Webvan Case Study 1
Webvan: Groceries on the Internet
E-commerce MGNT 671
February 22, 2000
Ben Neely
Brad Smith
Sharon Winemiller
Background and Problem Statement –
Webvan was started in 1996 by Louis Borders and was established to sell groceries over the World Wide Web. George Shaheen resigned as CEO of Anderson Consulting to take advantage of the opportunity to become CEO of Webvan. Webvan, which originated as an online grocery service, delivers food (including its BestYet label, a co-brand with food distributor Fleming Companies) and non-prescription drugs to their customers ' doors. Webvan’s vision was to provide grocery-shopping solutions that would save consumers both time and effort, without sacrificing the quality, selection, and low prices of traditional brick-and-mortar stores.
Operations from December 1996 through June 1999 were focused on the activities of raising capital, recruiting and training employees, developing their business strategy, designing a business system to implement their strategy, constructing and equipping their first distribution center and developing relationships with vendors. Although these activities have continued and still remain important, Webvan has changed its focus to building sales momentum, establishing additional vendor relationships, promoting their brand name, enhancing their distribution, delivery and customer service operations, and construction of additional distribution centers.
The company’s main operational problem is being able to maintain their goals of competitive pricing, time and effort saving, and providing good quality, while becoming operationally profitable.
Description of Industry including its growth, number of firms, and major players
Webvan’s business strategy positions the company within the home-shopping/retailing industry. The home-shopping industry for groceries has been around since 1990 with the industry originating with phone and catalog ordering. At the conception of the
E-commerce MGNT 671
February 22, 2000
Ben Neely
Brad Smith
Sharon Winemiller
Background and Problem Statement –
Webvan was started in 1996 by Louis Borders and was established to sell groceries over the World Wide Web. George Shaheen resigned as CEO of Anderson Consulting to take advantage of the opportunity to become CEO of Webvan. Webvan, which originated as an online grocery service, delivers food (including its BestYet label, a co-brand with food distributor Fleming Companies) and non-prescription drugs to their customers ' doors. Webvan’s vision was to provide grocery-shopping solutions that would save consumers both time and effort, without sacrificing the quality, selection, and low prices of traditional brick-and-mortar stores.
Operations from December 1996 through June 1999 were focused on the activities of raising capital, recruiting and training employees, developing their business strategy, designing a business system to implement their strategy, constructing and equipping their first distribution center and developing relationships with vendors. Although these activities have continued and still remain important, Webvan has changed its focus to building sales momentum, establishing additional vendor relationships, promoting their brand name, enhancing their distribution, delivery and customer service operations, and construction of additional distribution centers.
The company’s main operational problem is being able to maintain their goals of competitive pricing, time and effort saving, and providing good quality, while becoming operationally profitable.
Description of Industry including its growth, number of firms, and major players
Webvan’s business strategy positions the company within the home-shopping/retailing industry. The home-shopping industry for groceries has been around since 1990 with the industry originating with phone and catalog ordering. At the conception of the