Quality Function Deployment and Swot Analysis
Table of Contents
Executive Summary 2
Case Analysis Overview 2
Environmental Background 3
SWOT Analysis: Strengths 3
SWOT Analysis: Weaknesses 3
SWOT Analysis: Opportunities 4
SWOT Analysis: Threats 4
Problems: Flawed Capacity Strategy 5
Problems: Lack of QFD 5
Problems: Management Focused on the "Home Run" 5
Potential Alternative Scenario I: Increase Product Variety 5
Lessons Learned/Conclusion 7
Appendix: Figure 1 Growth of Web Purchases & Online Grocery Purchases 8
Appendix: Figure 2 -- Webvan vs. Brick & Mortar Grocery, Order Size & Frequency 9
Appendix: Figure 3 Avg Daily Unit Break-Even Analysis 10
Appendix: Figure 4 Adding Capacity 10
Appendix: Figure 5 Quality Functional Deployment: House of Quality 11
Appendix: Figure 6 Potential Changes to Delivery Routes 12
Appendix: Figure 7 -- Marketing-Operations Coordination Model 13 Executive Summary Webvan was a short-lived Internet grocer that unsuccessfully entered the grocery industry in the late 1990s. The company focused its core capability/strength on highly-automated, capital-intensive and operating systems. However, Webvan showed weakness in its lack of focus on actual customer requirements and needs from a Quality Function Deployment (QFD) point-of-view. Despite typically low profit margins in the industry, the overall size of the industry, the rise in Internet usage and growth online grocery sales were predicted to be ripe opportunities. Uncertain demand was the company's main threat. Inflexible demand requirements, lack of QFD, and poorly structured management incentives proved to be problems for Webvan. It is recommended that Webvan would have benefited by implementing a QFD strategy and through more flexible, and a less capital-intensive approach. QFD would have allowed the company to base its services on actual customer requirements rather than assumptions. Flexible operations would afford the company the ability to grow with actual demand rather than
Executive Summary 2
Case Analysis Overview 2
Environmental Background 3
SWOT Analysis: Strengths 3
SWOT Analysis: Weaknesses 3
SWOT Analysis: Opportunities 4
SWOT Analysis: Threats 4
Problems: Flawed Capacity Strategy 5
Problems: Lack of QFD 5
Problems: Management Focused on the "Home Run" 5
Potential Alternative Scenario I: Increase Product Variety 5
Lessons Learned/Conclusion 7
Appendix: Figure 1 Growth of Web Purchases & Online Grocery Purchases 8
Appendix: Figure 2 -- Webvan vs. Brick & Mortar Grocery, Order Size & Frequency 9
Appendix: Figure 3 Avg Daily Unit Break-Even Analysis 10
Appendix: Figure 4 Adding Capacity 10
Appendix: Figure 5 Quality Functional Deployment: House of Quality 11
Appendix: Figure 6 Potential Changes to Delivery Routes 12
Appendix: Figure 7 -- Marketing-Operations Coordination Model 13 Executive Summary Webvan was a short-lived Internet grocer that unsuccessfully entered the grocery industry in the late 1990s. The company focused its core capability/strength on highly-automated, capital-intensive and operating systems. However, Webvan showed weakness in its lack of focus on actual customer requirements and needs from a Quality Function Deployment (QFD) point-of-view. Despite typically low profit margins in the industry, the overall size of the industry, the rise in Internet usage and growth online grocery sales were predicted to be ripe opportunities. Uncertain demand was the company's main threat. Inflexible demand requirements, lack of QFD, and poorly structured management incentives proved to be problems for Webvan. It is recommended that Webvan would have benefited by implementing a QFD strategy and through more flexible, and a less capital-intensive approach. QFD would have allowed the company to base its services on actual customer requirements rather than assumptions. Flexible operations would afford the company the ability to grow with actual demand rather than