Webvan Marketing and Financial Plan



Executive Summary

Can the Internet change behavior patterns of customer purchasing? This is very risky as many Internet start-ups have disappeared or are currently facing great difficulties. In 1996 Louis Borders started a Webvan which was established for selling groceries through internet i.e. World Wide Web. After the resignation of the George Shaheen, Anderson took the CEO seat of Webvan. The origination of Webvan as an online service of grocery, food delivery and offering non-prescription drugs was to make life of the people much easier than before. The vision of Webvan was to offer online grocery shopping solutions which will save the valuable time of consumers as well as their efforts without any quality scarifying, selection and prices lower than the traditional brick and mortar stores. Hence, they developed a strong business model which are linked with their mission and objective which was to offer solution for grocery shopping. There are four sections in this report which has highlighted their strategies such as financial and marketing and other analysis in order to see how they came up with this idea, what factors were providing them opportunities and growth and which factors were or might hinder currently or in future. Beside this, The survey conducted by University of Michigan in 1990 researched reading the American consumers preferences that showed their preferences on grocery shopping with 22 other daily activities ranked next to last. Hence, out the total, 75% was people in 8 different metropolitan markets which were females. While 60% was living in the dual income-households with 60% of the people has children and lastly the 75% people were college students and 85% respondent were age within 25 to 49. The age of sub-urban home-owners ranges from 30 to 35 years having young children with $50,000 of income. Sub-urban home-owners were spending more or less $110 per order along with the charges of membership. Hence, the IPO report of Webvan shows that the company would be controlling two truck hub and system which will talk regarding the distribution which will take almost two years for it development. Each market this will be serving and Webvan will construct a distribution hug that will be around a 300,000 to 400,000 sq foot. Webvan face many challenges that is no doubt that online grocery is very appealing but not each person has include and accept online shopping of grocery as a replacement for regular move to the traditional supermarket store. Due to plan and delivery idea might be the reason why people believe that online purchasing of grocery as a disadvantage for online grocery shopping. Other risk arise is due to understanding the consumer behavior and their concept of the online grocery shopping. Factors which has negative influence on the decision of consumers regarding buying groceries or any other product through internet is due to cost of shipping, security of credit card number, immediate product delivery and social features of online shopping experience. Though the aim of Webvan is to be ...