Quality Function Deployment and Swot Analysis Essay

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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
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Webvan had minimal power against large distributors like P&G and had no private label presence to offset this disadvantage. Webvan's non-traditional operating model was also an issue. The use of non-standard pallet configurations was an example of how large suppliers made accommodations for a smaller reseller. It is assumed that Webvan's supplier relations were complicated by its non-standard shipping requirements, and the sheer number of vendors the company worked with. Finally, Webvan's systems, though highly automated, were extremely expensive, overly-customized (and thus hard to upgrade) and insufficiently funded to support expansion into new markets.
SWOT Analysis: Opportunities
First, the $650B size of the US grocery market was a major opportunity; only a small percentage of this market would be required for a company to have significant profits. Second, both web-purchases and, in particular, online grocery consumer purchases were predicted to increase. The $16.8B in online grocery sales was predicted to represent 1 out of every 5 dollars spent online by 2004 (see figure 1). Third, customer data opportunities were emerging through all online retailers. Webvan's ability to leverage customer purchasing information and its ability to share this data with its suppliers constituted an advantage over traditional grocery competitors. Finally, capital markets in the late 1990s were eagerly funding start up companies.
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