1. Webvan | Group 3 Case Presentation MBUS 626 | Fall 2014 Kaitlyn Aliota | Soumi Chanda | Katie McCalden

2. MANIFESTO

3. EXECUTIVE SUMMARY History Operations Technology Failure “It’s going to be a $10 billion company or zero.” - Borders

4. COMPETITIVE LANDSCAPE Traditional brick-and-mortar grocers Online Options o Peapod – 10 markets o HomeGrocer.com – 6 markets o Kozmo.com Opportunity to “deliver the last mile of e-commerce”

5. INFORMATION SYSTEMS STRATEGY TRIANGLE

6. BUSINESS STRATEGY 1. Innovation: Attract audience to a new shopping experience via reengineered supply chain model 2. Web-based revenue generation IT Strategy 1. Highly automated order fulfillment/delivery technology 2. Online Ordering System 3. Optum, Inc. ORGANIZATIONAL STRATEGY 1. Economies of Scale 2. Deliver “last mile into consumers’ homes” (couriers as ambassadors) 3. Efficiency (time delivery guarantee)

7. REENGINEERED SUPPLY CHAIN Highly automated centralized DC Carousel technology “Eaches” and “pickers” Optum Inc. warehouse management system

8. “IF YOU WANT TO FLY TO MARS, YOU DON’T BUILD A ROCKET SHIP TO CARRY YOU HALFWAY THERE.” – WEBVAN SPOKESMAN

9. WHY WEBVAN FAILED Too big, too fast Complicated infrastructure Disregard of consumer behavior “Internet era’s equivalent of the movie ‘Waterworld,’ a disaster so epic it becomes American legend” – Wall Street Journal

10. LESSONS LEARNED WEBVAN Optimize resources before further investment Test radical ideas of innovation and differentiation Reconcile demand forecast with actual demand

11. LESSONS LEARNED DOT.COM ERA Internet provides convenience Some aspects of everyday life may never migrate online IS/IT triangle mismatch Too big too fast

12. DO ONLINE GROCERS HAVE A FUTURE?

13. THANK YOU Webvan | Group 3 Case Presentation MBUS 626 | Fall 2014 Kaitlyn Aliota | Soumi Chanda | Katie McCalden