Online Retailing and Services

Case Study

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

a.     OpenTable had proprietary software that was user friendly and they had a mobile app that was cross platform.

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

a.     Customers required the ability to book reservations in real-time.  “The restaurant industry was slow to leverage the power of the Internet.”

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

a.     OpenTable “retooled its hardware and software to create the user-friendly ERB system and deployed a door-to-door sales force…from high-end restaurants.”  OpenTable also refocused to just four cities: Chicago, New York, San Francisco, and Washington, D.C.

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

a.     It is readily available once they subscribe and there is no additional hardware for cloud service.  Which means no additional cost to provide services for the restaurants.  It provides ease of use for additional service and storage.

Chapter Questions

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

a.     The basic assumption is defined in the text as, “It is assumed in ethics that individuals are free moral agents who are in a position to make choices.”

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

a.  I would be concerned with information being leaked on the internet especially with a type of sensitive information such as medical conditions. A type of technology that could protect your identity would be to use a tunneling protocol through a VPN and then encrypt your internet traffic.

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

a.     The text states that the, “Organizations that decide to participate in the safe harbor program must develop policies that meet European standards, and they must publicly sign on to a web-based register maintained by the Department of Commerce.”

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

a.     Cybersquatting is defined by “the practice of registering names, especially well-known company or brand names, as Internet domains, in the hope of reselling them at a profit”. Cyber Piracy is an umbrella term for online deceptive practices on the web that include Cybersquatting.

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

a.     In its most general sense, a fair use is any copying of copyrighted material done for a limited and “transformative” purpose, such as to comment upon, criticize, or parody a copyrighted work. Such uses can be done without permission from the copyright owner. The courts sided with Google because it deemed their work transformative.

Project Question

EDGAR – Wal-Mart vs. Target

Wal-Mart Stores Inc (WMT) is the world’s largest retail company with over 10,700 stores—4,500 of those in the United States. Its main rival, Target Corp (TGT), operates approximately 1,795 stores in the United States. In 2013, Wal-Mart dominated with a retail market share of 11.4 percent compared to Target’s 2.4 percent. We can have a glance at its balance sheet and market cap to see how huge Wal-Mart is compared to Target. As of the financial year ending in January 31, 2015, Wal-Mart’s total assets were $203.7 billion, about five times larger than Target’s comparatively modest $41.4 billion. In terms of market capitalization, Wal-Mart's $240 billion is three times larger than Target’s $79 billion.