Adrian Leal

ITS 380-001

Shin-Ping

Chapter 9

 

Case Study

 

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

OpenTable has a large number of restaurants available, and a larger consumer database than competitors. Also, its software is consumer friendly, so it makes it easier to use for both costumers, and diners. OpenTable has more options than competitors and that is why the competition is having difficulties competing against them.

 

2.      What characteristics of the restaurant market make it difficult for a reservation system to work?

It is complicated because they are many different categories of food services, and because it is not easy to control or have access to small local restaurants.

 

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

They paid to online reviewers to include links to OpenTable as well as software that was user-friendly for the consumer. These two factors, plus the convenience of the service, helped to expand their business rapidly.

4.      Why would restaurants find the SaaS model very attractive?

Because customers would not need to pay for software or an application, they just need to go online and make a reservation. It also saves time and money for both restaurants and clients.

 

Questions

 

1.      Why were so many entrepreneurs drawn to start businesses in the online retail sector initially?

Because they believe it would be beneficial and more efficient than the traditional way. An online business can reach a higher market, not just the local market that a traditional store would reach. For those reasons, and also the online selling trend of the recent years, make starting an online retail store a better decision nowadays.

 

5.      Name two assumptions e-commerce analysts made early on about consumers and their buying behavior that turned out to be false.

Analysts said that consumer would be rational and cost-driven. However, consumers buy from reliable brands even if they have to pay a little extra, and value customer experience, reliability, and trust.

 

10.  Which is a better measure of a firmís financial health: revenues, gross margin, or net margin? Why?

The best measure that a health company could use is net margin, because it shows how successful the company has been at making a profit. This measure will show the real revenue for every patient attended.

 

15.  What is the most common use of real estate Web sites? What do most consumers do when they go to them?

The most common use of real estate, and what most consumer do is to first look of the different properties available, compare them, and do a first research to determine what they really want.

 

20.  Why are on-demand service companies viewed as being disruptive and controversial?

These companies have started a new industry never seen before. As new services, they are disruptive, but since some regulations are not perfectly defined for them some of their features are controversial.

 

Project

3.      Drawing on material in the chapter and your own research, prepare a short paper describing your views on the major social and legal issues facing online retailers.

Some of the major social legal issues that online retailers face include:

         Protection of intellectual property and mechanisms to protect their rights

         Consumerís privacy data storage and use policies

         Security and information protection against cyber piracy, cyber attacks, and other similar attacks from cyber criminals

         Mobile Experience and Engagement. Mobile devices are increasing they share among consumers and it is important to properly reach that market.

         Acquisition & retention of consumers. Customer loyalty and customer experience are among the main goals of modern corporations.

All these issues threat the way online retailers operate. Every day more information that is personal is storage on their server, and a security attack will really affect their popularity on the web and among users. For that reason, security and protection mechanisms are one of the most important thing to apply to their web sites.

In addition, new inventions, such as the 1-click buy from Amazon, can provide a competitive advantage. Intellectual property, protection of patents and copyright rights are sometime difficult to establish. As shown in class, Internet provides access to many documents and information that can be copied or duplicated. So many cases have already be taken to the courts, and since a higher volume of activity happens on the web, this number is expected to increase.

Convenience and innovation are changes todayís industries. Mobile devices are expected to change online selling activities during the following years. Therefore, online retailers must adapt their strategy to this market opportunity/trend.