Essay on Fresh Direct Case Analysis

966 Words Aug 16th, 2013 4 Pages
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
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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

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