E-Business ManagementSubmittedby:DaljitSandhuManjeetSinghAmanpreetKaurShiwani INTRODUCTION:OpenTable is anElectronic Reservation book (ERB) for the restaurants. This ERB softwareprovides a real-time map of the restaurant floor and helps restaurants in tablemanagement and guest management. People can make reservation by just a click onthe website. When you reserve table on OpenTable it requires your email addressand some other particulars which serve as a Customer Relationship Management(CRM) tool for the Restaurants.
Open Table is the leading player in the online restaurantreservation business having a mobile website, mobile app and website. OpenTable is an online reservation solution for making reservations on calls whichis termed as time consuming. It is acost-effective technique used by the restaurant owners to maximize theirseating ability. It has introduced an updated version of the reservation systemwhich is known as OpenTable Connect, having more features. It is continuing itsoperations over more than 40,000 restaurant and helping 21 Million dinners inonline reservations per month. OpenTable’s website is ranked at 2,514 all overthe globe and 531 in United States. There are 90% visitors from US on itswebsite followed by Canada 4.1%, UK 1.
7%. US market is the largest source ofrevenue to the OpenTable. Total 18,973 sites link to OpenTable.com which depictsit has a dominance in the North American Market. It is not only a user friendly e-commercewebsite but also the best application of new technologies such as Cloud, ERBetc.
OpenTable not only excels in Reservations Management but also in TableManagement, Guest Management and Marketing Management. It has indirectly helpedthe restaurants in growing their customer base. BACKGROUND:OpenTable was establishedin 1998 by an American Internet Entrepreneur, Chuck Templeton. Open Table wasoriginally incorporated in the name of Easyeats.com, in California. Open Tableis an online reservation solution for making reservations on calls which istermed as time consuming. Open Table is the leading player in the onlinerestaurant reservation business.
Initial strategy of the company was to expandits reach and target national food and beverage chains. After operating as a Private Company for 10years, in 2009 it opened its Initial Public Offering (IPO). Gradually, afterflourishing American market it headed towards the European market. In 2010, it acquired UK-based Top Table for$55 Million. Open Table is continuously growing in the United States, Canadaand Mexico. International expansions are planned beyond Germany, Japan,Austria, Belgium, Sweden, Switzerland and UK. In 2014, Open Table was takenover by The Priceline Group for $2.
6 Billion operating as a separate entity.HOW OPENTABLE WORKS?Hardware requirements:Touchscreen computer system. Software requirements: ERB software. OpenTableallows restaurants to build diner databases for improved guest recognition andtargeted e-mail marketing. The Open Table joins to the thousands of onlinereservation systems at OpenTable restaurants website and app.
Reservations arerecorded in restaurants electronic reservation book. ERB software is installedon a touch screen computer system serves as customer relationship managementsystem as well as helps in managing the guests and meal patterns. This ERBsoftware is updated periodically to provide better service. Open Table offers areward card to its loyal customers giving them 1 to 1000 points, which can beredeemed to get discounts. REVENUE MODEL OFOPENTABLE:OpenTable is working onthe two types of revenue model. Which are as follows:RESTAURANTS- OpenTable makes itsrevenue from restaurants in 3 ways which are:A) One-time installationfee – when a new restaurant avails the OpenTable services, OpenTable chargesone-time subscription fee.
B) Monthly subscriptionfee- another way in which OpenTable makes its revenue is by charging themonthly subscription fee from all of its clients who avails the services ofOpenTable.C) Transaction fee –OpenTable also makes its revenue by charging the transaction fee for everytransaction made through OpenTable. As the number of transactions throughOpenTable increase it also increase the revenue of OpenTable. GUESTS Booking through OpenTablefor clients was usually free but this business model was made in such a waythat guests should assist in viral marketing. So, through viral marketingOpenTable saved money by reducing advertisements as well as attracting new customersthrough viral, marketing. E COMMERCE MODEL OFOPENTABLE: OpenTable used two types of e commerce businessmodels which were as follows:BUSINESS TO BUINESSMODEL: in this business model OpenTable provided services to the all therestaurants who availed services of OpenTable. So, in this business modelOpenTable and restaurants were two main participants.
OpenTable providedservices like table management, guest management and customer relationshipmanagement to the restaurants.BUSINESS TO CUSTOMERMODEL: This was another business model which was used by OpenTable in whichOpenTable provided services to the clients or customers of the restaurants. Theservices like the booking of restaurants and checking available spots atrestaurant were provided to the customers. MARKET STARTEGY USED BYOPENTABLE: OpenTable made periodicchanges to its market strategy after making the plans and their implementation.Initially, during the start company planned to expand online reach of theirwebsite in 50 cities. But it was not that much success full. The expenses companyon advertising were ten times then the revenue company got with the help ofthat advertising. Then soon, Company retooled its hardware and software tocreate user friendly ERB system.
Door to door sales force was deployed to getsubscriptions from high end restaurants. This strategy became successful and played vital role in the expansionof the company and increasing the revenue of company. This strategy helped increation of successful local network of OpenTable. After the successfulcreation of local network same strategy was used in the whole country. MARKET GROWTH OFOPENTABLE? Initially company was getting only 1/10th of revenue ascompared to spending’s.
? In 2009, IPO was made and on its first day of trading,OpenTable’s shares climbed 59%. The share price in July 2013 was over $100,more than five times the $20 IPO price.? In 2013, the company’s total revenues were $190 million, up18% from the $161 million recorded in 2012.? In 15 years, the company has seated approximately 575million dollars, and it is currently averaging 14 million diners per month.? OpenTable now having approximately 40,000 restaurantcustomers. WHY WILL OPEN TABLECOMPETITORS HAVE A DIFFICULT TIME COMPETING AGAINST OPEN TABLE?It is the largest andmost successful business in online reservations market with the besttechnology.
The company uses user friendly ERB service and sells it throughdoor to door marketing strategy. The competitors don’t give online reservationservice feature on their websites. Theother competing companies don’t have access to many cities and countries overthe globe which reduces their competing capability with Open Table. No realtime reservation is provided by the other players in the market. Whereas, Opentable not only provides real time reservation but also the map of the seatingarrangement of the restaurant. The rivals have no option apply CRM systems andtrack customer behaviour. WHAT CHARACTERISTICS OFTHE RESTAURANT MARKET MAKE IT DIFFICULT FOR A RESERVATION SYSTEM TO WORK?The restaurants arehighly fragmented and local which makes national reservation system difficultto function. The restaurant industry is slow to leverage the power of internet.
For open Table to work it requires the restaurants to have wider reach andscale. The restaurants operate as sole proprietor or group of chains orfranchises, where owners ignore the marketing aspect and focus on hospitalityand cooking. The participating restaurants should be large in numbers, whichwill help open Table in attracting more crowd on its website and app in aparticular location. HOW DID OPEN TABLE CHANGEITS MARKETING STRATEGY TO SUCCEED?Open table createdElectronic reservation book (ERB) and provides door to door sale force toattract high-end restaurants. It shifts its relationship from a “transactional”relationship to “experiential” relationship. Open table help to advertise theservice through various kinds of social media and e-invites. This helps inprogress of online transactions which is stronger marketing strategy thandepending on online restaurant reviewers.
Consumer can pay for a meal throughopen table app. User can find the nearby restaurant by using GPS through any ofits mobile support like- mobile website and mobile application. WHY WOULD RESTAURANT FINDTHE SAAS MODEL VERY ATTRACTIVE?SaaS is Software as aservice which is software distribution model. In this model, applications arehosted by third party and customer can get them through internet. Cloudcomputing, IaaS (infrastructure as a service) and PaaS (platform as a service)are three kinds of SaaS model.SaaS allow allrestaurants to participate in the service.
This software allows customers topay for what they need, not for the hardware. It provides restaurants withprofessional, reliable formula to secure clients. Restaurants like SaaS becausethey go online and get the software through subscriptions without buying it.SaaS model helps to save time and cost of customers.
The customers do not haveproblems of software maintenance and even new hardware is not required.