FINAL EXAM
Competition and Strategy
Spring 2007
FreshDirect has recently employed you as a consultant to evaluate the attractiveness of the online grocery segment in the retail grocery industry. At your request you have been given access to information compiled by previous consultants, Alan Eisner and Keeley Townsend (this is the case information which was distributed to your via e-mail on 4/23/07).
You have just received word that the “Executive Management Team” (EMT) will be meeting at 2:00 pm on Friday, April 27 and they are interested in your thoughts regarding this segment of the industry (the expectation is that your insight will be based on the information provided you from the previous consultant as well as any external research you are able to compile). Although you will not be able to meet with the group, they have asked you to prepare a written report addressing five (5) specific areas of question. This report is due no later than 10:00 am on the 27th and must be submitted electronically to jmbuck@anderson.edu.
The “EMT” would like you to thoroughly address the five (5) areas individually and to the best of your ability, using graphs, charts, tables, etc. as appropriate.
The areas of question you need to address are as follows:
1) What are the defining business and economic characteristics of the online grocery segment of the retail grocery industry (i.e., market size, market growth rate, segmentation, entry/exit barriers, scope of rivalry, scale of economies)?
2) What is competition like in the online grocery segment? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants?
3) How is the online grocery business changing? What are the underlying drivers of change and how might those driving forces individually or collectively change competition in the industry?
4) What does a strategic group map of the online grocery business look like? What are your thoughts regarding FreshDirect’s position?
5) What key factors determine the success in this industry segment?