Grocery Checkout Case Analysis
Case Overview and Key Issue
Grocery Checkout Inc. (GCO), an online grocery delivery service was founded in 2005 by Nathan Felder and his fellow teammates at the University of Western Ontario (Western) as part of their business project. Recently, investors of GCO have been pressuring Felder continually for faster growth, and he has a number of growth approaches under consideration. As the co-founder and chief executive officer (CEO), Felder wanted to reflect on which option would be the best fit for GCO and how it might affect his role in the company.
Company's Strategy
CGO originally focused on convenient service, as it was founded on the idea to serve students without transportations. Felder believed that the business should also focus on quality and value to be sustainable and therefore adopted a product/service differentiation strategy for CGO.
Macro Environment Analysis - PESTEL Political Environment: As a Canadian controlled private corporation (CCPC) with only $35,805 net income before tax, GCO's operation is encouraged by the Canadian government through various tax incentive programs. The tax incentive programs include small business deduction (SBD) which reduces the applicable tax rate for the company and the R&D tax credits and cash refunds which could ease the financial burdens on GCO in technology developments. Economic Environment: Based on the statistics provided, the Canadian retail grocery industry has been growing continuously. This growth in the market and demands benefited GCO through increasing business opportunities. In the recent years, the macro-economic environment has been suffering from recessions. As a result of that, people attempt to cut spending to save money by actions such as dine out less, drive less and reducing shopping frequency. This has led to further increase demand in the food retail industry and online food retail companies like GCO enjoys from people's attempt to save gas money. Although the economic
Grocery Checkout Inc. (GCO), an online grocery delivery service was founded in 2005 by Nathan Felder and his fellow teammates at the University of Western Ontario (Western) as part of their business project. Recently, investors of GCO have been pressuring Felder continually for faster growth, and he has a number of growth approaches under consideration. As the co-founder and chief executive officer (CEO), Felder wanted to reflect on which option would be the best fit for GCO and how it might affect his role in the company.
Company's Strategy
CGO originally focused on convenient service, as it was founded on the idea to serve students without transportations. Felder believed that the business should also focus on quality and value to be sustainable and therefore adopted a product/service differentiation strategy for CGO.
Macro Environment Analysis - PESTEL Political Environment: As a Canadian controlled private corporation (CCPC) with only $35,805 net income before tax, GCO's operation is encouraged by the Canadian government through various tax incentive programs. The tax incentive programs include small business deduction (SBD) which reduces the applicable tax rate for the company and the R&D tax credits and cash refunds which could ease the financial burdens on GCO in technology developments. Economic Environment: Based on the statistics provided, the Canadian retail grocery industry has been growing continuously. This growth in the market and demands benefited GCO through increasing business opportunities. In the recent years, the macro-economic environment has been suffering from recessions. As a result of that, people attempt to cut spending to save money by actions such as dine out less, drive less and reducing shopping frequency. This has led to further increase demand in the food retail industry and online food retail companies like GCO enjoys from people's attempt to save gas money. Although the economic