Case# 2

On

YELP! : HOW A WILLINGNESS TO LET ITS BUSINESS PLAN QUICKLY EVOLVE

HELPED A START-UP GET IT’S OFFERING RIGHT

MGT401 Entrepreneurship

Prepared for

Habib A Islam

Faculty

College of Business Administration (CBA)

IUBAT

Prepared by

Shahriar Rawshon

ID# 09102095

Section: A

Program: BBA

IUBAT—International University of Business Agriculture and Technology

Date of Submission: 27th May, 2012

CASE 4.2: Yelp! : How a Willingness to Let Its Business Plan Quickly Evolve Helped a Start-Up Get Its Offering Right

CASE 4.2: Yelp! : How a Willingness to Let Its Business Plan Quickly Evolve Helped a Start-Up Get

Its Offering Right

Company Profile:

Yelp offers user-generated reviews and information on local businesses and service providers through its website at Yelp.com, and via its mobile app. Its content targets younger, urban consumers and covers restaurants, bars, salons, retailers, doctors, and museums. The site has a social media-friendly interface -- users can create and maintain profiles (complete with friend networks and photos), where they can blog on experiences with businesses. Yelp has established a foothold in cities across the US, Canada, and Europe. The firm was founded in 2004 by former PayPal engineers Jeremy Stoppelman and Russel Simmons. It went public in 2012.

Type PrivateIndustry Business rating and reviewfounded October 2004Headquarter San Francisco, CA, USARevenue US $30 Million (2009)Employees 150+

Our purpose :

To connect people with great local businesses

General information about Yelp

Yelp was founded in 2004 to help people find great local businesses like dentists, hair stylists and mechanics

Yelp had an average of approximately 71 million monthly unique visitors in Q1 2012 Yelpers have written over 27 million local reviews In addition to reviews, you can use Yelp to find events, lists and to talk with other

Yelpers Every business owner (or manager) can setup a free account to post photos and message

her customers Yelp makes money by selling ads to local businesses - you'll see these clearly labeled

"Yelp Ads" around the site Paying advertisers can never change or re-order their reviews

CASE 4.2: Yelp! : How a Willingness to Let Its Business Plan Quickly Evolve Helped a Start-Up Get Its Offering Right

Yelp has an automated filter that suppresses a small portion of reviews - it targets those suspicious ones you see on other sites

You can access Yelp via iPhone, Android, BlackBerry, and more - see the full list of mobile apps here.

The Weekly Yelp brings locals updates on the latest and greatest business openings & other happenings.

Yelp Management Team:

Jeremy Stoppelman, Co-founder and Chief Executive Officer

Geoff Donaker,Chief Operating Officer

Rob Krolik, Chief Financial Officer

Dylan Swift,Head of Human Resources

Senior Vice President

Jed Nachman, Senior Vice President of Revenue

Vice President

Erica Galos Alioto, Vice President, Local Sales, Phoenix

Andrea Rubin, Vice President, North American Marketing

Michael Stoppelman, Vice President, Engineering

Miriam Warren, Vice President, New Markets

Sonia Survanshi McFarland, Vice President, User Operations

Vince Sollitto. Vice President, Corporate Communications

Laurence Wilson, General Counsel

CASE 4.2: Yelp! : How a Willingness to Let Its Business Plan Quickly Evolve Helped a Start-Up Get Its Offering Right

SWOT Analysis of Yelp:

Strengths:

Quick Search services with doctor, restaurant, dentist etc A review and comment sector for new venture Have a opportunity to see services available in local area

Weaknesses:

City based manager is not available Previously The Manpower is not enough Low review recommendation Some store have not efficiency of warehouse Management

Opportunities:

New in Market More customers are women Customer can take information city basis

Threats:

Language barriers Legal barriers Junk mail Wrong information with recommendation

PEST Analysis of Yelp

PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the scanning component of strategic management. For Yelp the PEST analysis is given bellow:

P olitical:

The environment is politically sound for Yelp:

Trade restrictions: There is no influence restriction for this business Political stability: Politics is stable in USA

E conomic:

Economically there is not any obstacle to setup this type of shop.

CASE 4.2: Yelp! : How a Willingness to Let Its Business Plan Quickly Evolve Helped a Start-Up Get Its Offering Right

Economic growth:o Economically save time and money and create demand in market.

o Identifying the right business information in local area

S ocial:

Support Center

o Create a Yelp Deal

o Turn Yelp visitors into paying customers. Create a Deal in minutes. When

Yelp users buy your Deal, you get paid.o Message Your Customers

o You have a voice, so join the conversation regarding a business; reply to

reviews either publicly or privately.o View Business Trends

o What's word-of-mouth doing for you? Stats and charts measure the

performance of a business page on Yelp.

By survey the company gets the information that the people are interested to have that type of online shop

Age distribution: Most of the customer are women entrepreneur and age between 22-46

T echnological:

R&D activity: Thee are primary and secondary research is used Automation:

o Online Advertising – low cost, localized and highly relevant.

Advertising Opportunities for Any Size Business Local business owner National or regional business National Brand or add agency

Technology incentives:o Develop or upgrade website to improve the useable way to search information.

o Develop an affiliate marketing program to expand your prospect base -

exponentially. Yelp Mobile The Weekly Yelp Yelp Apparel RSS Top Searches

CASE 4.2: Yelp! : How a Willingness to Let Its Business Plan Quickly Evolve Helped a Start-Up Get Its Offering Right

The rate of technological change:o Previously the website is not well designed so they change their design according

to customer demand

Porters Five Forces Model

1. Threat of new competition: If there are new competitors there is a threat for Yelp. They serve only some selected area they should expand their business

2. Threat of substitute products or services: Substitute product are now in market like google search so it will be threat.

3. Bargaining power of customers (buyers): Here the demand of customer is more than organization because they redesigned their website according to customer need and make a search zone by the area based. They also introduced customer account.

4. Bargaining power of suppliers: Here there are top most Mall have a bargaining power that they may or may not be interested with Yelp concept

5. Intensity of competitive rivalry: Its has strong industry competitive power to compare.

Feasibility analysis:

Feasibility Analysis: The feasibility analysis of Yelp is given below:

Part 1: Product Analysis

A. Product/ service desirabilitya. Doctorb. Coffee shopc. Dentistd. Restaurant

B. Product/ service demanda. Barberb. Expand the business other areac. Beauty and Spa

Part 2: Market Analysis:

A. Industry attractivenessa. Local Businessb. Small Businessc. Regional Businessd. Service industries

B. Target Market Attractivenessa. Countries

CASE 4.2: Yelp! : How a Willingness to Let Its Business Plan Quickly Evolve Helped a Start-Up Get Its Offering Right

Australia, Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy, Norway, Spain, Sweden, Switzerland, The Netherlands, United Kingdom

Part 3: Entrepreneurs Analysis:

A. Management Prowessa. Communicate with your customers-- privately and publiclyb. Track how many people view your business pagec. Add photos, a detailed business description, up-to-date information, history, and

specialtiesd. Recommend other businesses

B. Resource sufficiency a. Over 71 million people visited Yelp in Q1 2012 to make spending decisions. b. To help businesses get the most out of their online presence, c. Yelp Business Accounts offer a suite of FREE tools for businesses.

Part 4: Financial Situation Analysis:

A. Total Start up cash NeededB. Financial Performance of similar businessC. Overall Financial Attractiveness of the proposed venture

Discussion Question:

QUESTION #1: Go to yelp’S Website and look up one of your favorite restatements. What you think? Do you think the company has an attractive enough offering that it will continue to increase its number of user? Will you use the service again why or Why not?

Answer:

Yelp’s Website and look up one of my favorite restatements

Pie Tisserie

o Categories: Desserts, Food Stands

o San Francisco, CA 94107

o (415) 999-1446

o http://pietisserie.com

o Price Range: $$ 

o Takes Reservations: No

o Delivery: Yes

CASE 4.2: Yelp! : How a Willingness to Let Its Business Plan Quickly Evolve Helped a Start-Up Get Its Offering Right

o Take-out: Yes

o Waiter Service: No

o Outdoor Seating: No

o Wi-Fi: Paid

o Good For: Dessert

o Alcohol: No

o Noise Level: Average

o Has TV: No

o Caters: Yes

o Wheelchair Accessible: Yes

Also automatically Yelp is able to detect visitor location according to IP address

Yelp places search result in a map by using google map so it is easy for finding restaurant.

o Unfortunately location and business using that Yelp have, now only for place in

US, Canada, and some countries in Europeo Use for Yelp seems like some of cussed on business field so that it is not used for

general use yet like facebook, MySpace, Twitter

QUESTION #2: What are the most important assumption that yelp’s initial business plan? How about it business service plan? Compare and contrast the two.

Answer:

Assumption of initial plan

No one had created a web site to help people that are looking for only services geographic areaRequest and recommendation provide by mail

Assumption of irevised business

plan

New plan dropped the mail and focused on providing a productively write review of local businessThe website itself was also redesigned

CASE 4.2: Yelp! : How a Willingness to Let Its Business Plan Quickly Evolve Helped a Start-Up Get Its Offering Right

QUESTION #3: What changes to yelp did the company’s founders make to effectively implement their revised business plan? Were the change obvious or did it take careful observation on the founder’s part to know what change to make?

Answer:

Based on people opinion and comparing with other site like Craigslist and City search they decided to change Yelp

QUESTION #4: What do you think would have happened to yield after it revised its business plan if it had decided to go nationwide all at once?

Answer:

Yelp strategy for entering new cities

FirstThe founderds decided not to pay for reviewers and let people share their experience

SecondFollowing the craigslist model and build Yelp city by city

ThirdAdd credibility to their site with the idea of requestiong reviewrs to profiles

1. Hired Scouts who were paid to seed the site with contentWrite previews and sprade the world

2. Community managers were also hired to build a community of loyal user

3. Yelp will add a new city to Yelp list when there are enough requests from users to add their particulars city

4. Call businesses for adverising