Fresh Direct Case Study

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Fresh Direct Case Study
23–30 Borden Avenue
Long Island City, New York 11101
Telephone: (718) 928-1000
Fax: (718) 433-0648
Web Address:
Business Type: Online Grocery
Private Owned Company
Background – History
FreshDirect on-line grocery was founded in 1999, by Joe Fedele, and Jason Ackerman. Started as an on-line option to traditional grocery stores, the company specializes in delivering a wide variety of about 5,000 items. Sales of such things as fruits, vegetables, seafood, prepared entrees and sides, coffee, meat products, deli and cheese products, and bakery items, are just a small part of what the company markets. The company provides same day as well as next-day delivery to
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Trader Jo’s another specialty food retailer opening a store in downtown union square.
YourGrocer, created with a bulk-buying strategy.
Another big threat for FreshDirect; in early 2007, NYC government proposed congestion charges for traffic entering into Manhattan.
Local stores or distributors also make a strategy for delivering perishable products.
Rising of fuel prices may also be a potential threat to FreshDirect.
FreshDirect visible cardboard boxes are also an environmental threat.
Rivals of FreshDirect may adopt the advanced food technology software system.
Analysis via Porter’s Five Forces Model Force | Strength | Threat of New EntrantsStart-up costs would be very expensive for new players to enter the marketplace. They would have to be highly skilled, with a lot of existing experience in online grocery services, as well as already having a large amount of capital. FreshDirect is already a known quantity. | Low | Threat of SubstituteWith technological advancements, it has become easy for people to purchase foods online. They can also buy products in stores, which would increase the competitive market, but then the consumer has the added burden of driving to a location. | Low | Power of SuppliersFreshDirect is known for its brand, and its customers are loyal. If the supplier has its own brand name in the market, they can easily interface with local shops or supermarkets, but FreshDirect already has good relationships with suppliers and local
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