Strategy question
Design a strategy for Safeway if their sales are declining in areas with competition from Instacart and Blue Apron.
- Safeway
- Strategy
- Hard
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What this question tests
Tests competitive strategy for a legacy grocery retailer under disruption: can you name concrete defensive and offensive moves against delivery-first competitors rather than a vague 'improve digital' answer.
How to approach it
- Clarify the threat: Instacart erodes foot traffic with delivery convenience, while Blue Apron competes for the meal-planning occasion with pre-portioned kits.
- Diagnose which threat matters more by area: where Instacart wins, the issue is convenience; where Blue Apron wins, it's meal-planning decision fatigue, a different job-to-be-done.
- Propose a response to Instacart: strengthen Safeway's own delivery and pickup experience and loyalty pricing so customers have less reason to use a third-party app.
- Propose a response to Blue Apron: launch a meal-kit offering using Safeway's existing supply chain and private label, cheaper to source than Blue Apron's shipping model.
- Address loyalty and pricing: use loyalty data for personalized local promotions that a marketplace aggregator cannot easily replicate.
- Define success as recovered same-store sales in affected areas and first-party delivery share of online orders versus third-party.
What a strong answer includes
- Separates the Instacart threat (delivery) from the Blue Apron threat (meal planning), correctly recognizing they need different responses.
- Proposes a meal-kit response that leverages Safeway's actual supply chain cost advantage over Blue Apron's shipping model.
- Names loyalty data personalization as a defensible advantage a marketplace aggregator cannot easily replicate.
- Picks a metric distinguishing first-party from third-party order share, tied to reducing dependency on Instacart.
Common mistakes
- Treating Instacart and Blue Apron as the same type of threat requiring one generic response.
- Proposing to simply 'invest more in digital' without a concrete mechanism or supply-chain advantage tied to Safeway specifically.
- No geographic segmentation, despite the prompt specifying declining sales 'in areas with competition', implying a localized diagnosis is expected.
Likely follow-up questions
- How would you decide which markets to prioritize for the meal-kit launch first?
- How would you keep first-party delivery cost-competitive with Instacart's model?
- What would you do if a large share of your own customers still prefer ordering through Instacart despite your improvements?
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More questions from Safeway
Learn the skill behind it
Chapters of the AI PM course that teach what this question tests.
- Chapter 4: Discovery and strategy for AI products
- Chapter 9: Prove it paid off: outcomes, economics, and pricing
- Chapter 14: Get the job: the AI PM interview loop