Marketing Structure
Executive Summary
Webvan was founded by Louis Borders, the co-founder of the Borders bookstore in 1971. He envisioned an Internet business model that would provide consumers with a grocery shopping solution that saved time and effort without sacrificing the quality, selection or low prices that they had come to expect of traditional grocery stores. With this idea, Webvan came out. This company is certainly one of the most publicized ventures in e-business.
The current problems Webvan face are how to seize the big market opportunity of e-commerce market, how to increase the acceptance of online grocery shopping by customers, how to fulfill the challenge after generating 8 bn during IPO, and how to overcome the special problems online groceries face compare with traditional supermarkets.
This paper analysis the company in terms of situation, marketing strategy and finance plan.
For situation analysis, the result is positive. This industry has a huge potential, 55% of U.S. population will be online user by the end of 2003. And research found people think grocer the least like every day activities. Combine these trends together, online grocer seems reasonable. With a total market size of 2.7 bn, and average industry margin of 27%, the high profitability encourages new entrants to come. Among all the five forces affect a business, rivalry of competition is the most severe one. Peapod is the competitor that worth most attention of Webvan, because of its big similarity. The operation model of Webvan is one centralized distribution serves a big area with 10-12 station under the help of temperature control trucks and automated system of conveyers and carousels. It is also called two-truck, hub-and spoke system of distribution. The SWOT analysis of Webvan shows the biggest strength of Webvan is 30 minute window delivery while the weakness is the goal maybe too ambitious to achieve. The biggest opportunity is to seize the social trend of online service and the biggest
Webvan was founded by Louis Borders, the co-founder of the Borders bookstore in 1971. He envisioned an Internet business model that would provide consumers with a grocery shopping solution that saved time and effort without sacrificing the quality, selection or low prices that they had come to expect of traditional grocery stores. With this idea, Webvan came out. This company is certainly one of the most publicized ventures in e-business.
The current problems Webvan face are how to seize the big market opportunity of e-commerce market, how to increase the acceptance of online grocery shopping by customers, how to fulfill the challenge after generating 8 bn during IPO, and how to overcome the special problems online groceries face compare with traditional supermarkets.
This paper analysis the company in terms of situation, marketing strategy and finance plan.
For situation analysis, the result is positive. This industry has a huge potential, 55% of U.S. population will be online user by the end of 2003. And research found people think grocer the least like every day activities. Combine these trends together, online grocer seems reasonable. With a total market size of 2.7 bn, and average industry margin of 27%, the high profitability encourages new entrants to come. Among all the five forces affect a business, rivalry of competition is the most severe one. Peapod is the competitor that worth most attention of Webvan, because of its big similarity. The operation model of Webvan is one centralized distribution serves a big area with 10-12 station under the help of temperature control trucks and automated system of conveyers and carousels. It is also called two-truck, hub-and spoke system of distribution. The SWOT analysis of Webvan shows the biggest strength of Webvan is 30 minute window delivery while the weakness is the goal maybe too ambitious to achieve. The biggest opportunity is to seize the social trend of online service and the biggest