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OpenTable is an online restaurant-reservation service company founded by Chuck Templeton in 1998. It offers reservations at at more than 40K restaurants, mostly in the US and in several international cities. Restaurants that signed up with the service use the company's back-end software to process the reservations made on the website, resulting in a real-time reservation system for both diners and restaurants. OpenTable reports that it seats about 23 million diners per month. It rewards its diners' loyalty through a program that accumulates points for each reservation. Once a threshold is reached, these points can in turn be used in restaurants for future bookings.
OpenTable charges restaurants every time someone books a table using its system. For reservations made on OpenTable, the restaurant pays $1 for each diner. If reservations are made on the restaurant's website using OpenTable's widget, OpenTable charges 25 cents a diner. (Diners will not get points for reservations made on the website.) OpenTable also charges a $249 monthly subscription fee for its system.
-Describe OpenTable as a two-sided platform. List the sides of that platform. Explain the same-side and the cross-side network effects.
-You are consulting a start-up competitor to OpenTable. You are tasked to develop a strategy on how to effectively compete against OpenTable. Make a list of recommendations and discuss potential competitive outcomes.
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