Fresh Direct Case Study
Sales of such things as fruits, vegetables, seafood, prepared entrees and sides, coffee, meat products, Dell and Hess 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 some 600,000 customers or more, making over 45,000 deliveries per week in the greater New York City metropolitan area.
Typical neighborhoods it serves; Manhattan, Brooklyn, Riverside, Queens, Staten Island, Connecticut, Long Island, New Jersey, and Westchester County. Proud of Its motto concerning the company, it states, “Our Food is fresh, our customers are spoiled…..
Order on the web today and get next-day delivery of the best food at the best price, exactly the way you want It with 100% attestation guaranteed. ” With a solid commitment to customer service, Freeholders has solidified its presence in the online grocery business, partly through its partnership with farmers and artisans. Having this direct partnership allows the company to maintain strict quality control over the products offered to customers. As with many ventures, however, there were bumps In the road, with the company recovering much of Its losses after an Immigration audit, creating a crisis In 2007.
The company has managed to weather those storms to remain a viable online grocery store.
In addition, Freeholders hopes to extend its services to low-income customers. With that, the company is looking at expanding its customer base to include customers who receive SNAP, a program designed to help eligible families in need. Freeholders is working the U.S.Department of Agriculture to Implement a program to accept Electronic Benefits Transfer as online payments.
All of this, after years of not turning a profit until 2008; going from a net operating loss of 3.0 Million dollars in 2003, until now, where the company is valued at some 350 million dollars. Pretty good, considering the company was started less than ten years earlier, and weathering a federal audit in 2007.
Strengths: Freeholders has strong financial assets. Friendliest Is powerful online grocery Drain; reputation AT low price Walt null quality.
Freeholders uses an advanced food technology software system. Freeholders has strong relationships with local stores and its distributors. Freeholders approach is very innovative; its products have differentiation from rivals. Freeholders have excellent customer services. Freeholders warehouse has 12 temperature zones, ensuring constant temperatures. Freeholders has extremely high standard for cleanliness, health and safety.
Freeholders has refrigerated trucks that keep their foods fresh. Weaknesses: Freeholders sold perishables, not listening to customers demanding non- perishables. They are only focusing on selected zip codes around New York Freeholders is dependent on its main competitive advantage. Constantly changing leaders, they are now on their 4th CEO of the company. Expensive start-up costs.
Opportunities: Freeholders has reputable brand name, and loyal customer base. Freeholders can expand their business locally, nationally or internationally. Freeholders may also start delivery of non-perishable products along with its popular perishable products.
Freeholders could merge with, or form strategic partnership to sell overseas. Environmentally safe packaging and delivery methods. Threats: Whole Foods, Austin, Texas based supermarket chain with the organic health food. Trader JDK another specialty food retailer opening a store in downtown union square. Yourself, created with a bulk-buying strategy.
Another big threat for Freeholders; in early 2007, NYC government proposed ingestion 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 Freeholders. Freeholders visible cardboard boxes are also an environmental threat. Rivals of Freeholders may adopt the advanced food technology software system.
Analysis via Porter’s Five Forces Model Force
Strength: Threat of New Antidepressant-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. Freeholders is already a known quantity.
Low: Threat of Substituted 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 Superconductivity 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 Freeholders already has good legislations with suppliers and local stores.
Medium: Powers of Buyers the present-day era, the awareness of the on-line consumer is high; they have access to everything by using the Internet, and the ability to analyses the price and quality of Freeholders, and its competitors, and if need-be, change over very easily. They remain a large part of the challenge for Freeholders.
High: Competitive Revolutionary they are advanced in their use of food technology, and are knowledgeable within tenet management expertise, teen are weak on allover moments, especially walkout offering non-perishable food products. The competition has also entered into the arena with cost-savings, by offering items in bulk, and making more non-perishable products available to the consumer.
This goes with any company doing business, to constantly monitor competition, and stay cutting edge, offering non tangible qualities to the mix that their customers demand. It’s the cost of doing business.
Medium: Strategy Used How does this company create and sustain a competitive advantage? What strategy was undertaken by this company? Were they successful? Can all companies use this strategy? How is the strategy affected by the life cycle in the industry? Freeholders current generating strategy is low price, with differentiations, and high quality, focusing on perishable products; and delivers its product direct, to the customer window in selected areas.
Freeholders prices remain low, and they maintain better quality over their rivals. Freeholders has established a well-known name brand among consumers, and constantly strive to meet customers’ needs as well as demands. The Freeholders industry life cycle is a positive because they have been very innovative regarding advance food technology, and their customers are very loyal.
According to Porter’s Generic Strategy, the three strategies are overall cost of leadership, differentiations and focus. We may adopt these strategies to get better read on the Freeholders approach.
As to overall cost leadership, Freeholders reduces its management staff by using a De-layering policy; that of cutting out the middle man; concentrating on maintaining high quality with low prices. Freeholders delivered effective training, and coaching to the staff, resulting in better results, with equally better quality production, and meeting time constraints. In terms of differentiation, its brand is unique among its customers. The management and production staff is highly expert regarding their tasks, and its online website is innovative, designed to be attractive to its customers.
In terms of focus, Freeholders has concentrated on a specific clientele, maintaining a close relationship with the consumer, and delivering the product they expect. In large part, using these strategies has made Freeholders a success among its industry rivals. Whether or not this model would fit other companies depends on the industry, but the overall strategy behind Porter’s concept should suit almost any company in business. Whatever the company, their business strategy should attempt to identify a set of working, business, global and corporate strategies that would best enable it to gain a competitive advantage over its rivals.
The Issues and Challenges Facing This Company
Can the company’s competitive advantage be sustained? How will that be accomplished? Where are they in the product life cycle? What is the company culture like? Do they need to change it? What problems are this company having and why? When it comes to maintaining a competitive advantage, that is made more difficult with the introduction of Amazon into the grocery business.
The sheer size of Amazon presents a unique problem for Freeholders, competing with a company that has that kind of buying power. If anything is in their corner, it would be customer loyalty and name brand recognition.
As to company culture, they resemble Amazon in that quality customer service Is a must. As to ten product Tie cycle at Friendliest, t company utilizes good marketing and research skills to both anticipate and shelve products that no longer move well. Opinion What do you think of this case study? Describe what you believe are the lessons learned from this case. Well, first of all, I have never done anything quite like this reject, let alone a case study.
I think doing a case study can be a valuable tool in assessing a company’s worth, its problems, its failings, and its potential.