Freshdirect
1. Is Fresh Direct diversified? Explain. If so, which corporate strategy is the company following? Explain in detail. (20 points)
At this moment in time I believe the FreshDirect is not diversified. At first glance it would seem that FreshDirect is diversify because they have cut the middleman and they have gone straight to the source for their perishable and packaged goods. Making that procedure look like it’s a vertical integration strategy but in reality is not. It cannot be a vertical integration because the meaning of it is to cut cost by not having to do any type of contract costs and basically supplying yourself by manufacturing your own supplies in house. So as though FreshDirect did cut its costs by getting rid of the middleman, they still have to negotiate contract with the farmers and producers and runs the risk of not getting their supplies when needed. Also there is no pooled negotiating power strategy because FreshDirect has not acquired or merged with any farmers or producers business. FreshDirect is not any type of partnership or cooperation with any of its rivals. It is its own entity, and it’s doing their business their way. Overall just looking at FreshDirect and the products they offer one can see that there is no diversification in their business. They only offer two types of goods, which are perishable and packaged goods. If they were a well-diversified business they would probably offer more products that regular retail groceries stores offer. Things like school and office items, everyday items such as magazines, and other thing like that in general. FreshDirect has obviously positioned them selves to concentrate only the grocery items and delivering at a lower cost to its customers in the New York area. Which also shows that FreshDirect is only tied to one region of the country. It has not diversified itself geographically to other parts of the country as its competitors have. So overall as stated before, FreshDirect...
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