Fresh Direct is a company that allows you to order your food online and get next day delivery, their motto is “Our Food is fresh; our customers are spoiled….. Order on the web today and get next-day delivery of the best food at the best price, exactly the way you want it with 100% satisfaction guaranteed.” The primary business is to allow customers to order their food online and avoid going to a grocery store they can buy anything they want online and you can have it delivered to your house.
Key players would be the people who launched the business in 2001 Joseph Fedele and Jason Ackerman. Many companies have fallen online with the grocery service and they boldly stated they were the “greatest way to shop for food” this again was a bold statement in many of these chains have fallen. Company launched in 2001 and by 2011 you had to have a order of 30$ with a delivery fee associated with it. The company started to fall apart when the competition start to raise in the industry that is when they started offering local grown and organic but there were some fields they just couldn’t compete with. Private Company Founded: 1999Sales: $200 million (2005 est.) NAIC: 311991 Perishable Prepared Food Manufacturing.
* Has strong financial assets
* Powerful online grocery brand
* Advanced food technology with software system
* Strong relationship with local stores and distributors
* Approach is very innovative
* Sold perishables and they had not attentions customer demanding
* They are only focused on selected zip codes
* Depends on a main competitive advantage
* Senior management keeps changing on 4th CEO
* Had reputed brand names and its customers are highly trusted
* May expand
* Start delivery of imperishable products
* To take over, merge with, or form strategic goals with other online grocery stores
* Wholes Food has already threaten food sales
* Traders Jo’s opening stores around their area
* Visible cardboard boxes are environmental threat
* Trucks parked in big city streets have made congestion issues
ANALYSIS VIA PORTER’S FIVE FORCES MODEL
Threat of New Entrants:
The e new entrants requires a big capital,, experience, understanding the advance technology system, learning online grocery stores and access to suppliers and distributors STRENGTH: LOW
Threat of Substitute:
The local suppliers, distributors and corner stores are other options of the customer to buy fresh food. FreshDirect is familiar of its brand name and mostly customers loyal to them STRENGTH: LOW
Power of suppliers:
FreshDirect has known by its brand its customers are loyal with its products. If the suppliers has its own good brand in the market they can easy access with local shops or supermarket, but they already have good relationships with suppliers STRENGTH: MEDIUM
Power of Buyers:
In the modern era the awareness of the online customer is high; they have access everything by using the internet and ability to analysis the price and quality of FreshDirect and its competitors and can switch over easy. STRENGTH: HIGH
FreshDirect have advances online and food technology and had good knowledge in management but they are weak to deliver coverage and daily food usage products. STRENTH: MEDIUM
They are positive because they have innovative regarding advance food technology and their customers are loyal with the company. The price is low and the quality is better than rivals. The employees seem to be performing their jobs very well. Their main customers are direct, local stores and restaurants. Porter Generic Strategy A. Overall cost leadership. FreshDirect related to online grocery chain, so online order safe the paper cost. Reduce management staff by using de-layering policy, there is no middle man. Delivered effective training and coaching to the staff B. Differentiation: FreshDirect need innovative approach regarding its products and services. Its brand must be unique among the customers, develop the knowledge and technology with differentiate then others can’t easily adopt it C. Focus: focusing on particular customer groups or segments of the production line. Needs to focus to improve the quality of products and looking what the customer wants.
THE ISSUES AND CHALLENGES FACING THIS COMPANY
Their main issue that is affecting FreshDirect is the online competition; the online business is very competitive environment. Also, the company sells products that are perishables, food like vegetables, fruit, and meat. COURSE OF ACTION RECOMMENDED
One area that they could improve on having sales weekly like the stores do. Also, having trucks that are better suited for carrying perishable foods, so they won’t anger their customers. OPINION
I found this case study to be very interesting and informative. I learned about the organization and the problems it currently faces. After analyzing and doing a SWOT analysis of the case help me to understand where it stands and goals of the company. There are many solutions I feel that will benefit this organization.
http://www.freshdirect.com/about/index.jsp;jsessionid=HNYFQP7JLx22DchQ6vLm12gGrVb5P12tD7sH4TVYLnqnXX9pHNbT!-244301007!- 408313503?siteAccessPage=aboutus&successPage=/index.jsp Dess. Strategic Management text and cases, 6th Edition. McGraw-Hill Learning Solutions, 2012.