Company Background
Webvan was an online grocery store that operated on credit and delivery basis. Webvan was founded in 1996, and it had its headquarters in California, Foster City (Delgado, 2001). It offered fantastic services as customers had their products delivered at their doorsteps thirty minutes after making a purchase. Its services were provided to about ten US markets, and they had an objective of expanding to 26 cities. The big dreams of this company were short-lived since it flopped in 2001 (Bensinger, 2015). Webvan ran out of cash as it ended up spending more than the sales it made, hence it was rendered bankrupt.
Statement of Problems
In this section, Webvan’s internal strengths and weaknesses will be listed as well as its external threats and opportunities
Strengths
Webvan had advanced technology that was highly automated to facilitate correct filling of orders and making deliveries on time (Nogueiro, 2015).
Provision of excellent customer service.
The online system is easy to navigate, and it is secure for clients-especially the credit card information ("Webvan case study - Ace Recommendation Platform - 3," 2016).
Webvan had a wide variety of items compared to its competitors.
It had sufficient distribution centers to ensure convenience and efficiency in delivering products to customers (Nogueiro, 2015).
Weaknesses
Little emphasis was put into the design of the delivery system hence it did not infuse quality practices for customers (Nogueiro, 2015).
Webvan overestimated its abilities in that it wanted to provide a broad range of products to an extensive market at the same price as traditional stores. This led to the company spending more than the sales it made ("Webvan case study - Ace Recommendation Platform - 3", 2016).
It implemented a complex system that was not being used to its full capacity, and that became one of the factors that led to its downfall (Nogueiro, 2015).
Webvan lacked a sufficient customer base, since the internet at that time was not wholly accepted as a means of purchasing groceries.
At that time, bulk products received so much popularity in increasing sales. Sadly, Webvan did not offer this hence it is seen as a weakness since its competitors were offering the same (Nogueiro, 2015).
Opportunities
The use of an online platform is a great opportunity because the utilization of the Internet for grocery purchases was predicted to increase over the coming years.
In the 1990s, startup companies were heavily funded by capital markets ("Webvan case study - Ace Recommendation Platform - 3", 2016).
Webvan already had quite an extensive customer base; diverting their interest towards ensuring repeat customer orders would be a great opportunity since it would not only maintaining the customer base but also increase it (Nogueiro, 2015).
Threats
Webvan had a capital intensive business model and at that time it collided with an uncertain situation of whether the e-business would grow ("Webvan case study - Ace Recommendation Platform - 3", 2016).
Lack of continuous support from its investors.
Companies such as Kroger posed a significant threat as they offered the same services as Webvan ("Webvan case study - Ace Recommendation Platform - 3", 2016).
Lack of buyers and seller bargaining power.
There is also the threat of upcoming businesses into the market since clearly the internet is widely growing and upcoming organizations were bound to come up (Nogueiro, 2015).
Target Market
The most suitable target market for Webvan is the time-starved shopper, and this is most likely a single working mom or a young professional. Webvan would best serve such a market since they find grocery shopping a thankless task. Such people have a busy lifestyle, and most likely they are career bound. The services offered by Webvan would be the best since it would have a lot of time and money that they would have incurred in grocery shopping.
E-marketing Strategy
Product
The main idea in this context is that Webvan was involved in both tangible and intangible products. They offered a delivery service to customers and provided products too. The most suitable marketing strategy, in this case, would be brand building. The customers should be able to identify with the unique feature of shopping online, and the services must stand out to attract customers. For instance, Webvan delivers products within a 30-minute window of the client’s choosing. Another strategy would be to ensure that the goods provided are not only of a wide variety but also cater for the vegetarians and customers with unique dietary preferences. This approach would most definitely increase the client base.
Price
Place
Online platforms is a convenient place for groceries since one can locate the products without physically going to the shop. This strategy can be achieved by enhancing search engine optimization to ensure that more people get to access and view the services offered. Since it is an online space, privacy of the customer should be highly considered.
Promotion
A good marketing strategy entails selling the right product at the right place and the right price. Once this is in place, promotion comes in to ensure that the sale of these products is a success. Various advertising strategies can be infused in this case; they involve different ways of disseminating correct and relevant information to consumers.
Brand building is an advertising strategy that the company undertakes to ensure that it builds users’ trust. This can be made a success by making the brand stand out through first creating an appealing website and probably ensuring that the packages used are branded and they suitable to consumers’ needs.
Social media promotions strategies are can also be well used in such an instance. That can be achieved by creating rich and informative media content, having social media campaigns and encouraging participation of consumers on the online platform through giveaways and contests.
Video promotion is also a viable method where animated videos are made and shared on various websites and social media channels so as to ensure an increased brand popularity. SMS marketing also provides information about Webvan’s products, and services are widely spread to potential customers.
Despite the fact that Webvan is an online platform, offline promotion could also do some good. This can be achieved through the distribution of pamphlets, brochures, use of newspaper adverts and banners among others.
References
Bensinger, G. (2015). Rebuilding History’s Biggest Dot-Com Bust. WSJ. Retrieved 4 August 2016, from http://www.wsj.com/articles/rebuilding-historys-biggest-dot-come-bust-1421111794
Delgado, R. (2001). Webvan goes under / online grocer shuts down -- $830 million lost, 2,000 workers fired. SFGate. Retrieved 4 August 2016, from http://www.sfgate.com/news/article/Webvan-goes-under-Online-grocer-shuts-down-2901586.php
Nogueiro, L. (2015). Homegrocer Case Analysis. Prezi.com. Retrieved 4 August 2016, from https://prezi.com/vqq5zeofniwi/homegrocer-case-analysis/
Relan, P. (2013). Where Webvan Failed And How Home Delivery 2.0 Could Succeed. TechCrunch. Retrieved 5 August 2016, from https://techcrunch.com/2013/09/27/why-webvan-failed-and-how-home-delivery-2-0-is-addressing-the-problems/
Webvan case study - Ace Recommendation Platform - 3. (2016). Learningace.com. Retrieved 4 August 2016, from http://www.learningace.com/doc/2938883/16c90660f6309c41468163584b0fe0aa/webvan-case-study
