Opentable Ecommerce Business Model
Essay by taboun • January 19, 2019 • Case Study • 395 Words (2 Pages) • 640 Views
OpenTable is an online restaurant reservation service company. The company was founded by Chuck Templeton, OpenTable was laer launched in 1999 in San Francisco and Chicago. The company based around an electronic reservation book (ERB) and mobile applications. The Open Table price method is through a mobile payment service requiring a credit card. The interaction between OpenTable and the customer involves a guest center cloud-based platform. Priceline acquired OpenTable for $2.6 billion in 2014, the company was bought for 46% premium over the regular market price.
Some of the main issues OpenTable faced were new competitors, “block outs”, complaints about the fees and filing an IPO in 2009, after the worst financial crises. OpenTable’s main competitors are Bookatable, CityEats, Groupon, Yelp, TripAdvisor and UReserv. Another issue is that OpenTable gets a block out from fine dining restaurants during prime hours, prioritizing regulars and customers who reserve through phone calls. Many restaurants complained about the subscription fees. Restaurants must pay a one-time set up fee of about several hundred dollars, plus up to several thousand dollars a month in various subscription fees, or risk losing customers to competitors. One of OpenTable’s biggest mistake was to decide to go public at the worst time. OpenTable filed for its IPO in 2009, right after the worst financial crisis. The financial crisis caused stocks to drop by 67% in 2011 only.
OpenTable’s business model
Value Proposition | 24/7 customer service Matchmaker roll ERB subscription Values for customers and restaurants |
Revenue Model | Monthly ERB subscription fee Performance per seat dinner fee OpenTable Connect OpenTable optional POP marketing program |
Market Opportunity | 26 million customers per year Signed up for 40% fine dining restaurants Market expansion outside of USA |
Competitive Environment | Competitors leveraging cloud-based technologies to enter market Similar reservation companies: Groupon, Yelp, TripAdvisor, CityEats, UReserve, and BookATable Similar mobile payment methods: PayPal, MyCheck, and TabbedOut |
Competitive Advantage | 24/7 website availability/service (available for IPhone/Android mobile services) One of the largest online reservation booking service Customers can access OpenTable through various platforms First mover advantage |
Market Strategy | OpenTable Experience OpenTable dining rewards OpenTable payment Other networks that chose to affiliate with OpenTable (Ness Computing, FoodSpotting) |
Organizational Development | IT based servicing company Centralized system 10,000 restaurants Headquarters in San Francisco |
Management Team | Founder: Chuck Templeton ● CEO (past) & Executive Chairman (present):Jeff Jordan ● CEO: Christa Quarles ● CFO: Matt Roberts ● CFO: Jeff McCombs ● CTO: Joseph Essas ● VP & General Counsel: Connie Chen ● Senior VP & Product: Prasad Gune ● Senior VP & Marketing: Scott Jampol ● Senior VP & Global Sales/Restaurant Services: Andrea Johnston |
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