Fresh Direct Case Analysis Essay
Fresh Direct Case Analysis
In describing the company Fresh Direct, their primary business is an online grocery store that first began in 2001. Fresh Direct specializes in delivery services for your shopping needs in various zip codes in New York. The zip codes include: Manhattan, Queens, Brooklyn, Nassau County, Riverdale, Westchester, select areas of Staten Island, New Jersey, and Connecticut (www.freshdirect.com). The company currently holds over 600,000 customers on the direction of Jason Ackerman, the company’s Chief Executive Officer. Not only is he the CEO, but he is also the cofounder with Jim Manzi, the company’s chairman.
In 2010, Fresh Direct claimed well over $250 million dollars. Fresh Direct set their goals high when they began, unfortunately their goals of reaching 5% were not obtained until 2011. The company had to gain more exposure and reach out to other states to reach their goal of 5%. However, the company had more problems in 2007 from their employees. Not only did they have to let go of employees due to immigration reasons, but employees made heavy complaints about their low wages.
Below are examples of the SWOT analysis showing internal strength, external weakness, external opportunity, and external threat? Internal Strengths
Prices are very affordable making their competition’s customers come to them. Internal Weaknesses
Since the company’s sales are all online, it may be a challenge to switch to retail.
The population in New York is becoming over-populated, thus more online customers.
When the interest rates increase, the consumer spending lowers in sales. I
ANALYSIS VIA PORTER’S FIVE FORCES MODEL
Below the competitive environment is analyzed by listing the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry among competitors in the industry in a key point figure.
Bargaining power of supplier
Threat of substitute products and services
Learning curve of the main idea
Threat of new entrants
Consumer interest to shop elsewhere
Bargaining power of buyers
Difference in products
Knock off of your brand
Fresh Direct sustains a competitive advantage by focusing, leadership, and differentiation from other companies. By using these strategies, Fresh Direct has advanced in their industry. Fresh Direct implemented make to order which separated them from the competitor. A major difference to
separate them from the competitor is their delivery times are in a set punctually for their customers to be happy. THE ISSUES AND CHALLENGES FACING THIS COMPANY
It is very possible for Fresh Direct to keep the competitive advantage. They need to focus and make new ways to bring in customers. All consumers like sales and coupons, by providing satisfaction to their customers can make them come back more often. They can also attempt to lower their prices by obtaining better distributors with better prices. Due to their issues in 2007, they are in a consolidated stage in their company. Since the company is trying to grow, not shrink, this is a good thing. Fresh Direct leads to show high end quality and should not be changed. Positive energy will bring in positive energy, why would they want to change something that is not broken. The only thing they need to work on is the pollution their trucks are causing the environment. If they work on this situation and come out with a resolution, it would be better for them. COURSE OF ACTION RECOMMENDED
If I was in a position to advise this company, my strategy would be to continue doing what brought them money in the first place. Do not change anything if it works, when you begin to get creative, things may go wrong. A lot of reporting will need to be conducted so new strategies can be implemented. However, the key is to stay in the field they are in. When the competitor attempts to knock off Fresh Directs strategies, Fresh Direct can be in the lead. OPINION
My opinion in this case is a learning experience. Most companies that begin in the correct route are always on top of their league. This company even though it had its ups and downs, was able to bring themselves back up to the top. By doing so, the company brought profits instead of more losses. This goes to show that hard work and dedication will always strive to the top. Along with good management and good advice, any company can bring themselves back up. Like the great depression, unless you have seen failure, you will never know the true meaning of achievement.
Dess, G., Lumpkin, G. & Eisner, A. (2012). Strategic Management (6e). Boston: McGraw-Hill Irwin.