Upscale Markets-Value Creation In A Mature Industry

January 24, 2014

Table of Contents
1. CASE OVERVIEW 3
2. DISCUSSION QUESTION ANSWERS 3
3. ALTERNATIVES ANALYSIS 5
4. CONCLUSION 5

1. CASE OVERVIEW

In this case, Blake Ives, the CEO of Upscale Markets, was at a crossroad of whether start to build an online store to seek further growing profit. Upscale Markets was a seven-store local grocery chain in Dallas, TX. Ives was inspired by the huge success of a virtual store project in subways running by Tesco named Home Plus in Korea. They showed the products visually by using monitor in
Loyalty card data was also play an important role in customer service. It was the information for the store to identify the customers and record how much they purchased form the store. In other words, It reflect how important this customer to the store. For example, store provides different discounts or outlets for the different level of customers which was grading by the Loyalty card data. Web shopping delivered most impact on customer service. Based on website, customer could make special request such like purchased two pineapple which one was ripe and the other was half ripe simply by add a note online for the picker. Just like what they did in store personally.
If I were Ives, I would not implement online grocery shipping in Dallas immediately. First, I need to analyze the current customer purchase products in each store. Figured out where my customers mostly lived and what the buying power of them. Then, estimate the possible increase of customer consumption based on the other similar store and situation of my store. Calculate the cost of implement and maintain online store and the additional cost such like picker salary and deliver cost. Finally figured out whether the increase consumption of customer by online store will bring benefit or not. If not, project over. If yet, still I can not begin online store in all stores. A pilot store was necessary to test whether the theory would work in the real word. I would choose the store