Case Solution

Andrew McAfee, Mona Ashiya
Harvard Business School ()

He investigates how Webvan works and the processes used to deliver food ordered over the Internet to customers’ homes. It tells the story of Webvan from its inception to early 2001, focusing on its unique approaches to warehousing, delivery, scheduling and, to a lesser extent, marketing and information technology. It also looks at the rest of the Webvan business model and how it was written. At the time of the crash, there is great pessimism in the press and in the company’s share price that Webvan will be able to run its business model profitably or even stay in business. Webvan’s business model was largely based on well-designed and executed operations, and it seems clear that the company’s operations were neither. Furthermore, the discrepancy between the operational capabilities of the visit and the operational requirements imposed by the rest of the business model appears to be severe.

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