Essay on Grocery Checkout Case Analysis

2204 WordsApr 1, 20139 Pages
Case Overview and Key Issue Grocery Checkout Inc. (GCO), an online grocery delivery service was founded in 2005 by Nathan Felder and his fellow teammates at the University of Western Ontario (Western) as part of their business project. Recently, investors of GCO have been pressuring Felder continually for faster growth, and he has a number of growth approaches under consideration. As the co-founder and chief executive officer (CEO), Felder wanted to reflect on which option would be the best fit for GCO and how it might affect his role in the company. Company's Strategy CGO originally focused on convenient service, as it was founded on the idea to serve students without transportations. Felder believed that the business should also…show more content…
" Buyer Power: As GCO's products aren't any different from the products sold by other online sellers and local brick-and-mortar stores, it was unable to establish a brand images and to bound buyers to give up other substitutes for their proprietary products. Also, since the majority of buyers are only purchasing to the extent that to satisfy their household demand, their demands in volume are rather small and may be easily satisfied by any normal sized food retail competitors of GCO. These two factors together have provided the buyer a strong power in negotiation with GCO as well as many other food retailers. This fact is further strengthened by the fact that there is literally no switching costs in switching retailers as all the buyers would have to do is to go to another potentially more distant store and incur little additional gas expense. " Threat of Substitutes: This is most strongly affected by three factors, the switching costs to the buyer, the verity of substitutes and the necessity of the foods. In terms of the switching costs, the buyers' switching costs are generally very low, since they may choose to eat any other food to satisfy their hunger and the worst possible scenario is just they hated the taste. Moving to the verity of choices, since the primary objective of eating is to satisfy hunger, there are many other choices

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