Chapter 9 Assignment
Case Study Questions
1) What characteristics of the restaurant market made it difficult for a reservation system to work?
∑ The restaurant market made it difficult for reservation systems to work was because the restaurant industry was slow to utilize the power of the internet. This is because the restaurant industry is more fragmented and local. When OpenTable was founded, most restaurants didnít have computers, which meant having a system for online reservations would be difficult without the proper hardware. It was also difficult because not every restaurant has the same revenue, making it harder for smaller places to fund this subscription-based software.
2) How did Open Table change its marketing strategy to succeed?
∑ OpenTable did a few things to succeed in the market. The strategy included them targeting big chain restaurants to expand quickly. They also paid restaurant reviewers for links to their website, a form of marketing. They implemented a user-friendly Electronic Reservation Book while also using a door-to-door strategy to attract subscriptions from big high-end chain industries. A combination of marketing that did well for them and really grew their base. They also started using social media to market themselves. They also follow up with each customer who used them via email to ask how their experience was. One last feature they have implemented is using a mobile site with GPS to help users find restaurants while also being able to make reservations.
3) Why would restaurants find the Saas model very attractive?
∑ This is attractive to restaurants because they donít have to buy software and hardware and install it manually themselves. They donít need to worry about that; therefore, they can focus on what they do and get a subscription to a system that is all ready to go. Also, restaurants of all sizes can participate in this type of system. They only need to pay for what they need. This allows restaurants to save money and save time in configuring the system. They just worry about the restaurant and let the service providers worry about the maintenance of the software and hardware while only focusing on paying their subscription.
4) What challenges does OpenTable face?
∑ OpenTable faces some crucial challenges from their competitors like Priceline. They need to either match or have better features while also offering the same or cheaper price, like and market. They were also behind the curve to some competitors by being late with some payment features, such as letting customers reserve a table online with a credit card. Something that restaurant owners had complained about was the price. Where some competitors had cut the monthly subscription cost of $250 from OpenTable to just $99. All these things play factors in the obstacles OpenTable faces.
2) Find an example not mentioned in the text of each of the four types of online retailing business models. Prepare a short report describing each firm and why it is an example of the particular business model..
∑ Direct-to-consumer model: Many of the startups begin with this business model due to low customer numbers and better control. Any startup that we can find in platforms such as Kickstarter are usually operating as direct to consumer model (at least during the initial phase). One such company is Dollar Shave Club, which we learned about earlier in this course. These companies manufacture the products and ship it directly to the consumers
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.
∑ Collection of personal data: Because of privacy issues, retailers must send notifications to the person whose personal data is being collected. Also, letting them know what for. The person may accept or reject any type of engagement if they donít feel comfortable.
∑ Intellectual property protection: Retailers need to send marketing emails to the potential customers. Since it goes to so many people, there is immense chance of sealing the brand, logo, and language. Therefore, protection this kind of material is a must.
∑ Barrier from local retailers: Online retailers can sell goods at the lowest-ever price. It becomes possible because of nonexistent intermediaries. The product comes directly from manufacturer to the consumer. Therefore, consumers are interested and much more likely to purchase products from online retailers and it may hurt the local businesses and retailers, causing their barriers and protests.