As digging into the state of Orbitz as a company continued one of the key statistic about the company, that was left out of the article from the Wall Street Journal, was the Profit margin. As of this year Orbitz had a profit margin of -4.26% according to Yahoo Finance, which is never a good thing. What that means is that Orbitz was not just having trouble making money, but rather was losing money over the course of the year. So you may be thinking that this small percentage is easily recovered, but Apple, a successful company, in comparison had a profit margin this past year of 27.13%. These are two vastly different numbers and may help explain why Orbitz had to resort to less equitable, but more profitable, methods of business.
If a company like Apple can have such fantastic success with their business model, then they must feel fairly comfortable with the way that they operate at present. Orbitz is in an entirely different situation because a company constantly trying to charge less for their service, rather than being a luxury device provider, will naturally have a less profit just to break even. If the company needs to show improvement and growth in profit margins however, then it makes sense that Orbitz would try a different method of doing business. This lead them to start questioning the way they were targeting their customers because it would take large amounts of change in the company to create a slight improvement in profit. Orbitz must have come up with this plan to charge Mac users more for flights and hotels in hopes that the small influx of money from their Mac customers buying nicer flights would provide them with just enough breathing room.
Although Orbitz was presenting more expensive options to some of their customers they weren’t charging more for the same option, but rather were presenting the higher end options to the Mac customers first. The main issue that appeared on the day The Wall Street Journal wrote their article was charging customers who used Macs more for the same service. Although Orbitz does make it more difficult for Mac users to find value options it still seems to be far less uneven a deal than at first glance. The company is not only trying to save its skin, but hopefully turn the company around. It is struggling to stay afloat, but this controversial and creative method of targeting customers may be what they need to go from red to green. It may not make their customers happy, but it is definitely an intriguing way of doing business and should be watched closely by other companies who do similar kinds of electronic commerce.