expansion plan for eat2eat.com

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Issues and industry overview: Eat2Eat.com has started up for five years, built a good reputation in dining industries, and had a very stable technological operating system. The business model is sample but make sense that can generate a real cash flow from its operation income. However, it still has not reach its breakeven point for five years; therefore, a extra funding resource will be needed in 2006, and how to utilize this new financial support making a successful strategy for a long run business. Therefore, there are two main issues will be identified and examined as follow. One is for the financial alternatives, the other is the financial allocations. Alternative analysis First of all, from operating perspective and under time and financial constraints, Eat2Eat.com should evaluate which cities have potential to increase revenue sufficiently then close the business where we cannot see any significant improvement in the future. We can evaluate this factor by calculate the contribution margin from single consumer from different cities and the contribution margin from each city to see whether Eat2Eat.com has a right segment positioning towards this regional market. Second, to determine how much effort we should make to different cities, we evaluate this figure by the contribution margin from 2004 marketing campaigns, to see whether the marketing events have significant positive influence on membership growth. (appendix 3) Recommendation According to the case description, 7%-10% of consumers' bills constitute 40% of eat2eat.com revenue, which is US$478,000, therefore, once we close the operating insufficiently cities, then allocate the new funding to improve the performance where illustrate a highly acceptable behaviour for online restaurants reservation. It will be easily to reach breakeven point. For example, Bangkok is the lowest ranking of

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