FreshDirect in NYC

FreshDirect faces a few strategic issues and problems in the expansion and development of their made to order grocery delivery system. While the company focused its efforts on cost reduction through its centralized warehouse and producing efficiency as a core competency in the fresh grocery delivery market, key competition, excessive waste, and negative public relations exposure all deal FreshDirect a problematic hand.

One of the largest strategic obstacles for FreshDirect is the negative publicity it currently endures. Although the company is taking steps to align itself in a positive light, fallout from negligent practices have ultimately hurt the company's ability to thrive in a community based environment. Customer perception starts to become a key factor in competitive staying power as the market matures, and with over 10 years of market maturity, this started to become a factor. Negative perception and publicity of FreshDirect largely stemmed from public awareness of its negative environmental impact.

Firstly, the conveyer packing system forced FreshDirect to use an excess quantity of cardboard boxes. Without a strategic and well thought out packaging return system, FreshDirect was seen as a squanderer of precious paper products.

Second, the oversized and often times under stocked delivery trucks that congested New York streets were of concern not only for local residents but worldwide citizens as well. The trucks could be easily replaced with energy efficient, smaller, hybrid powered trucks but were nevertheless larger, more dirty, and smog producting trucks that negatively affected the chemical makeup of the local air and globally impacted global warming reduction efforts.

Finally, negative publicity and protest against FreshDirect came from their impact on local businesses (i.e. grocers in neighborhoods) and how they could undersell and eventually breakdown these community landmarks. These local industries provide safety, foot traffic, and physical interaction in neighborhoods.

FreshDirect has only taken only to rectify the latter of the above causes for the overall strategic planning issue of negative publicity. Even in this case they have not totally cured the problem at hand, but instead are starting to contribute to local economies by sourcing their stock from local and organic farmers. On the other causal factors, FreshDirect has neglected to address them. The packaging and delivery trucks remain to be detrimental requirements of FreshDirect’s continued operation and thus prove to pose a serious risk in an industry that is centered upon responsible and clean reputations.