week 3 case study
Week 3 Case Study Report
Background/History
Fresh Direct is an online grocery launched in 2001 that offers shopping and delivery services to around 300 zip codes in the tri state area of New York (www.freshdirect.com). The current CEO of Fresh Direct is Mr. Jason Ackerman, who is also a cofounder of the firm, whilst the chairman is Jim Manzi. Fresh Direct serves over 600,000 customers, and in 2010 it claimed revenues of more than $250 million, representing an increase of $20 million from the previous year (Bloomberg BusinessWeek, 2012).
Fresh Direct has had many ups and downs. It had initially set up a goal of getting a hold of 5% of the grocery market in New York, but they were not able to do this till 2011, only after having expanded to other states and the greater part of New York. In 2007, workers at company wanted to unionize due to low wages and an immigration audit later on in the year led to mass resignations from workers, and the workforce was reduced to almost half. However, in the midst of all these challenges Fresh Direct was able to develop their 4 minute meal line which greatly boosted sales (Chatterjee & Laseter, 2004).
SWOT Analysis
Strengths
• Convenience is their greatest attribute, by selling and delivering grocery products online. • Fresh Direct does not paying high rent to store their products, eliminating the middleman. • Advanced product inventory software. • Reputable brand name.
Weaknesses
• High CEO turnover. •Customers want to be able to see touch and smell their products before they buy them. • Slow expansion and company growth. • Only serve selected zip codes areas
Opportunities
• Potential expansion to other areas. • Customer rating of products • FreshDirect increase sales of organic foods. • Smartphone apps to order food
Threats
•High parking fines in NYC. •High rise of gas prices. • High levels of traffic congestion. • Competition from other local grocery stores and online services such
Background/History
Fresh Direct is an online grocery launched in 2001 that offers shopping and delivery services to around 300 zip codes in the tri state area of New York (www.freshdirect.com). The current CEO of Fresh Direct is Mr. Jason Ackerman, who is also a cofounder of the firm, whilst the chairman is Jim Manzi. Fresh Direct serves over 600,000 customers, and in 2010 it claimed revenues of more than $250 million, representing an increase of $20 million from the previous year (Bloomberg BusinessWeek, 2012).
Fresh Direct has had many ups and downs. It had initially set up a goal of getting a hold of 5% of the grocery market in New York, but they were not able to do this till 2011, only after having expanded to other states and the greater part of New York. In 2007, workers at company wanted to unionize due to low wages and an immigration audit later on in the year led to mass resignations from workers, and the workforce was reduced to almost half. However, in the midst of all these challenges Fresh Direct was able to develop their 4 minute meal line which greatly boosted sales (Chatterjee & Laseter, 2004).
SWOT Analysis
Strengths
• Convenience is their greatest attribute, by selling and delivering grocery products online. • Fresh Direct does not paying high rent to store their products, eliminating the middleman. • Advanced product inventory software. • Reputable brand name.
Weaknesses
• High CEO turnover. •Customers want to be able to see touch and smell their products before they buy them. • Slow expansion and company growth. • Only serve selected zip codes areas
Opportunities
• Potential expansion to other areas. • Customer rating of products • FreshDirect increase sales of organic foods. • Smartphone apps to order food
Threats
•High parking fines in NYC. •High rise of gas prices. • High levels of traffic congestion. • Competition from other local grocery stores and online services such