ITS 380-001 Global E-Commerce Systems

Xueying Mei

CH9 – Online Retail and Services


P.656   Case Study Questions:

Q1: What characteristics of the restaurant market made it difficult for a reservation system to work?


It is difficult to make a reservation system work based on several characteristics of the restaurant market. First, the restaurant industry, as the case study mentions, was slow to leverage the power of the Internet. Most restaurant websites are not advanced enough to be able to take reservations for a particular day and time. As a result, the MONTENEGROrestaurant reservation system is constrained by times that restaurants are opened, and when the business has a host or hostess answering the telephone. This is a “time consuming, inefficient” (Laudon, Guercio Traver, 2012) system prone to errors. Furthermore, there is a fragmentation of systems within the industry, with each restaurant utilizing a different system for their operation. This makes it difficult to centralize the system. In addition, each restaurant offers only a small portal to consumers, so there is not a lot of visibility for restaurants without also publicizing one’s competitors. Unlike the airline industry, there are no data aggregators that “collect and manage seating inventory……or retailers that access this data” (Bass, 2011). Instead, each restaurant is operating as a sole proprietor or grouped with other restaurants owned by the chain or franchise or proprietor. This is particularly true since most restaurants are small businesses, run by hard working entrepreneurs that more often specialize in cooking or hospitality rather than in marketing. As a result, the reservation system, while a needed and critical part of the operation, is often an afterthought for restaurateurs, and certainly not seen as a potential marketing device to add consumers and value to the restaurant operation.


Q2: How did Open Table change its marketing strategy to succeed?


OpenTable’s strategy included paying online restaurant reviewers for links to the OpenTable web site and targeting national chains for fast expansion. They retool its software and hardware to create a user friendly ERB system. OpenTable also created a user-friendly Electronic Reservation Book (ERB) and they deploy a door-to-door sales force to attract subscription from high-end restaurants, this combination of e-commerce, useful and friendly technology really worked for them. The company was able to grow its customer base. OpenTable developed many programs to help publicize the service through “e-invites”, satisfied customers, and social media. This gives the company ongoing traction to succeed, which is a much stronger marketing strategy than relying upon online restaurant reviewers. OpenTable now uses the diners it seats as reviewers, following up with each reservation via e-mail to ask the diner to review the restaurant for other diners. Also, OpenTable offers mobile support through a mobile Web site and mobile applications to help users find restaurants with the help of GPS as well as book reservations.


Q3: Why would restaurants find the SaaS model very attractive?


Restaurants find the software as service or SaaS model attractive because it allows businesses of all sizes to participate in the service. With SaaS, expenses change from being capital expenses to operational expenses based primarily on consumer use. The SaaS model allows customers to pay for what they need- in this case based on the number of diners that are seated through the system- and avoid overpaying for hardware. SaaS also allows customers to avoid needing expertise in managing a hardware infrastructure. A SaaS model provides restaurants with a professional, consistent formula to secure customers. SaaS like OpenTable maximizes the functionality previously utilized through the archaic reservation system of the restaurant industry and propels it to the 21stCentury with added features that leverage the power of the Internet, to improve the final product.


Q4: What challenges does Open Table face?


OpenTable faces major challenges from their competitors in terms of matching them with the features in the services they provide as well as on the subscription fee that these competitors have come up with. OpenTable was late with the payments option. Its competitor startup, Resy allowed restaurant owners to allow customers to reserve tables by paying through credit card. On the other hand, Reserve and Yelp both undercut the monthly subscription of $295 of OpenTable to just $99 and $249 a month respectively. This is a major pain point that restaurant owners complained about.

P.659-660   Projects:

Q4: Choose a services industry not discussed in the chapter (such as legal services, medical services, accounting services, or another of your choosing). Prepare a 3- to 5-page report discussing recent trends affecting online provision of these services.


A legal service means guidance or support or free service that gets provided in the field of law. In other words, according to section 2 (1) (c) legal service includes exposition of any service in the management of any other dealings or affairs before any court or other jurisdiction or committee and the giving of any consultation of any legal matter.

The basic things included in legal service are given below: 1. Legal services are provided in managing legal dealings. 2. Legal dealings may be taken place before courts or committee or any other jurisdiction. 3. Legal service includes legal consultation also.

A legal aid is a hope by which poor people can get justice and can administer their rights. Each and every state has their different administrative rules. Before legal services authority act get passed, legal aid was administered by the states under administrative rules. In year 1983, the bar council of India framed legal aids rules. According to the rule number 2 (G), legal aid in the legal portrayal introduced by a representative of legal profession, that includes all the other admissible services. The definition was prohibitive in manner as it included portrayal by advocates only. In this way, no detailed definition was available.

Post-litigation legal services:

The basic duty of post litigation services is to give free legal services to poor people and those who are socially distressed. The Supreme Court had made a strict decision in many occasions that only experienced advocates can be seat under the panel of post litigation services as compared to inexperienced advocates because experienced advocates are more capable to represent or portrayal the grievances of poor people in a proper manner. Legal sorority must respond in an anxious manner. This service includes the well-structured and effective planning for adequate planning campaign for alertness of objects of provisions of legal services committee act must be evolved.

Many state legal service authority or committee tried to solve many social, economic and political issues with the help of legal aids. There are various other services, which are administered under many legal service schemes. The two types of legal services are given below:

1. Pre-litigation legal services

2. Post-litigation legal service

One site that is company N provides legal services, forms, and occasionally helps on legal services. Company N had made environment of legal systems that works for everyone (not just lawyers). Company N making so many efforts to help all people to handle their own legal matters. It helps people in a way that they work well with their lawyers. This site offers plain English books, software and legal forms. This site is providing 24-hour access to legal help.


Q5: Together with a teammate, investigate the use of mobile apps in the online retail or financial services industries. Prepare a short joint presentation on your findings.


The fourth installment of our mobile app adoption across industries is here. For those new to this series, we started with The State of Mobile App Adoption Across Industries, giving an holistic view of all the industries, followed by focus on retail with The Impact Of Mobile Apps On Retail and then shifting the focus to the healthcare industry with the post, How The Healthcare Sector Is Embracing Mobile App Technology in 2015.

If you stay up with app trends, you might be wondering why we choose an industry that is almost at the bottom of mobile app adoption. Indeed, it is one industry that is hyper sensitive, as it involves money and lots of risk.

Yet given all the odds, this industry is gaining traction – financial apps are opened 30% more compared to other categories, as reported by an ADI report.
A research report published by Adobe Reasearch, 2014 has some encouraging results, sample this –

In the US, about 50% of top 25 financial institutions now offer advanced featured mobile apps in the areas of money transfers and depositing services and so on.
More than one third of banking customers of major players use mobile banking on a regular basis

We understand these aren’t reasons enough to put your banking information at risk, so read on.

Adobe research conducted a massive study to understand why there has been such slow app adoption when it comes to money. The results of the survey were interesting –

The mobile phone has been the major driver for consumers (divided into two categories as general consumers and mobile elites) to access personal financial information on mobile websites, with a majority of them remarking that the user-experience was positive and satisfying. Indeed, the mobile savvy consumers reported the highest rate of satisfaction (a resounding 64% satisfaction rate).

But what about the security risks involved by accessing accounts via apps?

A very justified concern, indeed. But the financial institutions are also aware of these concerns and do not take them lightly. Banking institutions have recognized the mobile app adoption penetration rates and are providing their apps with robust security features. These apps also tend to be more user-friendly than transacting via banking web sites.

This is a surprising revelation that a large number of consumers trust and share their all-secretive info. It is a healthy indicator of growth. When compared to other industries, financial services stand at the third position of highest mobile adoption.

The consumers also had a clear cut preference when it comes to opting a mobile website and a mobile app – they prefer mobile apps.

So, what activities do consumers perform?

As mentioned earlier, the findings have been split two groups – general consumers and mobile elites for the year 2014.

Percentage of mobile respondents that engage in financial activities

[Percentage of mobile respondents that engage in financial activities]

Since it is such a competitive landscape, acquiring customers, retaining and keeping them engaged with specialized services and solutions is imperative. Thus, creating a positive customer experience, simplifying the account opening and managing accounts has been an area where the financial industry is excelling at.

The top activities that were performed on these banking apps were researching, applying and opening of new accounts.

Again, another encouraging behavior is 80% of consumers reported reviewing bank account information or check balances as a frequently performed activity.

One area of concern, however, has been in terms of researching for new financial accounts or insurance policies, as only a mere 19% perform this activity. This could be a factor of concern as it involves creating better experiences, yet, can also been seen as an area of potential opportunity.

The mobile savvy is the highest to adopt and perform the mentioned activities, with 88% of them preferring financial apps over mobile sites to carry out banking activities. The app preference stood at 54% as against the mobile site preference, at 46% respectively.

Though almost being at the bottom of the app adoption rates, it is the financial services that can boast of having the strongest band presence amongst other sectors. This only emphasizes the importance of not having a superficial opinion on the sector.

To summarize, it is the right mix of customer friendliness, the unique personalized experience and, most importantly, the promise of security that consumers are looking for. Those that quickly and rightly get these in place are the ones that are to benefit.

So, how about the financial apps those are available in the market?

The results are again encouraging given the number of apps available. There are a large number of consumers that are app-savvy and are already using financial management apps to help manage their finances.