Value Creation Ism

Major Issues/Problems Identified:

* Costs:

There will be lot of costs involved while creating a web based shopping solution. These costs are related to hardware, software and applications that are to be implemented in house to integrate with the vendor's web site.

* Competition:

There will be lot of desired and undesired competition when a new technology is introduced. Ives should be able to survive in the competition after some period of time though he will have first mover advantage in Houston

* Defined Roles:

When there is a third party vendor involved in providing a technology, roles should be well defined in order to create efficient and smooth functioning of operations.

Recommendations:

* Identifying market segment:

It is very essential for Ives to assess opportunities in each segment to deliver superior value to customers. He can use various tools and resources to identify the segment

* Maintaining balance between technology and customer satisfaction:

A new method of shopping should always try to exceed customer expectations in order to survive in the market. Customers should feel that the change is for good.

* Creating value preposition for target customers:

The value preposition should be made based on target customer's preferences and choices to gain a competitive edge over others. Even where the offer made to customers is technically identical to competitor's offers, efforts to differentiate the total or package offer in terms of customer segment as well as market segment can reap significant rewards.

What is the value proposition to the customer of Web based shopping? How does it compare to the other innovations in customer service that Ives mentions at the end of the case?

A value proposition is a short statement that clearly communicates the benefits that a potential client gets by using your product, service or idea. Value proposition must focus closely on what your customer really wants and values. Strategy should be based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation, this requires a clear articulation of targeted customer segments and the value proposition required to please them. Clarity of this value proposition is the single most important dimension of strategy. The value proposition should describe the perceived cost/performance (benefits) over competitions. They should primarily focus on Product categorization, Price, Placement/Target market, Promotion.

What new capabilities do the following innovations bring to customer service in the grocery industry: Scanner data, Loyalty