Internet Penetration: TESCO's plan to become ISP was simply visionary and shows how serious they were about e-tailing. WEBVAN missed the actual numbers of Internet penetration as well as prospective clients who would have been using website for
grocery shopping. If we look the numbers for 8.5 Lakh customers, TESCO was generating 2.5 Lakh orders a week, but WEBVAN was generating merely 15 Thousand orders for 7.5 Lakh customers.

Phased Investment in Hi-Tech Infrastructure: Where TESCO kept it simple, WEBVAN went on building state-of-the-art automation technology for its distribution centre. It would have been wiser to test the feasibility of business plan before getting into such a huge capital investment, especially in the days when labour was much cheaper then such kind of high-end technology. The investment made by TESCO was mostly for making customer experience better, which was the need of the hour.

Strategic Collaboration: WEBVAN's collaboration was also a mis-fit with its business model. It is necessary to have collaboration which can compliment the business model, especially in the days of start-up. Within pne year of starting business, it was not a good time to merge with a business where one would need to spend money for major re-structuring of business itself.

Summary Profile

Concluded.

* Contributed by: -
Saurabh Shukla is II Year Student of PGDSM-MIT (Batch 2007-09) at S. P. Jain Institute of Management & Research, Mumbai. Had previously worked at Infosys Technologies Ltd. for 3.5 Years.
Article posted on January 25, 2009.