the Future case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Priceline Disintermediation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Priceline Disintermediation operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of The Priceline Group: Booking a Place for the Future can be done for the following purposes –
1. Strategic planning using facts provided in The Priceline Group: Booking a Place for the Future case study
2. Improving business portfolio management of Priceline Disintermediation
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Priceline Disintermediation
Strengths The Priceline Group: Booking a Place for the Future | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Priceline Disintermediation in The Priceline Group: Booking a Place for the Future Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Priceline Disintermediation in the sector have low bargaining power. The Priceline Group: Booking a Place for the Future has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Priceline Disintermediation to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Priceline Disintermediation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Priceline Disintermediation is present in almost all the verticals within the industry. This has provided firm in The Priceline Group: Booking a Place for the Future case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Strategy & Execution industry
– The Priceline Group: Booking a Place for the Future firm has clearly differentiated products in the market place. This has enabled Priceline Disintermediation to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Priceline Disintermediation to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the The Priceline Group: Booking a Place for the Future Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Organizational Resilience of Priceline Disintermediation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Priceline Disintermediation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Priceline Disintermediation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Priceline Disintermediation has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Priceline Disintermediation is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Leonard A. Schlesinger, Anish Pathipati can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Priceline Disintermediation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Priceline Disintermediation has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Priceline Disintermediation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Priceline Disintermediation has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Priceline Disintermediation are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses The Priceline Group: Booking a Place for the Future | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Priceline Group: Booking a Place for the Future are -
Skills based hiring
– The stress on hiring functional specialists at Priceline Disintermediation has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Priceline Disintermediation needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Leonard A. Schlesinger, Anish Pathipati suggests that, Priceline Disintermediation is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to strategic competitive environment developments
– As The Priceline Group: Booking a Place for the Future HBR case study mentions - Priceline Disintermediation takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Priceline Disintermediation has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Priceline Disintermediation even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Priceline Disintermediation products
– To increase the profitability and margins on the products, Priceline Disintermediation needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Priceline Group: Booking a Place for the Future, is just above the industry average. Priceline Disintermediation needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Priceline Group: Booking a Place for the Future HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Priceline Disintermediation has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Priceline Disintermediation has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study The Priceline Group: Booking a Place for the Future, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study The Priceline Group: Booking a Place for the Future that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case The Priceline Group: Booking a Place for the Future can leverage the sales team experience to cultivate customer relationships as Priceline Disintermediation is planning to shift buying processes online.
Opportunities The Priceline Group: Booking a Place for the Future | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The Priceline Group: Booking a Place for the Future are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Priceline Disintermediation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Priceline Disintermediation can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Priceline Disintermediation can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Priceline Disintermediation is facing challenges because of the dominance of functional experts in the organization. The Priceline Group: Booking a Place for the Future case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Priceline Disintermediation has opened avenues for new revenue streams for the organization in the industry. This can help Priceline Disintermediation to build a more holistic ecosystem as suggested in the The Priceline Group: Booking a Place for the Future case study. Priceline Disintermediation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Priceline Disintermediation to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Priceline Disintermediation to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Priceline Disintermediation can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The Priceline Group: Booking a Place for the Future, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Priceline Disintermediation has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The Priceline Group: Booking a Place for the Future - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Priceline Disintermediation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Priceline Disintermediation can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Priceline Disintermediation can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Priceline Disintermediation to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Priceline Disintermediation to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Priceline Disintermediation can use these opportunities to build new business models that can help the communities that Priceline Disintermediation operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Priceline Disintermediation to increase its market reach. Priceline Disintermediation will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats The Priceline Group: Booking a Place for the Future External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Priceline Group: Booking a Place for the Future are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Priceline Disintermediation needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Priceline Disintermediation can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study The Priceline Group: Booking a Place for the Future .
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Priceline Disintermediation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Priceline Disintermediation demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Priceline Disintermediation will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Priceline Disintermediation
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Priceline Disintermediation.
Technology acceleration in Forth Industrial Revolution
– Priceline Disintermediation has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Priceline Disintermediation needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Priceline Disintermediation in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Priceline Disintermediation high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Priceline Disintermediation business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Priceline Disintermediation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Priceline Disintermediation.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Priceline Group: Booking a Place for the Future, Priceline Disintermediation may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of The Priceline Group: Booking a Place for the Future Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The Priceline Group: Booking a Place for the Future needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The Priceline Group: Booking a Place for the Future is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The Priceline Group: Booking a Place for the Future is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The Priceline Group: Booking a Place for the Future is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Priceline Disintermediation needs to make to build a sustainable competitive advantage.
