Analysis of Chief Elements of Eat2Eat's Strategy - Case Study Example

Case Study of Eat2Eat 1. What grade would you give Vikram Aggarwal for the job he has done as CEO of Eat2Eat? Evaluate performance on the five tasks of strategic management discussed in Chapter? I would give Vikram Aggarwal 3 out of a scale of 5. This is because Aggarwal has been quite successful in making the company a recognizable one. He has been able to expand the business into different countries with a limited capital. Though he has a background of investment banking, he has been able to successfully run and expand an internet company. However, Aggarwal lacks suitable hindsight to develop a reasonable strategy for the company. This is the reason he is unable to achieve the maximum potential of the business. If we are to evaluate Aggarwal’s performance on the five tasks of strategic management, he would not be performing well. The five tasks of strategic management include: 1. Developing the mission and vision, 2. Developing objectives, 3. Developing Strategy, 4. Implementing Strategy and 5. Evaluating Performance and improving Strategy (Chenata, 18). Aggarwal rates low because Aggarwal has not been able to develop a feasible mission and vision statement for the company. Right now, he has no objectives for the firm which would have been developed keeping in mind the vision and mission of the company. Since there are no objectives in Agarwal’s mind, the company lacks strategic vision. When a company does not have a proper mission and vision, it risks its chances of going off-track. 2. Is Aggarwal’s present strategic vision for Eat2Eat different from the one he had when he originally founded it?  When Aggarwal first founded the company, he wanted to open up an internet chain that would work on the same track as that of online hotel and airline Ticket Company, just that the company would focus on restaurant bookings. Even though Aggarwal has not developed a mission and vision statement, the strategic vision has remained the same. While Aggarwal has expanded his reach to new countries and taken on promoting restaurants through website advertising, the company still earns a majority of its revenues through restaurant booking. 3. What are the chief elements of Eat2Eat’s business model? How does the company generate revenues? What are the primary cost drivers? How does it deliver value to customers?  The chief elements of Eat2Eat’s business model include an online service that is yet to have direct competition. The organization is able to generate revenues through three channels. These include its main revenue generating area which is online booking of restaurants; advertising for restaurants on the website; and credit card companies that build alliance with the company. The company has also been able to cover a wide geographical area in a relatively short time span. The primary cost drivers for the company include travelling expenses that the CEO incurs while contacting new partners. It also includes salaries paid to employees and maintaining the website. It delivers value to its customers by providing a myriad of restaurant choices to book from and also by giving reviews about these restaurants that are written by the CEO himself and are objective in nature. 4. What are the chief elements of Eat2Eat s strategy? Which of the five generic strategies discussed in Chapter 5 is Eat2Eat pursuing? Has Eat2Eat s strategy evolved since it was originally conceived?  Strategies adopted by organizations all over the world have been generally categorized into five generic strategies. These include best cost provider strategy, focused low-cost strategy, focused differentiation strategy, broad differentiation strategy and low cost provider strategy (Thompson, Strickland, Gamble and Jain, 138). Eat2Eat has adopted the broad differentiation strategy. Under this strategy, the company focuses on restaurant online booking. This company is different from any other company as it offers a unique service to its customers. Even though competition has entered in the market by bringing in the same products but they still to work on a regional level. However, the company caters to all kinds of customers including both corporate and individuals. The target market for the company is all people who use the internet as a buying medium. 5. How well is Eat2Eat’s strategy working? What evidence is there to indicate that the strategy is producing its intended results? Eat2Eat’s strategy is not working quite well. This is because the company has been unable to generate profits to maintain or even expand the business. The company seems to be operating before its time and consumers have not caught on to booking restaurants over the internet. Since the CEO, Aggarwal has not developed the vision and mission statement, this seems not quite surprising. 6. Has Eat2Eat s strategy given it a sustainable competitive advantage? If so, what is the basis for whatever competitive advantage it has? If not, why?  Would it be possible to build a sustainable competitive advantage in this industry? If so, how?  Eat2Eat’s strategy is to cater to companies and individuals aiming to book restaurants over the internet. This strategy has allowed the company to gain competitive advantage since at this point of time this market has not been touched. There had been no competition existing when the company entered the market. Thus, allows the company a good competitive advantage since it would develop a strong brand identity by the time competition catches up. Even though there are restaurants booking over the internet, they do not have the same advanced technology as Eat2Eat and they are limited to providing booking of one restaurant whereas Eat2Eat allows users to choose from a myriad of options. It would be quite difficult to build a competitive advantage in this industry since Eat2Eat acts as a middle man between consumers and restaurants. This could easily be achieved by other companies with substantial backing and good relations with first tier restaurants. 7. What factors do you see as critical to competitive success in the online restaurant booking industry?  In this particular industry, factors critical to competitive success includes a wide reach to different geographical regions. Since competition is likely to increase as internet access increases, it is critical for any organization within this industry to reach out to as many first tier restaurants as it can. Users want to access as many restaurants as they can. Also the company would have to expand its reach. It should focus on becoming the industry leader before competition within the industry increases. This could only be done if the company focuses on improving its identity through more affiliations with first-tier restaurants and added exposure to potential consumers through programs such as Eat! 8. What are Eat2Eat s greatest strengths? What are its competitive liabilities? What are the most significant opportunities that Aggarwal should be aware of? What are the greatest threats facing Eat2Eat? Do a SWOT analysis to support your answer. Strengths: The biggest strength for Eat2Eat is its unmatched service. It has no direct competition right now. Also the company has expanded to different geographical regions in a short time span. The company is further taking advantage of generating revenues from different sources including but not limited to advertising. Weaknesses: The limitation for Eat2Eat is its limited capital. Limited capital prevents the company from hiring new people who would potentially improve the position of the company. The company at this point of time does not have a travelling sales representative who would tour different regions to understand potential revenue generating areas. Another weakness of the company is its ill-defined vision and mission statement that does not translate into a good strategy that the company might adopt. Opportunities: Probably the biggest opportunity for Eat2Eat is its potential to develop itself as a market leader. It has right now a strong reach and is a pioneer in the online restaurant booking industry. The company is well ahead of its time and this may be a weaknesses for the company right now but can be developed into an opportunity with the right amount of resources. Threats: The Company faces its biggest threat from lack of capital. The company cannot add the needed employees since it does not have the capital to pay the employees. Also the company faces issues of language barriers from its consumers who may not understand English and thus have no use for the website. 9. What role have strategic alliances played in Eat2Eat s success? What types of partners are most valuable to Eat2Eat? Which partners does Eat2Eat have the greatest potential to benefit? Which partnerships should Eat2Eat focus on forming in the immediate future?  Strategic alliances have played a great role in Eat2Eat’s success. This is because the company has been able to benefit through this alliance by retaining and attracting customers through discounts and special offers. It is because of the alliance with first tier restaurants that Eat2Eat has been able to provide a timely and efficient service to its customers. Eat2Eat’s most valuable partners would be hotel chains. This is because hotel chains receive a good amount of customers who visit the country either for business purposes or recreational purposes. For both the purposes, these customers have no idea about the good restaurants operating in the area and they often ask for recommendations. If Eat2Eat develops alliance with such hotel chains, they would direct their customers to the website and thus benefit Eat2Eat with added revenues. 10. What recommendations would you make to Vikram Aggarwal? What should the key elements of the company s strategic plan be for the next 3 years? Vikram Aggarwal should focus more on countries that are showing good profits. Since he has limited capital at this point of time, it would only be feasible to cash on the profitable companies. This would include Hong Kong and Tokyo with their highest revenues. Also these countries have caught on to booking over the internet and thus are very profitable. Also right now Aggarwal is facing a language barrier in countries where English is not understood. These regions include Bangkong, HongKong, Shanghai, and Seoul. If Aggarwal was to introduce website interface in different languages, it would allow him added penetration into the market. Since the company is expanding at a rapid pace, it needs to add on the required people to conduct the business in an efficient manner. Aggarwal is facing a dire shortage of key personnel and for this he should hire new employees, specifically sales representatives who would add more alliances for the company. 11. If you were a venture capitalist, would you invest in Eat2Eat? Why or why not? If I were a venture capitalist, I would be willing to invest in Eat2Eat. This is because the company has great potential. It has been able to tap a market that has remained undiscovered till now. Also it has been able to develop a wide reach into various countries. Even though, it is faces issues of subscriptions, the company has been able to generate revenues through different channels including but not limited to advertising on the website. The company, at this point of time, is ahead of its time and by the time other competitors enter into the market; the company would have been able to develop a strong brand identity. The company has also developed affiliations with a wide range of first tier restaurants. References Chaneta, D. I. Strategic Management Process, Journal of Comprehensive Research, Volume 5, Page 17-2, 2007, Print Thompson, Arthur, Strickland, A, J, Gamble, John, and Jain, Arun, Crafting And Executing Strategy, 14 Edition, New York: Tata McGraw-Hill Education, 2007 Read More