BUSI 400 Case Study FreshDirect Answers

Case Exercise: FreshDirect

The following questions are based on key symptoms (both favorable and unfavorable) of FreshDirect and underlying causes that affect key symptoms as they are observed in the case. In addition, there is a general question on solutions that also addresses the causes. Each multiple choice and short answer question number under Key Symptoms corresponds to the same question number under Underlying Causes (e.g., Question 3 under Key Symptoms 1 corresponds to Question 3 under Underlying Causes 1).

Before beginning this exercise, you will need to read the FreshDirect case.

Case Study: FreshDirect

 

Key Symptoms 1
Please answer the following multiple choice questions.

1. Customers had to rely on FreshDirect to select the food for them. How appealing was this arrangement to customers?

multiple choice 1

• This did not appeal to some customers.
• This did not appeal to most customers.
• This appealed to all customers.
• Mixed up deliveries was a much bigger concern than this.
• None of the answers are correct.

2. How did the community group South Bronx United react to FreshDirect’s move from Long Island City to the Bronx?

multiple choice 2

• filed a complaint to the mayor’s office
• threatened to file a lawsuit
• organized protesters to march and show opposition to such a      move
• filed a lawsuit expressing concerns of air and noise      pollution
• None of the answers are correct.

3. Where did FreshDirect consider relocating its operational hub and headquarters?

multiple choice 3

• Connecticut
• New Jersey
• Staten Island
• Long Island
• Rhode Island

4. How did FreshDirect deliver to customers in urban areas?

multiple choice 4

• home delivery service with a prespecified two-hour deliver      window
• parking lot pickup
• stadium pickup
• bus or Train station pickup
• All of the answers are correct.

5. According to the case, who were the potential competitors in the online grocery business?

multiple choice 5

• Jet.com, owned by Walmart
• Whole Foods, owned by Amazon.com
• traditional offline groceries that could add an online      platform to sell groceries as well
• Royal Ahold of the Netherlands
• All of the answers are      correct.

Underlying Causes 1

Please answer the following multiple choice questions.

1. Why were some customers not happy about FreshDirect selecting the food for them?

multiple choice 1

• Competing online groceries gave customers the chance to feel      and choose the products themselves.
• Live video of FreshDirect’s physical site allowed premium      members to access the view of the food they were selecting.
• Live connection with a FreshDirect shopper helped online      shoppers to have both audio and video feedback of the products they were      buying.
• Online shopping did not give customers the chance to feel and      choose the products themselves.
• None of the answers are correct.

2. Why did the community group South Bronx United challenge FreshDirect’s move from Long Island City to the Bronx?

multiple choice 2

• animal cruelty
• toxic chemical release
• air and noise pollution from a truck intensive business
• additional competition for small mom-and-pop groceries in the      Bronx
• All of the answers are correct.

3. How did FreshDirect’s sales mix contribute their success?

multiple choice 3

• Selling a mix of 75% fresh produce reminded customers why      they chose the company.
• Higher margins could be obtained selling a higher percentage      of fresh products valued by their target market.
• FreshDirect’s customers are also Costco customers, and      selling fresh avoids competition with Costco.
• The sales mix does not matter; what matters is volume of      sales.
• None of the answers are correct.

4. Why were urban dwellers more attracted to FreshDirect’s home delivery?

multiple choice 4

• to eliminate the need to carry groceries for possibly a      substantial distance from the closest grocery store
• to avoid the uncertainty of finding a place to park the car      near their apartments to unload their purchases
• to avoid hauling groceries a much longer distance when      parking can be only found much farther away from their apartments
• All of the answers are correct.
• None of the answers are correct.

5. Why were traditional grocery stores viewed as key potential competitors?

multiple choice 5

• Traditional grocery stores could easily pick items from the      shelves of existing stores within the grocer’s chain.
• Traditional grocery stores could build special warehouses      dedicated to online orders in any neighborhood.
• Traditional grocery stores could easily strike a joint      venture with an online retailer business and engage in online grocery      business.
• Traditional grocery stores would be eligible for tax      abatements if they showed lesser environmental impact from their      conversion to an online grocery business model.
• None of the answers are      correct.

Please answer the following short essay question. Note: Your instructor will need to manually grade these questions.

1. What realistic solutions can FreshDirect implement to withstand the competition it faces from both traditional grocery stores (including Whole Foods and Trader Joe’s) and other online grocery stores? How do these solutions fit into the current actions of the company?