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Fresh Direct Case Study Report Free essay! Download now

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Fresh Direct Case Study Report

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Analysis of a case study on Fresh Direct


Fresh Direct Case Study Report

FreshDirect,, online grocer
Jason Ackerman and Joseph Fedele cofounded FreshDirect in 2001, not long after other online grocers had failed. Less than three years later, its iconic refrigerated trucks could be seen all over the Manhattan streets. “Ackerman and Fedele split up the responsibilities based on their expertise. In that Bloomberg interview, Ackerman said, ‘Joe, having worked at -- and built -- Fairway was responsible for bringing in all of the supply. And I focused on how to actually take all the supply and get it within the warehouse and actually get it to the customer, which was no small feat’” (Goldberg, 2010).
The idea behind the company is to give consumers the freshest food possible by getting food directly from the producers. FreshDirect allows customers to place orders online, then it prepares the foods at its processing center in Long Island City and it is delivered during a prearranged time that day. Though it has had at least 5 different CEOs since it was founded, as of May 2011 the current CEO of FreshDirect is Jason Ackerman.
It has a wide selection of low price items with high quality.
It uses an advanced software system to manage production.
Strong relationships with local growers and distributors.
A warehouse close to its customer base that has 12 separate temperature zones.
Extremely high standards for health, safety, and cleanliness.
Limited offering of nonperishable products.
Small sales area, focusing on selected zips codes in and around New York.
Slow to diversify into packaged and nonperishable products.
Senior management has changed many times (at least 5).
Reputable brand name and customer loyalty increase business through word-of-mouth advertising.
May expand local business, and possibly expand nationally by merging with another grocer.
May start offering nonperishable products along with its popular fresh products.
May become a publicly traded company.
Competition from specialty food retailers such as Whole Foods or Trader Joe’s.
Competition from other online grocers such as YourGrocer, Peapod, or Netgrocer, especially with nonperishable products.
Traffic congestion and potential charges resulting from it.
Rising fuel prices may force an increase in food price and delivery charges that could hurt sales.
Threat of New Entrants: Low
New entrants would require a large amount of capital and experience in the grocery industry. They would also need an understanding the advanced technology needed as well as relationships with local suppliers.
Threat of Substitute Products and Services: Low
The local suppliers, distributors and corner stores are other options of customers to buy fresh food. But FreshDirect is familiar of its brand name, and mostly customer are loyal with FreshDirect
Bargaining Power of Suppliers: Medium
FreshDirect has known by its brand its customers are loyal with its products. If the supplier has ...

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