Undral Naran

ITS 380 Global E- Commerce

Chapter 9


Case Study Questions


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

OpenTable is a successful growing company that has built great advantage for itself over time. They are extremely accessible from many different digital platforms such as mobile application, mobile website and iPad application. They also offer their own reservation software system to restaurants. Once restaurants start operating on certain platform, it is expensive for them to switch. In this case, OpenTable is a strong competitor because many restaurants who are using Opentable software, are not willing to change it anytime soon because of the expense. Another factor about OpenTable is that they are one of the pioneers in this field of business. Since they have been in the field for so long, they have already acquired many of the restaurants already and once those businesses accustomed to using particular software like OpenTable, it is hard to change their minds.


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

The fact that restaurant business is highly localized and highly fragmented is very challenging for a reservation system to work. Most of the restaurants are independent and small scaled so it makes each restaurant to be highly individual. It was challenge for OpenTable to gather these individual businesses under one single market.


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

Instead of paying for online restaurant reviewers and open to restaurant all over the country, OpenTable started focusing on four target cities: Chicago, New York, San Francisco and Washington D.C. They also retooled its hardware and software to create the user- friendly ERB system and deployed a door to door sales force to solicit subscription from high end restaurants. Their new marketing focus was on e- commerce, User friendly technology and personal touch.


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

It is very convenient for customers because they donít buy the software and install it on their computer. They simply go online and get the software functionality through subscription. This model helps also because restaurant industry was slow to leverage the power of internet. When OpenTable first started, restaurants didnít even have computers let alone the software system to manage tabling and reservations.


††††††††† Projects


1.   Access the EDGAR archives at Sec.gov, where you can review 10-K filings for all public companies. Search for the 10-K report for the most recent completed fiscal year for two online retail companies of your choice (preferably ones operating in the same industry, such as Staples Inc. and Office Depot Inc., Amazon and Walmart, etc.). Prepare a presentation that compares the financial stability and prospects of the two businesses, focusing specifically on the performance of their respective e-commerce operations.

I have visited Nordstrom and Neiman Marcusís 10-k and 10-Q. They are both department stores mainly popular on the west coast. They both compete pretty closely since they have the same retail business structure that mainly sells high- end products.

a.    Nordstrom

Nordstrom is very successful company that is continually expanding its business online and offline. As a customer, I know they have such great customer service and easy, user- friendly online platform. From analyzing their 10-K on EDGAR, their e-commerce is kept increasing and expanding.

b.   Neiman Marcus

Neiman Marcus is famous department store especially in California. They are close competitor of Nordstrom. According to their 10-Q, their e-commerce is experiencing downward decrease in 2016 compared to 2015.


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.

a.    Omni- channel Merchants: Nordstrom.

†Nordstrom is a department store that sells consumer goods. They have physical stores as well as rigorous online website where they offer their goods.

b.   Virtual Merchants: Ticket Spin.

†They are online show ticket merchandiser. They donít have actual store of location to sell show tickets. They aggregate all the current and future events in the entertainment industry and sell their ticket to consumers using online service.

c.    Catalog Merchants: Costco.

†Costco has physical store; however, they send catalogs to households periodically with coupons and all the informations. Catalog marketing is one of their strongest marketing tool.

d.   Manufacturer- Direct: Coach.

†They have independent Coach stores and outlets that they only sell their Coach products.