INTRODUCTION
Situation Synopsis OpenTable was launched by Chuck Templeton in 1999, as a restaurant reservation service provider. The company started to approach the best-known restaurants in each city first, in order to attract others to join. In addition to reservation service, OpenTable developed an integrated service, Electronic Reservations Book (ERB). OpenTable offerings to restaurant include training, customer support, mobile payments, security assistances as well as Guest Center. OpenTable had grown rapidly by 2008; however, its growth slowed significantly from 2008 to 2012. More seriously, after the long-time CEO Jeff Jordan stepped down, the stock price dropped by 67%. Nevertheless, there is one good news that the Priceline, a multiple booking services provider, announced that it would acquire OpenTable with a 46% premium over the market price. It is undoubted that OpenTable is standing at a crossroad. Company’s Current Strategy The core OpenTable business closely tracked the restaurant online booking system. It is using single business diversification strategy as its corporate-level strategy. In terms of business-level strategy, most of other offerings were refinements to complement the core business as a result of differentiation strategy on broad market. Problem Statement The differentiation strategy works out only when the OpenTable is able to produce differentiated features at competitive costs. Indeed, OpenTable’s clients are complaining that the service fees is too high. The declining growth has indicated that the current differentiation strategy could not maintain OpenTable’s growth in its core business in short run. The emerging problem is whether OpenTable should improve the current strategy or revise it into cost leadership strategy. EXTERNAL ANALYSIS