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AmazonFresh.docx - AmazonFresh: Rekindling the Online...

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AmazonFresh: Rekindling the Online Grocery MarketUntil late 1990s and even after that majority of grocery shopping was being done by way oftraditional grocery models that were generating a weekly sales of $450,000 of which their netincome was 1%; reason for this was high COGS, labor expenses and spoilage happening everynow and then. Moreover, this was the biggest and the only sector in retail category of U.S. whichwas not sent online until late 1990s. Webvan and HomeGrocer were the one who took themonline but they did not survive for long due to their lack of focus on profitability and more focuson entering into new territory. All this while AmazonFresh was looking over them and after fiveyear of research and investigation launched themselves in 2007.1.What is your assessment of the online grocery market opportunity? What explains prior failuresin this market?According to me this opportunity of shopping online for grocery is very lucrative and intriguingfrom point of view of both provider and customer but a SWOT analysis of this market revealsthat there are more threats than strengths of this business. But if we analyze the entire marketeverything is available at single click on our mobile screen which had made every one very lazy.Adding on as the net in hand income of people is increasing so is their desire for comfort zone ison rise and accordingly, grocery market going online will be the most profitable business incoming years. After studying the case study along with numerous article available on web, myassessment made me conclude that online grocery business will be a hit in the future no matterhow many failures it witnessed in the past.Following explains the reasons of prior failures in the market:Companies cannot rely on FedEx and UPS but have to have their own infrastructurelogistics because food had to be kept at pre-decided temperature to maintain their quality.Now as we know in the traditional model one can go, pick up items and pay for them andcome home with them so in order to shift consumer from offline to online: companiesneed to provide same day or at max next day delivery.Company need to prepare a different warehouse with cold storage and set up such as tofacilitate the unloading of items and packaging of one and single order at the same place
Focus on entering into new territory rather than improving existing business model is themajor reason of their failure

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Term
Fall
Professor
NoProfessor
Tags
Supermarket, Grocery store, Safeway Inc, SuperValu

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