KENNETH C. LAUDON AND JANE P. LAUDON
ENHANCING DECISION MAKING
FreshDirect Uses Business Intelligence to Manage its
SUMMARY FreshDirect is the largest online grocery firm in the New York market, and one of the largest in the country. With more than 250,000 customers ordering over
8,500 products every day, the company faced severe logistics and management decision making issues. To solve these issues, FreshDirect adopted a comprehensive enterprise data base system from SAP which utilized a number of business intelligence applications to track orders and customers. The video describes how the database system enables managers to control FreshDirect’s daily operations and plan longer-term enhancements. L=4:30.
CASE FreshDirect is an online grocer making more than 45,000 deliveries a week to customers throughout most of New York City and parts of Long Island, Westchester
County, New Jersey and Connecticut. With revenues approaching $300 million a year, the company seems to be one of the few examples of a start-up, online grocery business actually being profitable. Most previous start-up, online groceries have failed, while existing traditional grocery stores have been more successful in online delivery from their local physical stores. For instance, a leading example of dot-com excess was the flame out of online grocery start-up Webvan in 1999.
Chapter 12 , CASE 1 FRESHDIRECT USES BI TO MANAGE ITS ONLINE GROCERY 2
Webvan burned through $1.2 billion from investors in order to launch its online grocery business in ten markets. Webvan went bankrupt in 2001.
FreshDirect was founded in 1999—just prior to the burst in the Internet bubble. The business plan for online groceries was to focus on a high-density, single metropolitan area like Manhattan in New