Optimization And Expansion At Open Table Harvard Case Solution & Analysis

INTRODUCTION

Situational Synopsis

Open table was founded by a former army ranger, Chuck Templet on, in San Francisco and Chicago as an online reservation service providers to the restaurants. The top management of the company has targeted well renowned restaurants all over the country which were facing the problem of lost seats.

Open table was the first company to initiate the concept of online seat reservation.The top management of the company has made its back breaking in order to ensure that the quality services and real time services are delivered to the customers of the company.

Being the first player in the entire Restaurant Reservation Industry (RRI) allowed the top management of the company to capitalize over the major share in the entire industry. Thus, this further allowed the top management of the company to enhance company’s overall customer base and readily earn the customer’s loyalty towards the brand.

The top management of the company expanded its operations to Canada, Germany, Japan, Mexico, and United Kingdom, as well as facilitated approximately 32000 restaurants situated at various locations across various countries and facilitated nearly 158 million customers.

The top management of the company launched its first mobile app in 2008, in which the top management of the company gave access to its customers to reserve seats through their cell phones. In addition to this, the company had a net income of $ 33 million in the financial year 2013, as well as the company owns total assets amounting to $ 310 million.

Problem Statement

How to stand strong in the highly challenging and competing industry, as well as, how to tap into new potential markets”

EXTERNAL ANALYSIS

Industry Structure and Trends

In order to identify the industry’s structure, following factors should be analysed

Political Factors

There are fewer regulations imposed by the Government to the RRI industry.Moreover, the Government does not exclusively support the industry;neither does it provide any subsidies to the players in the industry. Thus, the effect of politics on the entire industry is negligible.

Economic Factors

Since the demand for restaurants has been increasing day to day, this creates the opportunity for the company to enhance the operations of the company. Increasing demand for restaurants also increases the overall demand for the reservation services. In addition to this, the level of income of the customers also has a direct effect on the business of the company.

Technological factors

Technology has a major effect on the business of RRI industry. The rapidly changing technological advancements in the industry affects the business of the company at a wide spread scale. Therefore, in order to cope-up with other players in the entire industry, the top management of the company should ensure that the company uses latest technologies efficiently and effectively.

Competitive Situation Analysis

In order to analyse the competitiveness of the industry, porter’s five forces analysis has been done

Threat of New entrants:

The company has a strong brand image as well as the company has earned the loyalty of its customers over the period of time. In addition to this, in order to establish a company in the entire industry, a huge setup cost is required. Thus, this depicts that the overall threat of new entrant is LOW.

Threat of Substitutes

There are various companies providing nearly similar services to the customers, thus, this increases the overall threat of the substitutes. However, since the company has earned its customers’ loyalty, therefore this reduces the overall threat of substitutes. Thus, the threat of substitutes is assessed to be MODERATE

Bargaining power of customers

Since there are many players operating in the industry, this provides the customers with a wide spread scale of choices. In addition to this, the switching cost of brand is very low. Thus, this increases the overall bargaining power of customers.

Bargaining Power of Suppliers

Excellence of quality services requires usage of effective technologies. There are a few number of suppliers of effective IT equipment and services, whereas, there are large number of players in the entire industry. Thus, this increases the overall bargaining power of suppliers.

Intensity of Rivalry

All the players in the entire industry are making their back breaking efforts to compete strongly in the entire market as well as to attract customers towards the company. Thus, intensity of rivalry among the competitors is assessed to be high.....................

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