Businessmodel of Safeway

Customer Segments

Safeway has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at anyone who seeks food and drug products.

Value Proposition

Safeway offers four primary value propositions: accessibility, convenience, risk reduction, and brand/status.

The company creates accessibility by providing a wide variety of options. It offers a full spectrum of food and general merchandise departments, including specialty departments such as seafood, bakery, delicatessen, floral, and pharmacy. Also, most stores include Starbucks coffee shops.

The company offers convenience by making life simpler for customers. It offers a grocery delivery service that enables consumers to get items delivered same-day if they order before a given time. New customers can try the service one time for free.

The company reduces costs through a variety of options. It maintains a section on its website that offers weekly specials. It also gives shoppers the opportunity to earn points through purchases that can be used for discounts at gas stations.

The company reduces risk by maintaining high quality standards. It maintains precise handling procedures and high-quality specifications, which has enabled it to develop a reputation for the best produce on the market.

The company has established a powerful brand due to its success. It is one of the largest food and drug retailers in the U.S., operating more than 1,300 stores across the United States. It has also won a number of honors, including the following:

• Recognition as one of the World’s Most Ethical Companies by Ethisphere Magazine
• Distribution Management Association Circle of Excellence Award
• Recognition as one of the Healthiest 100 Workplaces in America
• Corporate Philanthropy Awards from the Washington Business Journal
• The U.S. Department of Defense Freedom Award ### Channels

Safeway’s main channel is its network of retail stores in various regions across the U.S. It also sells products through its website. The company promotes its offering through its website, social media pages, advertising, and in-store promotions.

Customer Relationships

Safeway’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Safeway’s business model entails distributing its products and delivering related services to customers.

Key Partners

Safeway’s key partners are the suppliers that provide it with the products and services it needs to run its operations. These include raw materials for the private label foods it produces.

The company also maintains an affiliate program through which it invites third parties to promote it through their platforms (websites, mobile apps, etc.). Referrals that lead to purchases result in commissions.

Key Resources

Safeway’s main resources are its physical resources. These include the over 1,300 stores it operates in California, Hawaii, Oregon, Washington, Alaska, Colorado, Arizona, Texas, and the Mid-Atlantic region of the U.S.; its 19 manufacturing/processing facilities; and its 13 distribution/warehousing centers in the U.S.

It also maintains important human resources in the form of the associates that work at its stores. Lastly, it places a high priority on intellectual property, with over 450 trademarks registered and/or pending in the U.S. It considers trademarks of material importance to its business.

Cost Structure

Safeway has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of goods sold, a variable expense. Other major drivers are in the areas of operating and administrative expenses, both fixed costs.

Revenue Streams

Safeway has one revenue stream: revenues it generates from sales of products to its customers.