Question

A major threat to the FreshDirect model is:

a.brick and mortar big box stores offering larger selections
b.smaller grocery stores entering the online grocer market
c.people using meal delivery services more frequently
d.more bulk warehouses opening in the region
e.potential entry of better-funded, growth-seeking rivals

Answer 1

Better-funded, growth-seeking rivals pose a major threat to FreshDirect, as they could use their resources to offer competitive prices and discount shipping, similar to Amazon's successful model. The FTC's focus on real competition rather than market share further emphasizes the competitive market challenges FreshDirect faces.

Step-by-step explanation:

The major threats to the FreshDirect model include the potential entry of better-funded, growth-seeking rivals, as such competitors could leverage their economic resources and market presence to overpower FreshDirect. Companies like Amazon have been successful due to an efficient production model and cost structure that allows them to offer lower prices, even when including shipping costs.

As the Federal Trade Commission shifts its focus from market share to actual competition, the threat of these well-established and resourceful rivals entering the online grocery market poses a significant challenge to FreshDirect's business model. Furthermore, this shift in focus to actual competition underscores the dynamic and competitive environment in which firms operate, which includes various types of retailers from big box stores to small corner delis.