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Optimization and Expansion at Open Table Case Solution

Solution Id Length Case Author Case Publisher
1078 1154 Words (7 Pages) Benjamin Edelman, Karen L. Webster Harvard Business School : 915003
This solution includes: A Word File A Word File

This case talks about the restaurant reservation service initiated by Mr. Templeton back in 1999. The plan was to create an online network that matched any restaurant’s unused capacity with consumer demand. The idea was quite successful in the initial run and by 2008; the brand had managed to register significant improvement by attracting some of the top restaurants to start using its service for making reservations of customers. The success rate could however not be maintained by the company as soon others in the field started using technology to come up with cheaper solutions for customer reservations than those offered by Open Table. Moreover, several restaurants had also by then started interacting with their customers directly through Facebook and other social media avenues. This has put Open Table at a serious disadvantage and unless it introduces major innovations the customers for Open Table will keep going to the competition instead.

Following questions are answered in this case study solution

  1. Introduction    

  2. The Product Offered    

  3. Key Issues

    i. Company Fees    

    ii. Social Integration    

    iii. Competition 

  4. Proposed Solutions

    i. Justify the Company Fees by Identifying a Linkage    

    ii. How to undergo Social Integration

    iii. Priceline Acquisition

  5. Conclusion    

  6. References 

Case Analysis for Optimization and Expansion at Open Table

2. The Product Offered

Open Table had initiated a technological update in the restaurant industry. The company started an Electronic Reservations Book (ERB) which was software that could be installed on any restaurant’s touch screen system. The restaurant would create a visual representation of their seating plan and then whenever some reservations need to be made they can easily select the seats according to the floor plan and allocate them to the guests coming to have food. The offer helped restaurant staff stay updated with the current reservations as well as take out any trends of reservations the same customer had booked in the past. Restaurants, who would agree to work with Open Table for using this service in the facilitation of reservation, would be asked to pay a base price for getting this software and then they would be required to pay for any additional features which they wanted to obtain. The complete list of features that ERB began to offer meant a significant amount of revenue generation from each restaurant could be realized.

3. Key Issues

There were quite a few issues prevalent in the restaurant service businesses which were being faced by Open Table. Some of the major issues have been highlighted below:

i. Company Fees

As given in the case, each restaurant that did or did not sign up with Open Table had one big concern. The restaurant found fees charged by services such as Open Table quite high. The logic that was given by Open Table’s management was that this was not a lot of money. Open Table said that it received only a dollar for every 43 dollars received by the restaurant itself. However, the criticism started pouring in from 2010 onwards, and they even argued that the reservation of 4 people meant that the entire profit went to Open Table.

ii. Social Integration

This is the age of digital media and marketing has become much easier. Many restaurants and even corporations have realized this changing trend and have started their own dedicated Facebook pages. Moreover, companies these days are now looking for new and innovative ways to look for customer feedback so that they can design new and better products and services for them (Londhe, 2014). The ERB solution offered by Open Table did not allow its customers to get feedback from the people who had dined in their restaurant. However, by simply creating a Facebook page for free, these same establishments could get instant feedback from their clients on the page as Comments and then they could use the feedback to come up with new products which would result in a higher customer base. This sort of social integration with the customers was a feature that was lacking the ERB solution presented by Open Table to the restaurants.

iii. Competition

Slowly and gradually after Open Table started its operations competition started pouring in. Competitors like CityEats, Ureserve, Tripadvisor launched their services and started offering a wide variety of deals from reservations to directions to reviews. This meant competitive advantage of the company Open Table was now much reduced.

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