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Grocery checkout case study
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Case Study of: Grocery Checkout
Case Study of: Grocery Checkout
By: Daime Hameed, Garth Gray, and Tinbite Yilma
Introduction
GCO is a grocery delivery service, that allows customers to order and pay for groceries.
The company was started in 2005 by a student named Nathan Felder
By 2009, GCO acquired nearly 3,500 customers and accumulated over $1 000 000 in sales
With the success and growth of GCO, Felder must decide where the company will expand and where to invest to continue growth.
Problem Identification
- Investors want an increase in revenue
Many different options, all having their risk-reward ratio
- Mobile application
- Not relatively expensive
- Rapidly expanding market
- Physical store on campus
- allow the company to get closer to their prime customer base
- market advantage for GCO over any competitors
- Competition is just around the corner
- Would they be able to handle competing against the larger chains operating in the Greater Toronto Area (GTA)?
- Most of them already have the advantage of significant corporate resources and lower costs due to supplier volume discounts
Causes of the Problems
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ANALYSIS
POLITICAL
POLITICAL
The online delivery business is a growing market and has a relatively low entrance requirements. Without requiring companies to acquire special licenses or large capital to have facilities that need to follow up to specific regulations, now young entrepreneurs, like Felder, could start and grow a business in the field without requiring vast amounts of investments.
ECONOMIC
GCO was started primarily with the student life in mind, always busy with both time and cash being tight. A grocery delivery service made that easier and manageable.GCO maintained its customer base by focusing on affordability
SOCIO-CULTURAL
Tasks like grocery shopping are time-consuming but a necessity. For students, many of whom don't have cars and work alongside going to school, makes the job even more of a hassle
TECHNOLOGICAL
Many businesses are focusing more toward online stores rather than traditional brick and mortar, The internet is where people are going to the products they need
5-Forces Analysis
Start with yourself...
N
EW ENTRANTS
N
UPPLIERS
S
C
ONSUMERS
OMPETITION
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NDUSTRY
I
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IVALRY
ANALYSIS
Decision Criteria
(ALTERNATIVES)
G
ROWTH
ELL COMPANY
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ARTNERSHIP
S Q
TATUS UO
S Q
ENTURE CAPITAL
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EDGE
FUND
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EAL ESTATE
INVESTMENT
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Grocery Check Out
R I S K
Risks
- Nathan Felder had made a decision to survive against larger competitors and finding innovative ways to differentiate and enforce favorable marketing tactics to maintain customer base, in which was a huge risk.
- Felder had also lack both the knowledge and had limited sources of marketing, while heavily investing in advertisement.
Strategies
- Growth
- Physical grocery store
- Assessment of financial liability
- Advertising/Marketing
- Status Quo
- Risk of economic recession
- Selling/Partnership
- Break into online grocery market
- Venture Capital
- GCO is already a small business
What is the best option?
HEDGE FUND
+
REAL ESTATE INVESTMENT
not dependent on success of business
high risk + stable market
LOYALTY/MEMBER REWARDS PROGRAM!
CONCLUSION
GCO had both internal and external factors that affect its business as an entity and how it progressed in the industry. The strengths however outweighed both the weaknesses as well as the threats; this is supported by the steady growth in profits as well as the lack of competition in the market. GCO’s opportunities seemed much greater as the business is still so fresh that there is much room for expansion, growth and changes in direction