Fresh Direct Operation Strategy

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Strategy and Operations:
FreshDirect
* Visit freshdirect.com and type 10012 for zip-code.
* What is FreshDirect’s business concept/strategy? Value proposition to customers? * How well have earlier online grocery stores performed?
* Is FreshDirect successful?
* If so, what are the reasons for its success?
* “…Webvan's founders erroneously thought… a competitive advantage simply by being Internet based. * From experience, Mr. Ackerman can say the Web itself confers no real competitive advantage. * He says what will attract customers instead is superior-quality food, at a lower price than available at their supermarkets.” * Webvan pulled inventory from warehouse shelves when orders came in. * FreshDirect, … preparing and packaging items only in response to individual customer orders. The company orders directly from farmers, dairies, beef processors and dockside fish markets, and packages orders from a 300,000- square-foot ultramodern plant just across from Manhattan in Long Island City, Queens * “…the company can deliver fresher food than that offered by the local grocery stores, at a price about 30% lower. * … elimination of middlemen suppliers

* … eliminate another big cost that plagues the supermarket business: spoiled food the grocery business typically sees 8% to 30% of … prepackaged baked goods… produce go to waste because they pass their shelf life before they can be sold.” * says FreshDirect has a more-logical delivery scheme … lumping together all deliveries from a particular neighborhood. … Webvan's problems … serve each order individually, by a fixed time, … being frequent delays or missed deliveries. Mr. Ackerman likens FreshDirect to Dell Computer Corp., which makes computers to … orders. Unlike Webvan and supermarket chains … that … offer Internet delivery orders …, "We're not a delivery company, we're a manufacturing company," he says.’’
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