We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Fresh Direct Case Analysis Essay Sample

essay
The whole doc is available only for registered users OPEN DOC

Get Full Essay

Get access to this section to get all help you need with your essay and educational issues.

Get Access

Fresh Direct Case Analysis Essay Sample

FreshDirect is an online grocery that conveniently sells and delivers fresh foods and popular household items, to certain residents of the New York City Area. This online grocery market offers organic, farm-fresh produce than most market places. It covers most of Manhattan and certain parts of The Bronx, Brooklyn, Queens, Staten Island and limited areas in New Jersey. Vice Chairman and CFO Jason Ackerman and cofounder Joseph Fedele first launched FreshDirect in the summer of 2001. This company’s goal was to capture around 5 percent of the New York City grocery market.

SWOT ANALYSIS

Strengths
• Convenience is their greatest attribute, by selling and delivering grocery products online. • FreshDirect does not paying high rent to store their products, eliminating the middleman. • Advanced product inventory software.

• Reputable brand name.
Weaknesses
• High CEO turnover.
•Customers want to be able to see touch and smell their products before they buy them.
• Slow expansion and company growth.
• Only serve selected zip codes areas
Opportunities
• Potential expansion to other areas.
• Customer rating of products
• FreshDirect increase sales of organic foods.
• Smartphone apps to order food
Threats.
•High parking fines in NYC.
•High rise of gas prices.
• High levels of traffic congestion.
• Competition from other local grocery stores and online services such as, Amazon, NetGrocer, PeaPod

ANALYSIS VIA PORTER’S FIVE FORCES MODEL
Threat of New Entry:
While on shelves existing stores are a constant threat, there are not equipped with online delivery options. However, Amazon’s new entry to the grocery market share can potentially impact FreshDirect’s options. Buyer Power:

This threat can be a potential risk in a similar way Wal-Mart has bullied others with their low prices. However, Wal-Mart is not a major risk at this time, at least at an online delivery service. Even though Wal-Mart has a small grocery department, it is not at the same scale as FreshDirect. Supplier Power:

FreshDirect has a good relationship with its suppliers and Farmers. Due to the large capacity FreshDirect is able to uphold, with their location warehouse, it can store large amounts of bulk of items. This allows them to deliver products within 4 million people within a 10-mile radius, and have it delivered. Threats of Substitution:

Local grocery stores and supermarkets are a threat of substitution. This all depends on the geographical area, as some locations can be almost impossible to park and carry out your groceries, if customer resides on a higher floor. For instance, New York City is none for its lack of parking spots and heavy congested roads. It is ideal for customers in these locations to opt out from a trip to the supermarket or local store.

Competitive Rivalry:

Technical advantages are quickly diminishing for FreshDirect, as competitors are also constantly upgrading their systems. Rivals, like PeaPod have innovating ideas to take its share of this online grocery market. Even tough, FreshDirect currently have a well performing system to keep track of inventory, this system can become obsolete within a matter of years. It is important to stay ahead of their competitors from a technological aspect.

STRATEGY USED

In order to create an efficient online grocery market chain, FreshDirect, strategy used was customer convenience. Operating this strategy by eliminating the middleman, in order to deliver fresh organic, fresh-farm produce to its customers. Operating at this level, it seems this company is on its way to reaching, and even surpassing their own set goals. To capture five percent of New York City’s grocery market is no small task. However, by expanding their coverage area, this can create a high volume of traffic for their company. Also, by having stocking power of carrying a greater array of fresh food, with its bigger facility, it remains one step ahead of its competitors.

THE ISSUES AND CHALLENGES FACING THIS COMPANY

Competitors such as, Peapod, with savvy marketing strategy, may be a challenge in earning market share for FreshDirect. This competitor has found a way to reach customers in subway platforms, in Chicago busiest metro stations. PeaPod has turned subway platforms into supermarket isles. This virtual grocery, gives smartphone users quick access to their products while on the go. There is a potential for this innovating idea is quick to catch up in upcoming towns, where normally dominated by FreshDirect.com.

COURSE OF ACTION RECOMMENDED

If this company were to seek for my advice, I would recommend to keep investing in Information Technology. It is obvious that technology drives and it this is the forte of this company. However, I believe they need to come up with more innovating ideas to reach and gain capital in this competitive market. The ideas and strategies their competitors are executing such as, Peapod way to reach customers in the subway halls, is a pure ingenious way to reinvent the playing field. Perhaps, FreshDirect need a similar approach before it finds this type of marketing in NYC, where it is its own backyard.

OPINION

This has been a very clever way to understand the way a company functions from a business perspective. Ultimately, this case analysis shows the business strategy with great examples of company successes, as well as its struggles. This great stepping-stone, and it can be applied to any other company. For example, by understanding this illustration of FreshDirect’s vision and business model, can help anticipate, and outperform future challenges, when we potentially reach the business market.

REFERENCES
Dess, G., Lumpkin, G. & Eisner, A. (2012). Strategic Management, (6ed) McGraw-Hill Irwin. Personal Communication. Woodruff, Mandi (2012) This Savvy Online Grocer Is Turning Subway Platforms Into Supermarkets. http://www.businessinsider.com/take-a-look-at-the-company-thats-turning-subway-platforms-into-supermarkets-2012-5

We can write a custom essay

According to Your Specific Requirements

Order an essay

You May Also Find These Documents Helpful

Business Organisation at BettaValue Supermarket

Describe how working practices at BettaValue have developed by completing the tasks below. a Describe the current organisational structure and the range of job roles. How do they differ from the original structure and job roles? BettaValue Stores is a supermarket near where you live. It was started 10 years ago by a Mr Matthew Richards, who set up the business in a corner shop...

Applications of ICT as Used at a...

* Each item is swiped over a bar code reader. The bar code is printed on the packaging by the manufacturer. * The computer looks up the current price listed against the bar code in a database. * Discounts or loyalty credits are taken care of. * The prices for all items are added up to provide a total - usually shown on a digital...

SWOT Analysis

Deciding on a company to invest in should not be done without careful consideration. An analysis should be done first to help determine if the risks of investing in a company are likely to pay dividends. A SWOT analysis is a way to help an investor make that decision. A SWOT analysis is a tool that evaluates the strengths, weaknesses, opportunities, and threats of an...

Comparison Between Emerging & Developed Markets

 The emerging market is any market which is rapidly taking place in a developing or undeveloped country. The market taking place outside United States, Western Europe, Australia, Canada is emerging market. The countries that are dominating the world through their policies and goods are considered developed market economies. It is easier to determine which countries are not emerging market economies than it is to determine...

Key Concerns for Supermarkets in Ensuring the...

Since the middle of the last century, the concept of branding has become more and more influential in marketing. Brands rather than companies have turned out to be the greatest competitors in the market since consumers can easily identify them as compared to company name (Leading Edge, 2008). Due to the increasing competition in the market, companies have found it necessary to brand their products...

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

We can't stand spam as much as you do No, thanks. I prefer suffering on my own.
logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?