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Fresh Direct Case Analysis

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Fresh Direct Case Analysis
Fresh Direct Case Study Report
COMPANY NAME
Fresh Direct www.freshdirect.com Online Grocery Market
BACKGROUND /HISTORY
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


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
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