Yelp was founded in 2004 as a platform that would provide people with local business. The idea was to connect the app with all kinds of local business so that the users are able to locate the services that they are looking for, around them. It has over 30 million monthly visitors now. Yelp creates a platform where business can advertise their business and reach out to their customers and eventually gain profits from them, while helping the app itself. However, it helps the customers view the rating and reviews of a certain business and then choose the kind of business they would like to buy. Yelp sells ads to the business and gains revenue through that by creating a win-win situation.
Their competitive advantage is the kind of innovation that they add to their app consistently. Yelp works on developing their research and development department which helps them bring innovation their services in order to improve the overall experience for the customers and to sustain these loyal customers in the long run. For instance, the users can not only view the local businesses through Yelp, but can also reach out to these businesses with their queries and then also buy or book their businesses online. These features help save time of the users as they are able to complete all their tasks through one app instead of switching to various apps. By providing such convenience to the users, Yelp gains its competitive advantage.
Yelp has a very intelligent and well though model as they did not have to reach out to their potential businesses; rather they were able to offer them incentives. Just because the businesses could see their own advantage in advertising and reaching out to the customers through Yelp, it benefited them in various ways. Especially today, when after many years of operations Yelp has achieved and maintained a consistent customer base, the businesses consider Yelp as an opportunity for them to increase their sales. It is also evident from past reports that businesses noticed an increase in revenue after advertising through Yelp.
Yelp has also invested in partnering with apps like Google Maps which further help them increase their user base. By doing so, Yelp is able to reach out to even more customers because when people use Google to look for a certain business, it also directs them to businesses that are featured on Yelp, thereby driving the online traffic towards Yelp and eventually increasing their customers as well as profits.
Yelp is known as number one business directory because they are able to provide convenience to the technologically enhanced customers of today and they started providing the users with something that no one else through of. Despite a lot competition in the industry today, Yelp is still maintaining its position through its own competitive advantages.
References
About Us. Retrieved February 7, 2018, from https://www.yelp.com/about
Google Making Maps App More Competitive With Yelp. (2014, August 11). Retrieved February 7, 2018, from https://searchengineland.com/google-makes-map-app-competitive-yelp-196605
Luis V. Sanchez, CFA Hedge fund manager, long/short equity, special situationsAnaxi Capital Management.cls-1{fill:#024999;}. (2016, July 4). Buy Yelp: The Network Effect Is Strong (80% Upside). Retrieved February 7, 2018, from https://seekingalpha.com/article/3983055-buy-yelp-network-effect-strong-80-percent-upside
Yelp: a 5-star review. Retrieved February 7, 2018, from https://rctom.hbs.org/submission/yelp-a-5-star-review/