FreshDirect: Forget Delivery. Our Business Is All About Food
In early 2016, with more than 600,000 customers and an estimated revenue of $500 million, FreshDirect was among the top three companies in the U.S. online grocery sector. It employed more than 3,000 people, 30% of whom drove trucks and delivered food to the doorsteps of its customers in five states: New York, New Jersey, Connecticut, Delaware and Pennsylvania. Jason Ackerman, CEO of FreshDirect, wondered if the company's current success could be sustained in the future. Competition had intensified drastically in the past few years, with rapid delivery models taking the market by storm. Ackerman knew he had to decide whether his company would follow suit and shift from next-day service to a one-hour delivery model.
Collection: IESE (España)
Ref: SI-194-E
Format: PDF
Number of pages: 16
Publication Date: Apr 7, 2016
What material is included in this case:
Description
In early 2016, with more than 600,000 customers and an estimated revenue of $500 million, FreshDirect was among the top three companies in the U.S. online grocery sector. It employed more than 3,000 people, 30% of whom drove trucks and delivered food to the doorsteps of its customers in five states: New York, New Jersey, Connecticut, Delaware and Pennsylvania. Jason Ackerman, CEO of FreshDirect, wondered if the company's current success could be sustained in the future. Competition had intensified drastically in the past few years, with rapid delivery models taking the market by storm. Ackerman knew he had to decide whether his company would follow suit and shift from next-day service to a one-hour delivery model.
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Year: 2015
Geographic Setting: United States
Learning Objective
This case intends to illustrate how technology-enabled changes may introduce new business opportunities in mature industries. The new entrants define new business models and often develop very different capabilities from those shown by established companies. At the same time, incumbents are obliged to adapt their core business strategies to the evolving technological marketplace.
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