Webvan

By: Andrew Mcafee and Mona Ashiya

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Synopsis: Examines Webvan's operations and the processes by which it delivers groceries that were ordered from the Internet to customers' homes. Recounts Webvan's history from founding through early 2001 and concentrates on the unique approaches to warehousing, delivery, scheduling, and to a lesser extent, marketing and information technology. Also examines the rest of the Webvan business model and how it was formulated. At the time of the case, there is great pessimism, reflected in the press and the company's share price, that Webvan will be able to execute its business model profitably or even stay in business. Webvan's business model relied heavily on properly designed and executed operations, and it appears clear that the company's operations were neither. In addition, the mismatch between visiting operational capabilities and the operational requirements imposed by the rest of the business model appear to be severe.