Agenda

1. Introduction to OpenTable

2. Value Proposition of Online Restaurant Reservation

3. External Analysis

4. Internal Analysis

5. Recommendation

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)

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

The Restaurant Reservation Industry

PlatformsOpenTable, Yelp,

La Fourchette

One-Way ReservationuReserv, Eveve,

rGuest

Two very different models.

Restaurant Reservation Platforms

Diners:Restaurant Search

ReviewReservation

ChangesCancellation

--Restaurants:

Real-time ReservationsTable Management

Marketing

DinersRestaurants

$$

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

OpenTableFull ERB, Connect, Guest

Center

Restaurants

Restaurant’s Own WebsiteOther Platforms

Yelp, LaFourchetteOpenTable

Diner sourcing to OpenTable

Diner sourcing to competitor ERBs

Diners

PlatformsOne-Way

ERBs

Other Platform ERBsYelp, LaFourchette

One-Way ReservationuReserv, Eveve, rGuest

Where OpenTable Competes

First-Mover Advantage

Strong Cross-Side Network Effects

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

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

Recommendation

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

OpenTable PaymentsBetter positioned compared to competitors (PayPal, Cover, MyCheck)

Seamless Integration between ERB, POS, Mobile App

Skip verification step (time-savings)

OpenTable Payments: Roll OutIntegration with more POS systems

Lowering subscription fees to match competitors

ERB IS CENTRAL FOR SUCCESS OF MOBILE PAYMENTS

How Does It Create Positive Same-Side Effects?

Popoff

LaBargeHussein

Nelson

$$

$$

$$

Bill-Splitting Function!

PopoffLaBarge

Hussein

Nelson

First-Step Toward a Community of Diners!

PopoffLaBarge

HusseinNelson