Chris Jones is Managing Director of SS, a medium sized supermarket chain faced with intense competition from larger competitors (T1) in their core food and drinks markets (s1). They are also finding it hard to respond to these competitors moving into the sale of clothing and household goods (O1). SS has a reputation for friendly customer care (s2) and is looking at the feasibility of introducing an online shopping service (O2), from which customers can order goods from the comfort of their home and have them delivered, for a small charge to their home.
Chris recognises that the move to develop an online shopping service would require significant investment in new technology and support systems. He hopes a significant proportion of existing and most importantly, new customers will be attracted to the new service.
a) What bases for segmenting this new market would you recommend and what criteria will help determine whether this segment is sufficiently attractive to commit to the necessary investment?
b) Assess the likely strategic impact of the new customer delivery system on SS's activities and its ability to differentiate itself from its competitors.
