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Why Is It Important To Drive-Thur?

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Looking at the threats facing the Amazon grocery drive-thru is beneficial because it allows the business to analyse external factors they may impact the success of this new line of business. The top three external factors include: market trends, economic trends, and funding and potential return on investment (ROI). If this new concept is not considered carefully, the Amazon brand may be tarnished, putting existing and successful lines of business at risk. Market trends include the competitors in the Greater Toronto Area (GTA), and advanced technology that may threaten the drive-thru concept. The most threatening competitor is Walmart. Walmart currently offers three grocery-shopping options, providing customers a choice and convenience. Walmart’s …show more content…

Key financial considerations that will impact ROI include availability and costs for commercial real estate (for grocery pick up locations) located near higher income households; and the availability and costs for labour to run these locations. Commercial real estate in the GTA is limited and amongst the most costly in all of Canada. According to the Toronto Real Estate Board, in 2014, the average sale price per square foot for commercial property was $234.79 (GTA Commercial REALTORS, 2014). Assuming that the locations need to be near higher income households, it would be safe to assume that the average sale price per square foot may exceed $300. The availability and hourly wage of grocery service labour may present a further threat. Assuming locations near high income neighbourhoods will diminish the number of potential employees at or near minimum wage and as a result, this a premium may have to be paid to staff the locations. Both funding factors (real estate and labour) will have a negative impact on the return on investment. Lastly, as Amazon is a publicly traded company, meaning “any person, company, or other institution can own at least one share of a company’s stock” (Shareholder Definition, 2003), the impact of launching this new line of business on Amazon shareholders must be considered. This is a threat because if the ROI for the new service is unfavourable, shareholder …show more content…

The most threatening competitor is Walmart. Walmart currently offers three grocery-shopping options, providing customers a choice and convenience. Walmart’s “Grab & Go” is a shopping service that allows customers to place an order online, and then pickup their purchase in a Grab & Go locker. These lockers can be found in Walmart stores or 7-Eleven stores across Ontario, and have 46 locations providing them with locational excellence (Shipping Options, 2015). Walmart’s “Pickup” grocery service allows customers to order online, then drive to one of eleven locations in Ontario, and then have their groceries brought to their car (Shipping Options, 2015). This service exceeds customer excellence as well as locational excellence. Walmart’s last grocery option is a “Drive-Thru” service that is currently being tested in Bentonville, Arizona. Customers make their purchase online, and then pickup at the drive-thru location (Anderson, 2014). This is a major threat to the Amazon drive-thru because Walmart is ahead with respect to testing this option. Walmart is the nation’s biggest retailer and grocery chain, so if they are successful with all three of their services, they will likely have a large and immediate customer base for their “Drive-Thru” service. Another competitor in the GTA is the grocery service “Urbery”. Urbery is a same-day grocery

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