Fresh Direct Case Study Report

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COMPANY NAME/WEBSITE/INDUSTRY FreshDirect, www.freshdirect.com, online grocer BACKGROUND/HISTORY Jason Ackerman and Joseph Fedele cofounded FreshDirect in 2001, not long after other online grocers had failed. Less than three years later, its iconic refrigerated trucks could be seen all over the Manhattan streets. “Ackerman and Fedele split up the responsibilities based on their expertise. In that Bloomberg interview, Ackerman said, ‘Joe, having worked at -- and built -- Fairway was responsible for bringing in all of the supply. And I focused on how to actually take all the supply and get it within the warehouse and actually get it to the customer, which was no small feat’” (Goldberg, 2010). The idea behind the company is to give consumers the freshest food possible by getting food directly from the producers. FreshDirect allows customers to place orders online, then it prepares the foods at its processing center in Long Island City and it is delivered during a prearranged time that day. Though it has had at least 5 different CEOs since it was founded, as of May 2011 the current CEO of FreshDirect is Jason Ackerman. SWOT ANALYSIS Strengths • It has a wide selection of low price items with high quality. • It uses an advanced software system to manage production. • Strong relationships with local growers and distributors. • A warehouse close to its customer base that has 12 separate temperature zones. • Extremely high standards for health, safety, and cleanliness. Weaknesses • Limited offering of nonperishable products. • Small sales area, focusing on selected zips codes in and around New York. • Slow to diversify into packaged and nonperishable products. • Senior management has changed many times (at least 5). Opportunities • Reputable brand name and customer loyalty increase business through word-of-mouth advertising. • May expand local

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