[MBA] Case Study: To Pay or Not to Pay: Zagat's Dilemma
1. Evaluate Zagat using the competitive forces and value chain models.
2. Compare Zagat's and Yelp's e-commerce business models. How have those models affected each company's Web strategy?
3. Why was Zagat's content will suited for the Web and for the mobile digital platform?
4. Do you think Zagat's decision to use a pay wall for its Web site was a mistake? Why or why not?
5. Will Zagat's acquisition by Google make it more competitive? Explain your answer.
Here Zagat publishes restaurant guide with help of customers reviews. They initially published books and became the bestseller but when they emerged on web; interested customers got easier access to it but Zagat urged visitor spend few bucks for it.
- When they were publishing books they had more competitors. Yelp emerged on the market online. Yelp the free service provider is substituted for Zagat in online world.
- In case of collecting visitors and review making customers, Zagat laged to some extend on optimizing the online portal.
- Regarding value chain analysis, the review for Zagad is some hundred peoples but Yelp has been able to collect data from thousands of customers.
- Zagat laged on search engine because search bots cannot crawl inside paywall.
Zagat e-commerce model is membership type where only authorized customers can make review. This model limited the range of customers eligible for making reivew.
Yelp used wiki type model where anyone can make entries and modifications, Yelp personnels performs required moderations.
Zagat provided high end customers whose reviews are suitable for including on hard copy books. The entries on Zagat are genuine and quality one but it had less accessibility for quick access. Zagat's articles were included on books and sold, the content published online can be seen after payment only. The content provided are more professionally researched.
Yelp site is Wiki inspired where anyone can make review and edit. It have less professionally researched. The buyer and seller are free to write entire essay on the site so that they can better describe the products.
Zagat content are professionally prepared and genuine. They are better suited for Web and mobile digital platform because
- Content are organized on cities hub and enlists top restaurants of certain type
- Few precisely describing content are streamlined on web
- Professionally created content are more quality and weighty than random reviewers jumbles
- Initially few details are displayed to briefly describe the restaurant, if user wish spend time then scrolling will provide more details.
Yes, I think the decision of Zagat to keep their content inside paywall is mistake that caused Zagat possibly sweeping out of online market. People surfing web have number of alternatives when they search for some contents. If some sites keeps the content inside paywall customers are distracted and they search for some free ones. People when surf the web the main portable they go is Google. Google cannot list items inside of paywall so, reviews and contents of Zagat is beyond scope of Google bots. Moreover Zagat is not the
creator of content it lists reviews voluntarily provided by customers then Zagat's attempts to make money vain is logically infeasible.
Zagat's acquisition will two fold benefits, on Zagat and Google both side.
- Zagat had user generated content that best matched requirement of Google Places. Zagat content were not accessible for Google search but acquisition facilitated the access.
- Zagat's review collection books kept generating reviews from book selling too, it will be profitable for Google too.
- Reviews from customers are then very useful for Google entrance on reviews collection maket about different place and institutions.
- We can conclude the acquisition is win/win situation that uplifted Google's internet market dominance and saved Zagat future sinking in lack of visitors.