1. The document discusses OpenTable, the leading online restaurant reservation platform, and analyzes its external environment, internal strengths, and competitive position. 2. It recommends that OpenTable create a positive same-side network effect on the diner side by introducing new payment and social features like bill splitting to foster a community of repeat diners. 3. This would help defend against threats from other reservation platforms and one-way reservation sites by increasing diner loyalty and engagement with OpenTable.

1. Agenda
1. Introduction to OpenTable
2. Value Proposition of Online Restaurant Reservation
3. External Analysis
4. Internal Analysis
5. Recommendation

2. First-mover in Restaurant Reservation Industry (RRI)
Launched 1999 in San Francisco and Chicago
Invented Electronic Reservation Book
Leader in the US with roughly 32,000 restaurants &
158 million customers seated (2013)
Revenue Model
Subscription fees ($244 average)
Reservation fee per customer seated ($0.25-$7.50)

3. Restaurant Reservation Value Proposition
Perishable inventory – an empty table is a lost opportunity
Customer accessibility – reduce reservation friction
Customer loyalty – know and reward their customers
Business & marketing acumen – restauranteurs love food, not business

4. The Restaurant Reservation Industry
Platforms
OpenTable, Yelp,
La Fourchette
One-Way Reservation
uReserv, Eveve,
rGuest
Two very
different
models.

5. Restaurant Reservation Platforms
Diners:
Restaurant Search
Review
Reservation
Changes
Cancellation
--
Restaurants:
Real-time Reservations
Table Management
Marketing
Diners
Restaurants
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6. Attractiveness of the RRI
PROS
 No clear global leader
 Low barriers to entry in underserved
areas
 Tendency towards convenience &
technology
 53% US of diners never made
reservation online
CONS
 Complexity of the industry
 Growing competition
 Threat of envelopment is high
 Dominance of large platforms due to
strong cross-side network effects
Medium Level of Attractiveness

7. OpenTable
Full ERB, Connect, Guest
Center
Restaurants
Restaurant’s Own Website
Other Platforms
Yelp, LaFourchette
OpenTable
Diner sourcing to OpenTable
Diner sourcing to competitor ERBs
Diners
Platforms
One-Way
ERBs
Other Platform ERBs
Yelp, LaFourchette
One-Way Reservation
uReserv, Eveve, rGuest
Where OpenTable Competes

8. First-Mover Advantage
Strong Cross-Side Network Effects

9. Competitive Advantage
RESOURCES
 IT Expertise
 Financial
 Partnerships
 Marketing expertise
CAPABILITIES
 Software development
 Acquisition management
 Toptable – UK market
 Cholo – mobile payment
 Relationship-building
 Yelp & Facebook
 Brand management
 Marketing capabilities
First-Mover Advantage

10. Is this Competitive Advantage Sustainable?
Threat from Platforms Threat from One-Way ERBs
 Dent in the partnership
model
 Strong cross-side network
effects
 Ability to exert diner pull
 Promote change in diner
behaviour
 No marketing
responsibility
LOWER PRICES

11. Recommendation
Create Positive Same-Side Network Effect On Its Subsidy (Diner) Side

12. OpenTable Payments
Better positioned compared to competitors (PayPal, Cover, MyCheck)
Seamless Integration between ERB, POS, Mobile App
Skip verification step (time-savings)

13. OpenTable Payments: Roll Out
Integration with more POS systems
Lowering subscription fees to match competitors
ERB IS CENTRAL FOR SUCCESS OF MOBILE PAYMENTS

14. How Does It Create Positive Same-Side Effects?
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15. Bill-Splitting Function!
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16. First-Step Toward a Community of Diners!
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