WEBVAN
- This is a preview of the essay.
To view the full text you must login!
Traditional Grocers
Despite the stunning failure of Webvan, traditional grocery retail chains are creating value from the online channel. The Chief Financial Officer and President of Safeway, a major traditional grocer in the United States, was quoted (Levine, February 2002) saying "The online grocery business in the United States has dramatically changed in a few short years. We believe the successful online grocery models will be operated by established brick-and-mortar grocery retailers." Now, despite the spectacular failure of Webvan, these traditional grocery chains are having great success online after carefully testing the offering. In addition, traditional grocers have the advantage of an established brand that companies such as Webvan simply didn't have. Furthermore, the traditional grocers have discovered that they have a strong core advantage being able to leverage their existing infrastructure to scale operations once they have been proven. Finally, traditional grocers have discovered that the Internet and technology can help to increase productivity in their operations and help to increase profit margins.
From our team's research, the most obvious advantage that traditional retailers had over the online competitors was the advantage of time. As we showed in our case, Webvan had raised huge expectations and capital. Most of the investors believed that there was a distinct "first mover advantage...