E-Grocery, founded in 2005, is an online grocery shopping and delivery service. The company caters to thousands of customers in the Phoenix, Seattle, and Denver areas.

Established on the idea that people will buy groceries over the Internet, e-Grocery offers over 25,000 items. Ninety percent of e-Grocery's orders come in via computer; the rest are received by fax. Orders are received at the central office in Lakewood, Colorado, and then distributed by e-mail to a local affiliate store. The store receives the order, the delivery address, and a map to the order location.

A store employee designated to online orders will fill, deliver, and collect for the order. E-Grocery members are charged actual shelf prices, plus a per-order charge of $5.00 or 5 percent of the order amount, whichever is greater. Members also receive additional benefits such as electronic coupons, customer discounts, recipes, and

PROJECT FOCUS

The company is using interactive technology to change the shopping experience. The success of e-Grocery lies within many areas. Analyze the e-Grocery business model using the questions below. Feel free to think outside the box to develop your own analysis of online grocery shopping and e-business models.

1. What is e-Grocery's e-business model?

2. How does e-Grocery compete with traditional retailers?

3. What value can e-Grocery offer as a true competitive advantage in this marketplace?

4. What is the threat of new entrants in this market segment?

5. How is e-Grocery using technology to change the shopping experience?

6. What are the logistics for making e-Grocery profitable?

7. How does e-Grocery profit from online customer interaction?

8. What kinds of e-business strategies can e-Grocery's marketing department use to help grow its business?

9. What are some of the benefits and challenges facing e-Grocery?