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Strategy Case Study

Two entrepreneurial companies… both having access to significant resources (highly


funded)… seeking to exploit the same opportunity (online grocery business and delivery)…
at the same time… With fundamentally different strategies

Webvan — purchased distribution centers, developed automated warehouses, plus


automated ordering, purchasing, and delivery systems.
Peapod — established partnership with Ahold (Stop and Shop)

While each strategy has it's pros and cons, here's a bit more about what happened in this
case:

 Webvan ultimately burned through ~$1 billion and went bankrupt less than two years
after its IPO. Their strategy required a lot of resources.

 Peapod established a highly profitable niche business, with Parkinson brothers still in
direct operational control of the company.
Strategy Case Study

Tactus Technology Swiftkey

Two entrepreneurial companies… Both innovators in mobile keyboarding… Both with


similar valuations and at a similar company stage (Series B financing)…

Yet the two companies have staked their future on very different “visions” of how to “win”
the keyboard market…

TactusTechnology has focused on establishing a strong IP position, with 15 issued and


45 pending patents. “We made a choice to go with intellectual property…”

Swiftkey has focused on bringing their product to market, with three software generations
over the past four years, and significant follow-on innovation in the area of predictive text

 Tactus Technology has a longer cycle to results based on needing to file IP. There are
articles both in favor and opposed to the potential of the company going forward.

 Swiftkey has met with much success, including being used on Android and iOS devices.
Summary
While there is rarely a right or wrong answer of the strategy you might choose, it is
important to focus, and consider the tradeoffs associated with your choice.

Webvan chose a product/service strategy (control over the complete value stream), while
Peapod chose a value stream strategy (optimizing just on the delivery while partnering
with current companies for the remaining pieces). In this case, the Peapod strategy of
collaboration proved more valuable, though many companies such as Apple and General
Electric.

Tactus Technology chose the strategy of assets (control over IP), while Swiftkey chose
disruption (first to market securing large customers). Swiftkey has gotten some early
success by going more quickly to the market, while obtaining IP has slowed Tactus
Technology. The IP may become valuable in the long term, though the market may shift
making it less valuable, which is a risk from taking this additional time to file.