Success and failure of pure‐play organizations: Webvan versus Peapod, a comparative analysis
| Date | 01 December 2006 |
| Pages | 1344-1358 |
| DOI | https://doi.org/10.1108/02635570610712618 |
| Published date | 01 December 2006 |
| Author | Stephen E. Lunce,Leslie M. Lunce,Yoko Kawai,Balasundrum Maniam |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Success and failure of pure-play
organizations: Webvan versus
Peapod, a comparative analysis
Stephen E. Lunce
MIS Department, Dillard College of Business Administration,
Midwestern State University, Wichita Falls, Texas, USA
Leslie M. Lunce
Computer Information Technology Division, North Lake College of the Dallas
County Community College District, Irving, Texas, USA
Yoko Kawai
MIS Department, Dillard College of Business Administration,
Midwestern State University, Wichita Falls, Texas, USA, and
Balasundrum Maniam
Department of General Business and Finance, Sam Houston State University,
Huntsville, Texas, USA
Abstract
Purpose – The purpose of this study is a comparative analysis of two electronic grocers, one success
and one failure, in order to attempt to identify the critical success factors that contributed to their
different performances.
Design/methodology/approach – Four aspects of each company’s operations are explored and
compared in this side-by-side case study. The foci of this study are strategic management, logistical
infrastructure, information technology deployments, and marketing strategies.
Findings – The success of Peapod was the result, in general, of application of good strategy and
knowledge about the opportunities provided in e-commerce. Webvan’s failure, in general, was
attributable to the design of its logistics system, the misunderstanding of the capabilities of
information technology, and ineffective marketing.
Research limitations/implications – This study investigates only two online grocers, and the
lessons learned in this comparative case study may not be applicable to other types of online business.
Practical implications – This paper provides insights into successful retail e-commerce operations
through the comparison of successful and unsuccessful firms in a specific business. From the analysis,
businesses and individuals who are considering the future of e-commerce for their enterprise should
better understand the factors that contribute to success and failure in a pure-play environment.
Originality/value – Several studies have investigated how internet businesses function, and how the
customers of online businesses differ from traditional business customers. Some studies have offered
comparisons of differing levels of performancewithin a specific e-b usiness;however, this report investigates
the reasons for the success and failure through its comparative analysis of specific managerial activities.
Keywords Internet,Strategicmanagement, Onlineoperations, Retailmanagement, Electronic-commerce
Paper type Case study
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0263-5577.htm
Research assistance provided by: Bonston Hutton, MBA; Greeshma Kavalasoma, MBA; Hanne
Beate Lorstad Magnussen, Cand. Jur., MBA; and John Reid (students of MIS 5203, 2005).
IMDS
106,9
1344
Industrial Management & Data
Systems
Vol. 106 No. 9, 2006
pp. 1344-1358
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570610712618
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