Assessing the Impact of Innovation and External Environment on Ocado Group Plc

This report analyzes the impact of innovation and external environment on Ocado Group Plc, including assessing opportunities and constraints, improving decision-making processes, and ethical implications. It also discusses the benefits of innovation, such as growth and differentiation, and the importance of ethical practices in decision-making. The report concludes with recommendations for managers to align employees and processes for effective decision-making.

Business environment

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Assess the impact of innovation on modern business organisations ..........................................1
Evaluating external environment of chosen organisation for identifying opportunities and
constraints....................................................................................................................................2
Recommendation on improving decision-making process in chosen organisation.....................4
Ethical implications on decision-making in chosen organisation................................................5
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment can be described as a sum total of all extrinsic as well as intrinsic
forces that adversely impact processes of organisations (Appiah-Adu, Okpattah and Amoako,
2018). In order to run a business enterprise successfully, it is needful to access the various
aspects of external and internal environment. Effective environmental practices are beneficial for
organisations in identifying and grabbing opportunities in order to take a first mover advantage
that assists in gaining competitive advantage. It also benefits organisations in tapping and
assembling differential resources for meeting the needs of dynamic market. For better
understanding of business environment and its influence on organisations, Ocado Group Plc. Has
been taken into consideration. Ocado Group Plc is an UK based organisation which provides
technological platform for the global retailers to perform their business activities efficiently.
Company was established in 2000 and has its headquarters at Hatfield, United Kingdom.
This project highlights the understanding of how the organisation are managed and
governed in dynamic business environment. It also investigates external environment and their
constraints on a business. This project also demonstrates the knowledge of influence of decision-
making and ethical implications in business operations.
MAIN BODY
Assess the impact of innovation on modern business organisations
Innovation is the most important aspect for any business to grow and compete in the
competitive market (Cooper, 2017). Innovation is the process which an organisation or
individual undertake to introduce new ideas, processes and new product as well as to approach
current ideas, processes and products in new ways. In recent world of business, various type of
innovation which a business might conduct. These innovation are directly related to business
models, internal processes, workflow or products which affect overall productivity or
profitability of company. The Ocado Group use various innovative ideas, concepts and
technology such as automated robots, warehouses, customer services system, fraud detection
machines and many more to earn higher customer base and market share. These innovative
technology helps them to achieve their goal in dynamic market. The impact of innovation in
relevance to Ocado Group are as follows.
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Innovation helps companies to grow- To grow successfully and more profitable every
business organisation must introduce new innovation and modify their current business policies
or products (Elkington, Burke and Hailes, 2017). Through innovation and modification the
manager of Ocado Group can bring new technology or energy in the organisation which helps
them to increase overall performance of company. By restructuring their organisation policies,
culture they can motivate employees to improve their quality of performance for attracting more
customers in target market. Successful innovation enables the manager to add value to their
product or company to increase the profitability and customer base.
Innovation helps companies to differentiate themselves-Innovation bring differentiation
in companies to compete effectively with competitors in global market (Fuller, Jacobides and
Reeves, 2019). If the manager of Ocado Group bring new innovation in its product or services
like update the design and quality of product to create something new for the customer which
they never experienced before. For this, they make differentiate their product with others to
attract large number of customers and increase their profitability. Also, they use innovation in
their organisation working or process to save time, cost and other resources which give them
competitive benefit over other big organisations as well as they get big market share. By making
various innovation like better quality customer services, Morden technology as automation
robotics and many more the Ocado Group may increase their brand value or sales.
Innovation helps to take benefits of new technology- The manager of Ocado Group
bring new innovation in their organisation by installing new or advance technology to produce
fast or better quality of goods and services. Such as fraud detecting machines or analytical data
which allows them to solve problems during the production process or improve the performance
of employees to produce best quality of product and services to fulfil the expectation of
customers. Advance technology provide benefits to company to produce fast and high standard
product as per the consumer demand or trends which leads to the company gain high competitive
advantage over their competitors to get maximum profitability.
Evaluating external environment of chosen organisation for identifying opportunities and
constraints
It is desirable for organisations to assess their external environment in order to scan
varied opportunities for grabbing as well as constraints for mitigating them. Establishments
extensively perform PESTLE analysis is used for identifying varied opportunities in order to
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frame effective policies as well as strategies. PESTLE analysis can be described as a framework
that is helpful for identification and evaluation of varied forces or factors that influence intrinsic
business operations (TGriffin, 2021). It is beneficial for Ocado Group Plc as it helps them to
plan their operations strategically to secure competitive advantage over their competitors. Three
forces of PESTLE analysis in relevance with Ocado Group Plc are discussed below: Economic factors encompasses of varied aspects in relation to rising GDP, inflation rates
and impact of demand and supply on a specific product on economy of a country (Julien,
2018). Economic factors are uncertain in nature and impact businesses adversely. Global
pandemic due to corona has affected UK economy and forces it towards downward lane.
Global pandemic has compelled companies to close down their operations which led
them to face huge losses and has to terminate their large workforce as they are not in a
position to pay them. Also, migrants from different countries who were working in UK
has left their job and move to their home country. This led to increase in unemployment
rate and also lowers the purchasing power of people which has changed their spending
patterns. In relation to Ocado Group Plc., people have change their patterns to buy
groceries through digital means. This is an opportunity for Ocado Group Plc as they
provide digital platform for their customers for procuring groceries. It is the right time for
organisation to influence customers to use digital platforms for purchasing their
groceries. However, global pandemic has left people with less income and they want to
save for their future but they are provided with excellent digital technology for easy
purchase of their groceries. Socio-cultural factors essentially comprises of variations made in customer preferences
and tastes as well as size of population of a specified country (Nguyen and Harrison,
2019). It also encompasses differential attitudes and perceptions of citizens of a nation in
relation to specific product or service. Covid pandemic have changed preferences of
citizens and compels them to move towards healthy diet and consumption of vegan
products. UK is considered as a highly populated country whereby people want easy
solutions to their problems of going out for shopping for their groceries. Strategists of
Ocado Group Plc has planned to identify varied needs of people as per their tastes and
perceptions in order to fulfil that in a rational manner. Market trends are dynamic in
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nature and changes rapidly with little fluctuation in customer demands and perceptions.
This dynamic marketing trends can be a constraint for Ocado Group Plc.
 Technological factors includes new and advances technological advancement in
organisation which helps them secure competitive edge (Yan, 2018). UK is a one of the
leading technological-driven country which supports organisations for the
implementation of technology in their processes. Ocado Group Plc has adopted varied
technological advancements in their organisation and has designed robotics warehouse,
automated customer service support, artificial intelligence and machine learning.
Managers of Ocado have argued that they have launched platform for selling online
groceries by taking first mover advantage. They provide digital solution to a large
number of retailers on a globalised network. Their automated robotic warehouse helps
them to lessen to burden of manual jobs. Even they have launched an application for
Amazon Alexa which helps people in adding products to their cart just by voice
recognition facility. This benefits people in buying their groceries in a very easy manner.
Adaption of advanced technological aspects is an opportunity for Ocado Group Plc. in
securing competitive advantage. They can solve complaints of their customer s through
automated support services in an effective manner.
Recommendation on improving decision-making process in chosen organisation
It has been recommended that decision- making process of Ocado Group Plc. should be
simple and have defined clarity which help employees in understanding their roles as well as
responsibilities in an effective manner. There should be proper and open hierarchy channels for
communicate varied decisions in a strategic manner. It should be clearly define to employees
about how decisions are taken and work. Employees should be align to decision-making
processes in order to know in which direction an organisation is performing its varied operations
(Sehnem and Et. Al., 2022). Establishment of certain and clear goals as well as mission helps in
guiding the personnel for achieving organisational goals and objectives. Clear communication
and hierarchal channels helps in allowing to a specific decision in less time with less debate and
confusion.
It has been advised to managers to Ocado Group Plc. to determine and maintaining a
balance between authority and responsibility delegated to employees. There should be proper
balance between authority and responsibility which helps in decision-making process simpler. As
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without being responsible for a given task, it is not possible to be authoritative. This shows the
ineffective behaviour of employees which make decision-making process more time-consuming.
Balanced responsibility and accountability can help managers of Ocado Group Plc. to learn
effectively form their failures as well as success.
Ethical implications on decision-making in chosen organisation
It is significant for organisation to perform their operations in an ethical manner which
helps them in building a positive image in front of public that in turn assists them in generating
more revenues (Shelton and Shopley, 2017). Ethics plays a significant role in taking the
decisions in an organisation as it solve the dilemma of policy-makers on how to deal with ethical
aspects. Ethical aspects of performing business operations help managers of Ocado Group Plc. in
making their decisions in a strategic manner. They performed effectively by managing their
supply chain through ethical practices. And take decisions for maintaining their supply chain
effectively. These helps managers of Ocado Group Plc in identifying existing strengths as well as
weaknesses in order to improve their performance in significant or key areas. Their sustainable
and ethical practice includes handling forced labour in organisations. Ethical practice of mapping
and ascertaining products which are related to high risks and perishable nature helps them in
making strategic decisions. Managers of Ocado Group Plc have adopted corporate governance
practice in their organisation which assists them in taking critical decisions in a rational manner.
Good corporate governance helps them in supporting their long-term goals and apply sustainable
practices in their business operations.
CONCLUSION
From the above presented report, it has been concluded that business environment helps
an organisation to assess varied opportunities and threats which helps in framing strategies and
policies in a critical way. Innovation help organisations in bringing something new for the
customers and securing competitive advantage over the competitors. Bringing innovation does
not mean to change all the established norms in relation to businesses are changes abruptly.
There is a procedure for bringing innovation and changes in an organisation which helps them in
proper adoption of practices. Ethical practices helps organisations in making accurate decisions.
PESTLE analysis is considered as a framework which helps an organisation in ascertaining
varied existing strengths and weaknesses in order to mitigate threat and having a proactive
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approach about framing policies or strategies. It is desirable for managers to make decisions by
aligning their employees and processes for making implication of ethical practices.
REFERENCES
Books & Journals:
Appiah-Adu, K., Okpattah, B. and Amoako, G. K., 2018. Building capability for organizational
success: An emerging market perspective. Journal of African Business. 19(1). pp.86-104.
Cooper, S., 2017. Corporate social performance: A stakeholder approach. Routledge.
Elkington, J., Burke, T. and Hailes, J., 2017. Green pages: the business of saving the world.
Routledge.
Fuller, J., Jacobides, M. G. and Reeves, M., 2019. The myths and realities of business
ecosystems. MIT Sloan Management Review. 60(3). pp.1-9.
Griffin, R. W., 2021. Management. Cengage Learning.
Julien, P. A., 2018. The state of the art in small business and entrepreneurship. Routledge.
Nguyen, H. and Harrison, N., 2019. Leveraging customer knowledge to enhance process
innovation: Moderating effects from market dynamics. Business Process Management
Journal.
Sehnem, S. and Et. Al., 2022. Circular economy and innovation: A look from the perspective of
organizational capabilities. Business Strategy and the Environment. 31(1). pp.236-250.
Shelton, R. D. and Shopley, J. B., 2017. Beyond the green wall: Rethinking the environment for
business advantage. In Greening the Boardroom (pp. 119-128). Routledge.
Yan, M. R., 2018. Improving entrepreneurial knowledge and business innovations by simulation-
based strategic decision support system. Knowledge Management Research &
Practice. 16(2). pp.173-182.
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