Webvan Q1. Describe the Webvan business model and then analyze it using the value chain and competitive forces models. What were the assumptions that drove this business model? Ans: Webvan’s Business Model used the following Points: 1. Revenue in relation to capital investment and margins. 2. Margins in the US grocery business. 3. Obtaining customers at affordable cost. 4. Gross margins compared with cost structure Analysis: 1. According to Webvan huge upfront investment was to be considered Adequate of all other things unlike the perspective of value chain and competitive forces model. 2. Webvan considered Publicity means everyone would know about Webvan but had it emphasized on customer acquisition and cost retention more then it could …show more content…
4. When an unplanned delay occurred, dispatchers called to inform customers who could choose either to accept a late delivery or to reschedule it. 5. The drivers also used the GPS to plot alternate routes to circumvent traffic problems, thereby more easily meeting their schedules. 6. At the home, the driver carried the totes inside and unpacked them. 7. The driver then used a handheld wireless device to print out a receipt and an itemized order list. 8. The device also notified dispatch that the delivery was completed. Role of technology in Ordering Suppliers. 1. Webvan also developed a system of ordering products from its suppliers. 2. Webvan determined what to order based on both actual and expected demand. 3. If an item was not in the warehouse at the time a customer ordered it, Webvan used a rapid and reliable communication Web site (harbinger.net) to automatically inform suppliers. 4. Harbinger software formatted orders for all suppliers and forwarded the orders to them. 5. When goods arrived at a warehouse, receiving opened the cartons and scanned the products. 6. Shelf items were put into trays, and the system used a very complex ―round- robin‖ algorithm to assign each tray to a specific carousel. 7. However, like many of its supermarket rivals, Webvan did little else to automate its supply chain because it was too small to force its suppliers to invest in supply chain technology. Q3.
The ordering process begins with the decision of the customer to submit their order simply by either calling, faxing or mailing their order information. When a customer calls in their order, the customer service representatives takes down pertinent customer information, which includes the customer's name, billing and shipping address, product number and description, quantity and shipping instructions. While taking down the order, the customer service representative access the company's order entry system where inventory checks are conducted as well as credit checks are processed. In addition, delivery options are advised to the customer. Here the customer decides
1. The grocery industry is a commoditized industry, which makes it difficult for grocers to sustain through differentiation. Buyer power is high and thus, cost leadership and operational efficiencies are critical. There is fierce competition amongst various grocery stores, with the main players such as Loblaw and A&P holding multi-banner stores in various market segments. Traditional grocery stores also lose some of their market share to drug stores, convenience stores and other retailers who have entered the industry. Threat of substitutes from fast-food and take- away outlets is not as prevalent, since many grocery stores have started stocking ready-to-eat meals and have deli services available for consumers. Competitive
Operating on very thin profit margins, players in the supermarket industry traditionally either focus on a premium segment or follow a discounter strategy at the low end. Premium players address educated and more price elastic consumers who value healthy, natural and organic food; the share of perishable items for these players is normally distinctly higher. Players that focus on a discounter strategy offer a higher share of simple necessity items and value price competitiveness over premium features like healthiness or organic origin. Independently of the focused customer group it is imperative for players in the supermarket industry to be cost efficient and optimize operations
III. If the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the vendor.
* Technical solutions of webspective is not up to the mark and many of the potential customers perceive webspective to be crippled with problems such as inefficient traffic handling,brand name inconsistency and network problems.
All goods purchased pass through a receiving department under the direction of the chief purchasing agent. The duties of the receiving department are to unpack, count, and inspect the goods. The quantity received is compared with the quantity shown on the receiving department’s copy of the purchase order. If there is no discrepancy, the purchase order is stamped “OK—Receiving Dept.” and forwarded to the accounts payable section of the accounting
Cons: A total $10 million investment was required to cover $2 million for the land and $5 million loan financed at 5% annually.
We recommend investing in the Web-Based Customer Portal. The expected high financial rewards with net present value of $346K and 41% IRR within five years (see Exhibit 1) are the main motivators. Based on our market research, we believe the high revenue would come from an expanded customer base, increased order frequency/size and reduced costs. Going beyond the financial rewards, the strategic impact of the project is not only to increase our penetration rate and customer service quality in the short run, but also to enhance
The internet can inexpensively increase WPTV visibility, reduce operating costs, increase revenue, expand customer base, easily and effectively target important market segments.
1. What Internet business model would be appropriate for the company to follow in creating a Web site and why?
Your trip data reflects that you scheduled transportation to attend a 7:45 am appointment. You were given a 5:45 am estimated pick-up time, and a 1:30 pm pick-up time for the return trip.
Business needs Isuzu Australia Limited (IAL) has a large national dealer network which is the driving force behind the business. The company needed a solution to improve the speed and accuracy of communications between head office and the dealerships as well as facilitate increased collaboration with business partners.
Since Wal-Mart is a mass market retailer, its primary source of value that it adds to the company is derived from its supply chain. Wal-Mart has suppliers located all over the world and it purchases goods from a wide range of different types of vendors. Many of the company's primary vendors are directly connected to Wal-Mart's IT systems through what is referred to as an electronic data interchange (EDI). An EDI can instantaneous transmit data between Wal-Mart and their vendors. Such information can consist of order information, stock supplies, demand forecasting and many other key supply chain metrics. The advantages of such a system are clear as they can greatly assist creating efficiencies in the supply chain. However, not all suppliers have developed sufficient IT technologies to participate in an EDI program with Wal-Mart. Another option for greater coordination between parties in the supply chain is web-based supplier integration. Although the web-based systems are not quite as sophisticated as an EDI, they are more accessible for many of the smaller suppliers and they have shown to improve long-term coordination, cooperation, and commitment.
Companies strive to choose not only the best marketing channels, but also the best profitable channel. A profitable channel can promote and successfully sell out of a product that might not otherwise turn a profit for their producers (New Charter University 2015). “The calculations from the cost accountant for the retail segment accounts were 60 percent of sales, and for the foodservice segment accounts were 40 percent. The cost accountant believes that both channels are profitable. The accountant also believes that the company achieves an overall average gross margin of 60 percent on its sales (Bowersox, D. J., Closs, D. J., Cooper, M. B.,
4. Relations with Suppliers- Wal-Mart has in place a system that helps to achieve their goal of lower prices. This Information Technology system includes computers, networking, and internet that cuts inventories and waste and helps with speedy delivery. This system also helps Wal-Mart to keep in constant contact with suppliers by transferring the data that suppliers need so they know what Wal-Mart needs. Wal-Mart also works with suppliers to improve their production and squeezes the best prices out of its supplier. The video referred to Wal-Mart as the customer’s agent. All of this focus Wal-Mart puts on suppliers reduces costs and lowers prices. Wal-Mart’s technological/logistical leadership remains unmatched by competitors (Web, 2005).