Webvan Free Essays

The STEEP analysis concluded that the company is in an age of increasing technological advances, which must be maintained and Implemented to sustain operation. Grocery services will always be required even In a down or slow economy and currently there are few political or environmental situations that would affect the company. In the following section, Waveband’s Internal strengths and weaknesses will be discussed as well as the company’s external opportunities and threats. We will write a custom essay sample on Webvan or any similar topic only for you Order Now Strength Waveband has many strength within their operational practices as well as their marketing practices. One of Waveband’s strength is their ability to provide good customer service to their consumers. Waveband does not charge membership fees and waives delivery charges for orders over $50. Their ability to fill orders accurately and deliver them on time is another strength. For both of these areas, Waveband has an upper ninetieth percentile ranking. With their state-of-the-art technology, they are able to uphold good delivery policies with ample distribution centers, while maintaining a wide selection of products and services. The company’s store site contains good content, has usability ease, and provides policies that ensure consumers’ privacy and secure credit-card Information processing. Weakness One of the company’s weaknesses Is that Waveband Is trying to be all things to people. Francis Gaskin of Gaskin PIP Desktop stated that Waveband â€Å"Bit off a big mouthful†. Waveband is taking a chance trying to provide service as well as convenience and to do this for the same price as grocery stores. To be able to do this Waveband has implemented a complex business system, which currently has only been proven at owe capacities, nowhere business system, which currently has only been proven at low capacities, nowhere close to the order volume levels for which it was designed. Waveband is currently operating at only 40% of their operating capacity and are having difficulties In managing rapid growth in personnel and operations. Another core weakness Is Waveband’s lack of a sufficient customer base, order volume, net sales or Incoming cash flows. Waveband has experienced high capital expenditures associated with building and operating their distribution centers systems and technologies. Even though they are realizing a 70% return customer rate, they need to create an even larger initial customer draw to the store site, this is proving difficult since there is a lack of widespread acceptance of the Internet as a means of purchasing groceries and other consumer products. Also, the company does not cater to those individuals who have procrastinating natures and wait until their shopping is a necessity. Waveband’s technology and delivery requirements cannot operate efficiently enough to offer same day delivery. A final reason for their weak customer base is that Waveband does not offer bulk products at discount prices as buying options, which has recently increased In popularity. Opportunities One of the opportunities that Waveband needs to focus their attention on Is their 70% repeat customers order level. To maintain peak operation, a company must not only work to bring In new customers, but It must malting the customer based that already has. Maintaining its repeat customer base will be a more cost efficient next to last on a survey of the least liked household tasks. If Waveband can obtain these customers for the first order and delivery, they have a strong likelihood that the customers will try another order. Experts predict that American Internet access will triple by 2003 and the online grocery industry is expected to rise to upwards of one billion dollars. The potential consumer base is growing and if Waveband can attract these consumers, they will receive high levels of revenue. Conversion from being an e-grocer to an e-tailed is a substantial opportunity. The profit margins in groceries are low so expanding their product lines and their variety will help Waveband cover the lower margins, increase their consumer base, and expand their customers’ opportunities and loyalties. Threats Lack of continued support from investors will mean that Waveband will not be able to keep the company running long enough to expand its customer base to the size that would be large enough to make a profit. If the brick-and-mortar chains, such as Kroger, developed and promoted a home delivery grocers service, competition would increase and it would be more difficult to attract customers. An existing brick-and- mortar store would already have established practices and brand recognition, which would be difficult to match at this early stage of Wavebands existence. Http://www. Slithered. Net/Electroweak/download-it-4077554# How to cite Webvan, Papers