FreshDirect: Is it Really Fresh? Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Resource Based Analysis

The resource based view for FreshDirect are basically of great value to the company. The tangible resources available for the company is the ability to acquire and generate money through investors as the company was able to generate an amount of $100 million initially. Along with this, the company has created a state of the art production facility which fulfills the needs of production process and distinctive functions which again make sure of the customers’ satisfaction. These attributes of the company make it distinctive, which is difficult to imitate and hence results in a company having a competitive advantage over rival companies. Make to order goods again makes it a company that stands out above the rest of the online grocery store industry players and keeps the losses to a minimum.

Business Level Strategy

The business level strategy of FreshDirect is Differentiation. The company offers high quality, innovative products with various options to choose from. The differentiation which FreshDirect creates is that it offers “make to order” goods which are specifically for a customer who orders the item. The company also eliminates the factor of middleman by purchasing goods directly from the farmers to ensure premium quality. Along with this, FreshDirect also offers a differentiated operational strategy where the customer has an option to choose the cut they desire to purchase of the meat they order. This is a unique function of the organization, which is the only alternative way for consumers other than supermarkets. The company maintains all its operations through the SAP software which is till now not a part of any of its competitor industries. Along with this, FreshDirect differentiates itself by offering Next day delivery to their customers, and ensure that the items are delivered on time as per the commitment. The number of food items included in the company’s profile is also the maximum, i.e. around 3000 items of different grocery goods. Therefore, it can be verified that the business level or the generic strategy of FreshDirect is differentiation.

Diversification efforts-M&A, alliances

The company FreshDirect has been able to compete in the online grocery industry with the unique business model. The company does not rely on outsiders and it does not participate in any kind of merger or acquisition strategy because of the fact that the company offers a different business strategy that none of the competitors in the industry follows. They tend to focus on developing internal strengths by generating revenues through investors who are willing to put in their money in FreshDirect because of the successful business model it offers to the customers. The company has been able to manage all its different departments internally without merger and acquisition or even by acquiring a smaller retail grocery store in the industry.

Entrepreneurial entry strategy

The entrepreneur or the entry strategy for the company FreshDirect online grocery store is to offer better and improved quality products to its customers. For example, although FreshDirect is a part of the online grocery industry, but the unique business model which makes the company stand ahead of others is the focus on making to order goods i.e. the company makes and delivers the goods as per the demand of the customers. The entry level strategy of FreshDirect is product development. The reason is that although the products offered by FreshDirect are similar to the other industry offering, but FreshDirect defers because of offering made to order goods. FreshDirect tries to bring in and experiment with new and different items such as bakery goods, confectionery, meat, etc., which means that the company does not solely rely on the similar trends as offered by the other players in the industry. In fact, FreshDirect constantly looks to change and introduce new products that can attract new customers along with retaining ones.

Recommendations

Based on the information provided in the case and the fact that the online grocery industry accounts for a small portion of the overall grocery industry which is a small portion of two percent. This indicates that the industry is highly competitive, but it is a fact that the growth potential in the online retail industry is massive because of the huge number of customers looking to opt for this option while purchasing daily and monthly grocery items and products. As for now, only 2% of the grocery purchases is made online, but still the industry possesses a lot of opportunities for players such as FreshDirect and Peapod....................................

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