Student No.12098007D Name : Ho Kin Ting The Monopoly of Wellcome and PARKnSHOP.
In June 1996, an innovative shop which was called “adMart” was established by the inaugurator of Next Media Ltd., Mr. Jimmy Lai. adMart was an antenna shop which received order from customers through Internet or phone calling. Also it provided the door-to-door delivery service for free. adMart mainly sold foods, drinks, commodities and some electronic devices. A delivery firm, ezVan, was simultaneously established. In fact the competitive advantages of adMart were the relatively low selling price and the free delivery service. Unfortunately, adMart closed down in December 2000, due to a continuous loss. As the case stands, adMart’sdegree of acceptance was not high because of its negative news. However, adMart’slow acceptance was not the only reason for its closing down. The two main supermarkets, Wellcome and PARKnSHOP, have strategically made use of their brand popularity and prestige, also their small fortune, to snipe adMart.
Although the Internet and phone call ordering and free door-to-door delivery service were the innovative ideas, adMart was a new shop. Obviously it had not much capital and a popular brand. By comparison, Wellcome and PARKnSHOP had much more capital for trial and good prestige for cost minimization. Before the establishment of adMart the Internet selling was not popular. It was known that adMart brought the trend of Internet selling. The two main supermarket became aware the fresh shop and the innovative selling method. They knew that adMart would be one of their enemies, therefore they started their new marketing strategies to snipe this fresh shop.
Wellcome and PARKnSHOP made use of their capital, they set up their own delivery line and aimed at sharing the market of Internet selling. Besides, they offered their customers some premium, like offering free delivery service for customers who bought above $60....
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