Business Plan for Opentable - an Online Restaurant Reservation System

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BUSINESS PLAN FOR OPENTABLE
AN ONLINE RESTAURANT RESERVATION SYSTEM

PRESENTED TO: MICHAEL LANE

PREPARED BY: MUHAMMAD BILAL

STUDENT ID: 10268/0050092717

EMAIL: mbillall@yahoo.com

Date: 05th June 2010

Word count: 5009 excluding Executive Summary, References & Annotated Bibliography.

EXECUTIVE SUMMARY

Since 1999 OpenTable has been transforming the way restaurants manage their operations and diners make restaurant reservations, before OpenTable started all the restaurants were managing their operations and reservations via pen and paper book. This was not only cumbersome and inefficient, but it also prevented restaurants from making their table and inventory available online, the only way for diners to make a reservation was to pick up the phone and call around multiple restaurants but OpenTable introduced a new system which was a revolution in the restaurants industry

Open table did three things to address this opportunity

1. Created ERB (Electronic Reservation Book): As its name suggests this book was electronic which completely replaced the pen and the paper book from the restaurants. It also enabled restaurants to make their seating system computerised.

2. OpenTable assembled the network of restaurants through a specialise sales-force that sends this ERB directly into the fragmented restaurant industry

3. OpenTable attracted a network of diners to its consumers facing website by making a real-time seat inventory electronically available to consumers

The company strategy has two key underpinnings

1. Diners wants an easy online way to book restaurant reservation and

2. Restaurants want to use a system that gives them the access to most diners plus also help them in managing their day to day operations

OpenTable sees these two needs directly interrelated. The more restaurants OpenTable have, the more diners OpenTable attracts and the more diners OpenTable have, the more restaurants it attracts. It is this remarkable network to derive OpenTable powerful business model.

OpenTable is on this from the last 11 years and now count more than 11,000 restaurants around the world as partners and seat approximately 3 Million diners each month (Opentable website). This number is large but still OpenTable has a lot of room to grow, according to OpenTable conference 2009, OpenTable estimated that 30% of all restaurants reservation online diners in North America were all OpenTable current customers; however OpenTable’s penetration is much lower outside North America

The better reflection of opportunity is that OpenTable also estimated that just 6% of the all the reservations seated in north America are made online; this means that still the phone currently commands over the 94% of the reservation’s share, however it’s opentable’s believe that Just like the consumers have largely shifted online for making airlines and hotels reservations the diners will also continue to migrate online for restaurant reservations as more seat inventory comes online.

The company act both as B2B and B2C model and remain in between the customer and the consumer that is restaurant and the diners respectively, the company anlysis shows that it has a very strong business model and can work in most parts of the world and therefore has great potential to introduce their business globally.

Business plan for the growth is also discussed in details which concludes that the organization has a lot more strengths and opportunities then threats and weaknesses which makes them feasible to grow as fast as possible. Moreover the ROI suggests that the company will start its return within 3.5 years and will gain approximately 165% of profits from the fourth year, ROI for a customer has also been discussed which also shows a great benefit for restaurants to use OpenTable.

The implementation plan and the e-commerce initiatives concludes that the OpenTable should start its business on pilot...
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