Upscale Market: Value Creation in a Mature Industry

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added value is defined as the portion of the total value created that would be lost if the firm did not take part in the exchange.

[Price Consideration]

Price becomes important to gauge what portion of the value created each entity partaking to the transaction can appropriate. [This would take place when Ives needed to decide how the each employ would get paid, how much each item would cost, how much delivery cost would be and so on and so forth]

[The firms added value is also a measure of its competitive advantage because it measures the extent to which the firm is able to do something unique.]

[Strategic Information Systems]

We define strategic information systems as those information systems used to support or shape competitive strategy of an organization.

[IT-Dependent Strategic Initiatives]

IT-dependent strategic initiatives refers to identifiable competitive moves and projects that enable the creation of added value and the rely heavily on the use of IT to be successfully implemented.

IV. [case question]

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 mentioned at the end of the case?

Value proposition is defined as the benefits of potential client gets by using your product, service, or idea. Through value proposition you are able to find out what the customer really wants but keep in mind it is different for everyone but the main value is always kept the same. The customers believe that online shopping is flexible and cost-time efficient than real stores. The innovation in customer service Ives mention at the end of the case is bank clerks, gas jockeys, and pay telephones.

What new capabilities doe the following innovations bring to customer service in the grocery industry: scanner data, loyalty card data, web shopping?

Web-based shopping provides convenience in customer shopping. They can purchase whatever they want without having to go to the store. Scanner data made all the products in the store digitized into a data and presented as a code which is scanned during a transaction. The loyalty card data is information for the store to identify who each customer is and how much money they spend at the store.

What would you do if you were Ives? Should Upscale Markets implement online grocery stores in the Dallas, TX market? How similar, or different should it be from the Rice Epicurean initiative in Houston, TX?

I would not implement online grocery shopping in Dallas. There is a lot of analyzing that needs to be done. For instance, they need to figure out the current customers purchase products in-store, what area the customers are from, the amounts they are willing to pay for items. They need to figure out whether online shopping will be a benefit to the company. I would do things a little different. I would test the online shopping but the customers are only provided with in-store pick up. In-store pick in the beginning can elevate any unforeseen delivery risk. All problems and questions can be handled and adjusted in store. After new months of seeing how the in-store pick up works then the store can see if they need to hire produce product pickers (ripe or unripe) and ect.

How sustainable is any competitive advantage for Rice Epicurean? For MyWebGrocer?

Rice Epicurean has already established itself in the online grocery shopping world. They analyze their current experiences and purchase information from the past-which helps them serve their customers better. This positive cycle helps with the competitive advantage-and MyWebGrocer is in the same boat as Rice Epicurean.