14 Questions
What is a key reason why earlier online grocery efforts failed?
Unwillingness of customers to entrust someone else to pick their produce
What is a significant advantage provided by FreshDirect using technology?
Farm-to-table freshness
What does the concept of 'product-market fit' convey?
The degree to which a product satisfies market demand
Why were most customers initially fine with the conventional way of shopping for groceries?
Unwillingness to entrust someone else to pick their produce
What played a role in strengthening the key resources for competitive advantage for FreshDirect?
Efficient supply chain
Why did the online grocery business initially fail?
Lack of product-market fit
What is one of the advantages of using FreshDirect according to the text?
Availability of one-click recipes
What is the main focus of FreshDirect's product mix as mentioned in the text?
Heavy on fresh produce
How does FreshDirect's inventory turnover compare to traditional grocers?
197 times a year versus 40 times a year for traditional grocers
What allows FreshDirect to benefit from additional delivery savings?
Scale and use of recycled biodiesel fuel
What does the high efficiency of worker shifts lead to for FreshDirect?
60 percent lower labor costs
What contributes to FreshDirect's success in retaining customers according to the text?
Re-creating orders at a rival site represents another switching cost
What does the FreshDirect model allow the firm to build?
A data asset used for product recommendations and marketing campaigns
What helps FreshDirect crush costs that plague traditional grocers?
Highly efficient worker shifts and lower labor costs
Study Notes
Online Grocery Failures
- Early online grocery efforts failed due to inadequate logistics and inefficient supply chains.
FreshDirect's Advantages
- FreshDirect's technology enables efficient order fulfillment, leading to cost savings and competitiveness.
- FreshDirect's model allows for building strong customer relationships and retaining customers.
- High efficiency of worker shifts leads to increased productivity and lower labor costs.
- FreshDirect's route optimization technology enables additional delivery savings.
Product-Market Fit
- Product-market fit refers to the alignment of a product's features with the needs of a specific market.
Traditional Grocery Shopping
- Most customers initially preferred traditional grocery shopping due to habit and familiarity.
Competitive Advantage
- Strong relationships with suppliers and high-volume purchasing played a key role in strengthening FreshDirect's key resources for competitive advantage.
Online Grocery Challenges
- The online grocery business initially failed due to difficulties in achieving efficient logistics and supply chains.
FreshDirect Benefits
- One of the advantages of using FreshDirect is increased convenience and time-saving.
Product Mix
- The main focus of FreshDirect's product mix is on high-quality, fresh produce and meat products.
Inventory Turnover
- FreshDirect's inventory turnover is faster than traditional grocers, reducing waste and costs.
Cost Savings
- FreshDirect's efficient supply chain and logistics help the firm crush costs that plague traditional grocers.
Test your understanding of why earlier online grocery efforts failed and how FreshDirect succeeded, the key resources for competitive advantage offered by technology, product-market fit, and the role of time in strengthening these resources.
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