Company Overview/Key Strategic Issues
FreshDirect is an internet-based direct sales grocery marketer that operates in the greater New York Metropolitan area. The retail grocery industry is the operating area but the company offers a remarkably unique model which offers more fresh food than prepackaged, and therefore serves a customer base who may do bulk shopping monthly but needs to supplement this weekly with fresh produce, meats and other perishable goods as well as at least a limited amount of prepackaged foods. The company was launched in the summer of 2001 and operates from a production center in Long Island City, which affords the company a 4 million person potential customer base within a 10-mile radius. (Pearce & Robinson, 2005, p. 35-2) Some of the major issues with regard to FreshDirect is the ability of this service to demonstrate growth in a niche market (online grocery delivery service) that has seen many start up failures. (Kummer, 2006, p. 152) FreshDirect from the beginning chose to offer a service that was very different from many like it, in that they chose to eliminate the middle man and as much as possible buy directly from the grower/producer.
The company demonstrates a rigid flexibility that seems to be working, even as other online grocers are failing. FreshDirect offers individualized service to customers and markets to new customers with a free $50 on first purchase of fresh foods. Delivery fees are also fixed at 3.95 which far undermines the cost of driving, parking and hassle that is involved in grocery shopping in large metropolitan areas. The company also offers limited delivery times, so distribution will not interfere with peak traffic times. Initial customer base was expected to be at or near 100,000 by the end of the first year of operations, and yet the company only reached about 40,000. The company also expected to expand regional services in a two-year period but was unable to do so, and has now chosen a slow growth model. (Pearce & Robinson, 2005, p. 35-1-4) Lastly, FreshDirect demonstrates a strategic advantage in that it employees state of the art facilitates that are controlled from beginning to end by computerized systems that control everything from product recipes (i.e. raw goods delivery) to the heat or cooling system. (Pearce & Robinson, 2005, p. 35-1-4)
Analysis of Data
The major competitors of FreshDirect are brick and mortar supermarkets who offer physical and visual ability of the customer to purchase in many sizes and brands. The emphasis of most grocery stores according to Pearce & Robinson is upon the inclusion of prepackaged goods (25,000) which accounts for 50% of sales, and the remainder fresh products (2,200) which constitutes the other 50% of sales. While FreshDirect relies much more heavily on fresh foods, including meat, produce, seafood, baked goods and coffee (5,000) to generate 75% of it sales and prepackaged goods (3,000) to make up the other 25% of sales. The idea being that people will choose to purchase large quantities of prepackaged goods elsewhere, say monthly and then shop with FreshDirect on a weakly basis, which reduces the number of impulse purchases they make at brick and mortar stores and constitutes what creators believed would be a competitive edge. (Pearce & Robinson, 2005, p. 35-3) the supermarket set constitutes serious competition as the major chains hold an impressive 44.2% of the market for products purchased in such stores. (Pearce & Robinson, 2005, p. 35-5) Other more direct competitors are delivery services who provide similar services to customers as FreshDirect. The main competitors are YourGrocer, Peapod and NetGrocer, as they cover the market area that FreshDirect Serves and offer similar services, yet they all fulfil a bit of a nich market that is very different than FreshDirect. YourGrocer offers bulk orders of prepackaged goods. Peapod Is a partnership with Giant Foods and Stop & Shop, so items are pulled from local store shelves. NetGrocer offers only non-perishable foods. Prices at FreshDirect are also lower comparatively on many items as the middle man, especially on fresh products is eliminated. (Pearce & Robinson, 2005, p. 35-9) This emphasis on niche marketing gives FreshDirect a competitive advantage as it creates a novel market for consumers specifically seeking fresh and custom purchases, but does not directly compete with as many stores. Another recent trend that may affect FreshDirect is the online market creations by existing brick and mortar stores, such as Safeway, Albertson’s and now Wal-Mart. (LeClair, 2002, NP) the business model of FreshDirect seems to match the existing consumer desire for goods, as is seen in the following table, as FresDirect offers more food than any other product and only limited amounts of secondary and branded prepackaged goods.
Table 2: Groceries Purchased Online
Source: Food Marketing Institute, 2000.
Most Popular Grocery Category Purchased Online
Health and beauty care
Vitamins, herbal remedies and beauty aids
Kempiak & Fox, July 2006, NP)
An additional table offers other pertinent information comparisons regarding niche marketing differences as they compare to long established deliver/shipping companies that have online presence. (Johnson, Killgallon & Lockart, 2000, p. 2)
FreshDirect will likely remain a strong competitor regionally, as long as marketing stays strong and interest in the niche of fresh customized choices for those who wish to shop less frequently in grocery stores. The regional market of NYC is a strong market for FreshDirect as the hassle surrounding shopping can be significant as can the time resources that are demanded from it.
Strengths: consumer direct distribution, high quality ratings and standards, innovative marketing plan, strong leadership, fundamentally strong expert teams of employees,(Gonzales, September 28, 2007, NP) high quality in warehouse environments that regulate conditions (unlike retail), customization of products offered to customers. Weakness: Employee friction based on unionization controversy, high cost of production and quality standards,
Opportunities: slow steady growth, marketing to broader users, expanded web awareness and use, employee re-motivation
Threats: competition with established brick and mortar stores (i.e. more brands and product sizes) establishing competitive markets, brick and mortar expansion, increased fuel prices and domino effect on goods, emerging competitors
Analysis of Key Strategic Issues
The key strategic issues for FreshDirect are to build and maintain customer base through quality and niche (fresh food) delivery service. Retain a competitive advantage over brick and mortar stores, who are now providing delivery services and online ordering through special considerations made to quality control and development of more brand recognition. The warehouse system has not worked for all online grocers but the middle man loss associated with the business plan of FreshDirect is clearly a manner that costs can be reduced and profit margins can remain higher than the traditionally bulk low margin model of grocery products. Brand expansion may be something FreshDirect chooses to do, but this must be limited to items that meet their strict requirements and show heavy sales in other online order and delivery systems. Problems they are experiencing with employment may actually increase sales as a result of greater awareness of the service, though it can also create a serious backlash in an environment where fair employment practices have become a mainstay of the community consciousness. From this situation they may gain an opportunity to rework employment though there will be a serious cost associated with replacing the workers that have left.
The most important recommendation for this company would be to do a very thorough damage control campaign regarding the employment situation and maintain quality in the process. This market is precarious, as has been seen by the several early failures in the online grocery game and losses must be kept to the minimum while convenience marketing continues to be a key to success. The target should be to maintain customer base, fight attrition caused by the one time $50 dollar offer and/or the employment fairness situation.
Post Audit Analysis
Employee auditing is essential as each retained employee must have an understandable job description that is known to management and new employees must understand their role as well. There is not question that this company will remain in business but a good exit strategy would be to build partnership connections with other retail outlets for distribution of FreshDirect brand products and possibly build a consultation service to assist other market players in developing the quality systems that FreshDirect has maintained.
Gonzales, J. September 28, 2007, FreshDirect Takes Heat, Workers Try to Unionize, NYDailyNews.com, Retrieved January 25, 2008 at http://www.nydailynews.com/news/2007/09/28/2007-09-28_freshdirect_takes_heat_workers_try_to_un.html
Johnson, R.R. Killgallon, L. & Lockart, K. 2000, Online Grocery: How the Internet is Changing the Grocery Industry. University of Virginia Press, 1-11, Retrieved January 20, 2008 at http://faculty.darden.virginia.edu/gbus885-00/Documents/OnlineGrocery_8-25.pdf
Kempiak, M. & Fox, M.A. (July 2006) Online Grocery Shopping: Consumer Motives, Concerns, and Business Models First Monday Journal Retrieved, January 17, 2008 form: http://www.firstmonday.org/issues/issue7_9/fox/index.html#f4
Kummer, C. (2006, July/August). Deliverance: The Future of Shopping for Fresh Fruits and Vegetables. The Atlantic Monthly, 298, 152.
LeClair, J. (August 6, 2002), the Rebirth of the Online Grocery e-commerce times Retrieved, January 17, 2008 form:
Pearce, J.A. & Robinson, R.B. (2005) Strategic Management: Formulation, Implimentation and Control Ninth Edition. New York: McGraw-Hill Irwin.
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
There is a very low likelihood that you won’t like the paper.
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more