Fresh Direct case study

 Fresh Direct case study

 Fresh Direct is the name of a company that allows people to order food online on the delivery of the following day. Their website is freshdirect.com, and the name of their industry is food and grocery. This company has its motto that says,” our food is fresh.” The customer does their orders through the website, and they can receive their food by the next day. They deliver the best food at the best price just as their customers want and give to the satisfaction of their customers. This company aims to ease the customers the time of going to the grocery to buy food. Instead, they can order the menu online and get them at 100% satisfaction without any struggle and have it delivered at the doorstep.

The leading players in this company are Joseph Fedele and Jason Ackerman, who launched the industry back in the year 2001. Many other companies dealing with the same have fallen, but the Fresh direct is proud to be still in service. The only thing that affected the industry is the rise of competition that came along with other companies. This is the reason why they started dealing with organic and locally grown stuff. All in all, some fields could not be competed with. The current CEO is David Mclnerney. A report shows that Americans spent an estimate of$ 48.90 for about ten persons for a thanksgiving meal in the last year. American Bureau Federation gave this report. The Industry experts, however, predict that the price can go up to $ 50 due to the particular items demand. The company is performing well although, for the sake of vegetarians, the orders have shown a reduced rate of meat orders, especially chicken. http://finance.yahoo.com

Through the use of smartphones, the online market is getting flooded every other day, which is becoming a challenge and a source of disruption to the fresh direct company. The company is facing massive competition from Wal- Mart stores that genets the sale of food as half of the business. Stop and shop giant food stores that have been in operation even before fresh direct, have given the company a vast competition. The online grocery has faced testing from markets such as Colorado, phoenix, Jose, Alabama, and many others. Other giants like Google and Amazon are also vying for online food business, which is another source of competition for the fresh direct company.

More so, the most richly valued start-up in the united states announced that it was introducing food services in Chicago and new york that was aimed at delivering meals to customers within just ten minutes or even less. This was another competition directed to the fresh direct company bearing in mind that it offers in the following day and more so in the same new york city. Another challenge is that fresh direct lacks a feature of fresh day delivery that both Instarcart and Amazon fresh do possess.

Competitive threats did accelerate, especially when Google announced that it did partner with six delivery food service. This means that Google had extended its market, which includes the territories served by the fresh direct. This made it easier for the customers to use Google by searching for order take-out or delivery from the restaurants of choice and placing their orders at their convenience time and location. Google did state that it was planning to deliver more food services to the customers.

The effect of this stiff competition is on the fee and the type of food. This is to say that whoever has a better choice with a more fair price and faster delivery, will have the advantage of the competitive edge. Thus fresh direct has to have prices that match with that of Amazon and also deliver at high speed. This means fresh direct will be forced to make the prices even lower than those of the Amazon to stay in the game. In such competition, there is the threat of substitute products; the company is required to have a variety of products that are related so that the customers can take the substitute of what they would want if in case it was not there. It also means that the company that has got the advantage of the substitute products will outsmart others in terms of sales.

More so, in such a competitive field, there will always be a rivalry between companies because in case the company incurs losses. Then the thinking will be that the other company took its customers.  The bargaining power of suppliers and the customers will increase, thus lowering the overall profit. The customers will always be requested to be sold food at a lower price in order not to shift to the other companies.

To create a competitive advantage,  fresh direct had to come up with a strategy that would ensure they remained in the market as well as making a profit even with the challenge of competition from the other companies. One of these strategies is the operation strategy. By this strategy, the fresh direct has eliminated the middlemen to enable a more efficient supply chain. The internet serves as a paramount tool to achieve efficiencies of operation in the service of customers that are of the target. This strategy also ensures that the traditional model of grocery that gives a wide variety to the consumers that are diversely populated. They offer basic staples of high quality. Their primary focus is the product whereby they provide top quality products at a lower price to outsmart others in the online food market. More so, their margins are higher compared to those of their competitors, making them gain more in the supply chain and have more significant sales in the goods that are perishable.

Another strategy that the fresh direct have used to gain a competitive advantage is the entrepreneurial strategy. This is where they seize the available opportunities for the benefits of their business. It is all about capturing the opportunities where others don’t seem to see any. The fresh direct have come up with a home delivery business model. They do deliver food products to people’s homes, and the strategy has been doing so well. The way this model works in such a way where a grocery store can carry 25000 different packages of products of food, which do generate sales of about 50%. The deal also makes 2200 perishable food the likes of meat and seafood products that create the remaining 50 percent.

The customers’ orders are delivered by midnight by the use of the internet. This strategy has made the company successful in dealing with competition in the market. This has enabled the industry to keep on operating in the field over the years. Other companies can use this strategy to thrive in business. The life cycle in the industry affects period to make it keep on improving, according to the needs of the company. The strategy cannot be static but it keeps on changing.

Leadership strategy.

This refers to the ability of the manager to express a vision that is strategic to the organization and be able to persuade others to see that vision. It is the ability to influence the organizational members and, more so, influence change in an organization. The main objective of strategic leadership is productivity. This strategy can be used in a new direct company to increase the productivity of food sales. This strategy would encourage the employees to follow their ideas in ensuring that the organization maximizes its profit in the overall sales.

Related diversification

This is a strategy that a company uses to expand its existing line of production. The company may start manufacturing new products or venture into new markets.  The fresh direct company could use this strategy to come up with new products that are not in the market to make them more competitive than the others. In this way, the company could venture into new territories where its rivals have not reached and have a broader market. This will result in more profit-making and leave the industry in operation for a more extended period.

If I were in a position to advise this company, I would recommend it to use related diversification. This is because this is the strategy that would make the current direct company yield more benefits and remain competitive in the field. By venturing into a new area, then there will be more new customers who would buy the food more, making the company accumulate huge profits. New territories also mean a broader market and more sales of the food products. In all the places, people are always consuming foodstuff, and extending the market would be a brilliant idea. The company should first involve the team, list the actions, set timeline, design the resources, establish a follow-up process, communicate the plan and then keep the project alive for the well-being of the business.

This case study is very relevant to a person who wishes to venture into the business field. Many lessons can be drawn from the whole research and the operation of the company. Firstly it is good to note that there will always be competition in the business field. The only way that any business will survive is by coming up with the necessary strategies and survival tactics that will give a company a competitive advantage in the field of marketing. Secondly, it is always good to look at the sales and output more so the input of the business to check whether the company is making a profit. Lastly, the customer’s service and the quality of the products should be that goal of any business to remain in operation for a long time.