Opentable - Your Reservation Is Waiting

[pic 1]

Case Study: Your Reservation is Waiting

Your Reservation is Waiting Case

OpenTable Background

OpenTable was founded by Chuck Templeton in San Francisco, California in 1988. It has more than 32,000 restaurants uses the hardware and software system of OpenTable. Its presence includes USA, Canada, Mexico, United Kingdom, Germany and Japan.

This company is the world’s leading provider of online restaurant reservations. It finds seats of restaurants for more than 16 million diners each month. In North America, 47% of the OpenTable reservations are made on one of their mobile apps. OpenTable charges the restaurant an initial fee, the hardware and software used in the restaurant, and monthly subscription fee and $1 per seated customer. For the customers, this company offers free reservation but marketing through email invitations.

OpenTable offers a fast and efficient way of reserving a table in a restaurant. The app shows the available seats on real time. If the customers want to leave a review about the restaurant they can do it by rating and leaving a comment about their experience. The products of this company are the hardware and software systems for restaurants, and website and mobile app for online table reservation.

Problematic Situations

1. Expensive for Small Restaurants: 

OpenTable charges $1 USD per seated client, additional to the monthly cost, software and hardware. Not so many restaurants can afford this cost.

1. Web-Based Problems:

There can be a lot of viruses and technical errors that can lead to system interruptions on OpenTable. “This means that there is the potential for viruses, technical errors, and foul play. Any networked system is vulnerable to interruptions for a number of reasons, in any occurrence there is a detriment to the reputation of the system should an interruption occur. So long as OpenTable can maintain their network security and sustainability then their reputation will not be harmed” (Corbishdale, 2012).

1. Future competence:

Many companies want to provide a service like OpenTable. Currently are a few companies like Yelp Seatme that offers the same service as OpenTable but it’s cheaper than OpenTable. The customer segment is identified, and the market segment is big.

1. Not known service:

A lot of people doesn’t know about the service provided by OpenTable and only a few restaurants in Mexico use the service.

Possible Solutions

1. Expensive for Small Restaurants: 

Charge the fees according to the size of the business. With this change, many small business could invest on the service and have more customers.

1. Web-Based Problems:

Use the latest technology, be in constant innovation, develop anti-hacking software and invest on high security servers. If OpenTable can maintain the network security and sustain their reputation, the company will have a lot of customers.

1. Future competence:

Make research about new features they can provide to the users. Develop a unique business model that can’t be copied by the competence and offer a good Customer Service.

1. Not known service:

Make a global marketing campaign and apply introduction discounts to the restaurants in order to have them as clients. Show them the benefits of being on the electronic system.

Questions

1. Why will OpenTable competitors have a difficult time competing against OpenTable?

Because OpenTable offers a free, fast, efficient a real-time way of making a reservation in a restaurant. For the restaurant it helps to improve the customer service, to maximize the attended customers and also to have good food management because the restaurant can prepare before the ingredients of the asked dinners. OpenTable has developed a webpage and apps of iOS and Android to make it more accessible to the users.

1. What characteristics of the restaurant market make it difficult for restaurants to run a reservation system?

• The restaurants need to have technology and show their menu online.
• They need internet and real time access and update the occupied tables.
• Software and hardware for instant booking.
• The majority of the restaurants are local, not so big like the restaurant chains and they have their own reservation system.

1. How did OpenTable change its marketing strategy to succeed?

The company remodeled its hardware and software to create an easy to use ERB system and deployed a sales force to attract subscriptions of restaurants of high level.  Also, OpenTable developed programs to publicize the service through electronic invitations, satisfied customers and social networks.

1. Why would OpenTable find that SaaS is very attractive?

Because the system doesn’t need additional hardware costs. One hardware per restaurant is sufficient, and if it requires more storage or additional services, OpenTable doesn’t need to install anything more because everything is “on the cloud”. The service is ready to function when the restaurant pays the monthly subscription, there is no need of setup costs.

References:

Corbishdale, Nick. (2012). OpenTable. Wikinvest. Retrieved on August 28, 2015 from: http://www.wikinvest.com/stock/OpenTable_(OPEN)

Davidson, Jamie. (2014). OpenTable – Opportunity. Correlated Causation. Retrieved on August 29, 2015, from: http://correlatedcausation.com/opentable/

Laudon, Kenneth. (2014). E-commerce 2013 Negocios, tecnología y sociedad. México: Pearson.

Levin, Rachel. (2012). Are We Over OpenTable? Huffington Post. Retrieved on August 28, 2015 from: http://www.huffingtonpost.com/rachel-levin/open-table_b_1321874.html

OpenTable. (2015). Our story. OpenTable. Retrieved on August 30, 2015, from: http://www.opentable.com/about/

Results of the Plenary Session

Conclusions from the plenary session

OpenTable is a leading provider software that makes reservations online, tables and guest’s management in different places around the world. The value proposition is that it allows people to view the restaurants in real time and where they are (by using the cell phone GPS), the firm offers an advanced software that is periodically updating according to the available seats. Customers also have the opportunity to choose the best option for them and to see the menu and its prices to know what to order. It’s a comfortable way to order what the customer wants where he wants without having to search on the webpage of every restaurant. Also, “Pay without the wait” it’s a new feature that OpenTable is using. The clients are allowed to pay on the app, instead of waiting the check on the restaurant. “OpenTable focuses on features, rather than benefits” (Thiel, 2014). This company offers the restaurants the possibility to fill the available seats without having to hire someone to be on the phone 24/7, plus giving the satisfaction to the customers of making their reservation easier, efficiently and online. OpenTable increases restaurant profitability by redirecting more customers to it at low cost.