Why Do You Think Webvan Failed

Topics: Marketing, Grocery store, Grocer Pages: 2 (595 words) Published: July 4, 2012
On this paper we will explain about Webvan, when it was established, how the people welcoming the idea of having such service through the network and will discuss if Webvan achieved the goals or did it made any profit from its business, why they didn’t success and the reason for failed these companies.

Webvan was the name of a company and they were doing online grocery delivery business. In 1996 webvan started grocery delivering services it offered customers the convenience of shopping from home and having their purchases delivered within a 30 minutes window of their choosing. The customers were satisfied through its delivering services. But the company basically lost money instead of making profit and hence become bankrupt. There were some online grocers in companion like Tesco and peapod in the market when they feel that webvan is an unsuccessful online grocer. They started to capture the market place by using go-slow approaches to sell groceries over the internet and this was the basic reason of kicking out of webvan from the market. In 2001 Webvan become bankrupt because of several reasons like huge initial investment, lacked grocery experience, and lacked market research as they don’t have any strategic plan for target market. Comparing with competitors there were some other reasons of their losses such as they didn’t mention brand name, lacked customer database, out of field experienced board members, low price marketing strategy, delivery of groceries were free of charge, however this was proved that the sustainability of online grocery business can be achieved through go-slow approaches and partnership with existing grocery chains.

Of course we see Webvan was good business it was like a luxury service which help the customer and for them it was cheaper, for example the delivery was free of charge, that was only in the beginning, although the delivery was free of charge they goods they purchase were sold with higher price than the existing stores ,it...

References: http://jigarpparikh.wordpress.com/2011/02/03/why-do-you-think-webvan-failed-so-spectacularly/
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