Executive Summary Webvan was dedicated to providing customers with a shopping solution that saved time and effort without sacrificing the quality selection or low prices that consumers had come to expect of traditional grocery stores. Webvan’s sophisticated system filled orders accurately 99% of the time and provided on-time deliveries 92% of the time. When the system ran at its intended full-design capacity, it was expected to generate an operating margin of 12% compared with the grocery industry’s norm of 4%. In this marketing plan, we analyze the profitability of this new venture, with a particular focus on the distribution system of Webvan. Situational Analysis (5Cs) Company Established in 1999, Webvan aspired to provide better service than was available at modern supermarkets through a same-day delivery system; within a customer selected 3-minute window.
Threat of New Entrants is weak. Entry barriers are high because of the economy, significant experience-based cost advantages, other cost advantages held by industry members (e.g., access to inputs, favorable location), brand loyalty (which comes from membership and other services), strong network effects and high capital requirements. 5. Substitute Products or Services is moderate. Warehouse clubs like a magnet for customers and pulling them away from other traditional retail channels such as supermarkets, department stores, drugstores, office supply stores, consumer electronics etc… All three warehoused club rivals - Costco, Sam’s and BJ’s – have similar strategies: Low prices, low operating costs, geographic expansion – Costco; Sam’s Club concept is to sell merchandise at low profit margins, which means at low prices to members; and BJ’s offers brand-name merchandise at prices that were significantly lower than the prices found at retail, supermarkets, dept.
Outsourcing brings proven benefits in the form of economic leveraging, increase in the quality of products and it provides a number of opportunities to less developed countries. For example in recent times, Americans are overwhelmingly supporting the major retail stores like Wal-Mart, Target and K-Mart. The reason behind this consumer loyalty is that it has become much easier to shop at these locations rather than the local mom and pop stores located on the corner of most neighborhoods. The benefit is that you can purchase everything on your shopping list from one location, saving you time, money and gasoline. In a highly competitive business world, on a firm’s priority list is the subject of increasing profit and reducing cost.
So grocery stores in poorer neighborhoods stock less milk and more soda, and the relentless advertising from the beverage industry and fast food joints makes sweet drinks an expected part of daily living. (633) This would be especially true for the poor because they have less money to waste, and they would think twice before using money to buy foods or drinks. The lower-price drinks would be more affordable. Increasing the cost of sugary drinks will change people’s opinion and behavior because healthy choices and bad choices will become equal. People always consider the price before the product’s quality so if the prices are the same, they will certainly prefer the quality and healthy choices.
Point #2: Tariffs protect American jobs and wages. (Points: 13) I find this position to be valid. Protective tariffs are designed to raise the retail price of imported products so that domestic goods are more competitively priced (Nickels, McHugh & McHugh, 2008, p. 76). Therefore, if products are competitively priced then the consumer will be more likely to purchase domestic products instead of imports. Since consumers will be more likely to support American vendors, this will keep the American businesses running and not force them to cut costs to compete with imports.
The switch is easy and cost-efficient. c. the ratio of fixed to variable costs is high: Inventec has to reduce prices to utilize installed capacity. (e.g. its new manufacturing compound in Pudong, Shanghai) d. OEMs own the distribution channel and make the rules. 2.
Advertising is a large part of Target’s marketing management. The retail stores sell a large variety of high quality items at lower prices than the competitors, therefore, selling more products. Target’s marketing team is constantly re-evaluating the products sold to assure that their customers stay satisfied with the items that are in stock. To guarantee that customers stay completely satisfied, Target will special order items if requested by a customer. To continue to be the largest retail store, Target has to make sure that their prices are the lowest and that the products they sell meet all of the wants and needs of each customer.
I feel like Wal-Mart is strong financially. They have continually offered lower prices than their competitors in the discount store industry, and I believe they will continue to do so (“Stock Research Reports - 2011 Stock Ratings - TheStreet Ratings”). Mass merchandising is a form of retailing in which a store sells large quantities of staples at very low prices and has very
This potential error is eliminated through the automated mathematical system which never makes a mistake, making the accuracy very advantageous. This advantage in turn saves the company money as mistakes create a chain reaction, making it very difficult to fix. The limitation of human errors is one of the best advantages that come with computerised accounting systems. A second benefit of using a computerised accounting system would be that is saves the company a considerable amount of money. Lower cost can be brought about through computerised accounting systems as it is far more efficient.