Assessing Impact of Innovation and General Environment of Ocado Group plc

This report assesses the impact of innovation on modern business organisations and analyses the general environment of Ocado Group plc to identify major opportunities and constraints. It also provides recommendations on improving decision making and ethical implications of decision making in the company.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Assess the impact of innovation on modern business organisations......................................1
Assess the general environment of the company to identify the major opportunities and
constraints it is facing.............................................................................................................2
Recommendations on improving decision making in the company.......................................4
Ethical implications of decision making in Ocado Group plc................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
Online-.............................................................................................................................................7

INTRODUCTION
It is essential for every company to analyse their internal and external business
environment to analyse the opportunity for growth of their organisation and the risks of the
organisation. There are two types of business environment which are internal and external
business environment. Internal business environment cover all those factors which created within
the organisation like relationship of employees and managers team, organisational structure,
division of job roles and responsibilities, skills and talents of employees and many others (What
are the Different Types of Business Environment?, 2022). On the other hand, external business
environment are including those factors which can impact the growth of the company from
externally like Political factors, Technological factors, Economical factors, marketing condition
of selected location and many others. Ocado Group plc is one of the most popular British online
retailing company which was founded in the year 2000 by Tim Steiner, Jonathan Fairman, Jason
Gissing. The company is headquartered in Hatfield, United Kingdom (Ocado Group, 2022). The
following company sell their grocery products through online deliveries to their targeted
customers. The following report cover impact of innovation, analysing the general environment
of the company, recommendations and ethical implication of decision making in the mentioned
organisation.
MAIN BODY
Assess the impact of innovation on modern business organisations.
The most common characteristic of modern business market is that it is dynamic in nature
which means it changes rapidly. Trends, customers preferences, technology many other factors
change rapidly and it also impacts the business. Hence, it is essential for companies to become
innovative adopter of changes which further help the organisation to grow well. Adoptive
innovator changers are those companies which quickly adopt the innovation in their products,
processes and technology to serve quality products and services to their customers and gain high
success in market (Georgiadou, 2019). It is not essential that a company can adopt new product
and process but they can also modify their existing products and processes in such a manner
which will help companies to achieve organisational goal in much effective manner as compared
to the time before adopting innovative changes. Hence, innovation impacts positive upon modern
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business organisations. In context of Ocado Group plc, the benefits of adopting innovation to
their organisation is mentioned below-
Improved productivity- One of the biggest advantage of adopting innovation within the
companies is that it improve productivity of the organisations (Pansera and Owen, 2018). In
context of chosen organisation, they can bring innovations in their services and processes to
improve their productivity. For example, in case they choose price cuts or discounts for large
quantity of products will help them to gain more customers which further help them to increase
their productivity.
Reduced cost- Innovation can also help the chosen organisation to reduce their cost
(Hughes and et. al., 2019). For example, in case they chose innovation in their delivery process
and make it more effective by using big vans and trucks to deliver products a large quantity of
orders to customer's doorstep will help them to save transportation cost.
Improve brand recognition and value- Innovation will also impact the Ocado company
to enhance their brand recognition in market by attracting more customers. Today, market is
becoming customer centric which means the main requirement of companies is to satisfy their
customers. Most of the customers chose to buy their products from those companies who are
having innovative way to serve their customers. Hence, this will further help the chosen
company to develop their brand recognition and value.
New opportunity of companies for partnership and collaboration- This is also one of
the most effective benefit of innovation for a company's growth (Chiambaretto and et. al., 2020).
In context of Ocado Company, in case they adopt effective innovation technologies and
processes within their company then most of the other companies get attracted toward them and
approach for partnerships and collaboration which further help the chosen company to enhance
their profitability. This will not only help to attract other multinational companies but it will also
help Ocado Company to attract experienced and skilled investors and stakeholders which can
further help the company to grow well by their effective decision making and problem solving
skills
Assess the general environment of the company to identify the major opportunities and
constraints it is facing
It is essential for the company to analyse their external business environment on regular basis
because this will help them to identify the opportunities for their organisational growth and this
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will also help them to identify the risk which can impact negatively upon the growth of their
organisation. Few of the external business environment regarding the company is mentioned
below-
Political factors- It includes political stability, tax policies, trade restrictions and many
others (PEST Analysis: Political Factors in the UK, 2022). In context of UK, they are having no
trade restrictions on UK based companies as well as there is no investment barriers and no
restrictions on transfer of capital or repatriation of profit (United Kingdom - Country
Commercial Guide, 2022). This can provide benefit to the Ocado company to expand their
business operations and target larger market area to conduct their business and earn more profit.
This will help them to import the raw material for packaging of their products from those nations
where they can deal in lower prices for their business. Secondly, they can also export their
grocery products from one country to another for their business operations without having any
trade restriction. On the other hand, the lending rate of UK is 1.50% (United Kingdom Prime
Lending Rate, 2022). This will further help the Ocado company to use banking facilities such as
loans for financing their business operations. Corporate tax rate of UK is 19% which impacts
negative upon organisations to pay high taxes to the government and reduces their revenue
amount (United Kingdom, Corporate - Taxes on corporate income, 2021).
Economic factors- It include inflation rate, employment rate, cost of raw material,
condition of infrastructure and many others (Economic Factors, 2022). in context of UK, their
employment rate is stood at 75.5% (Employment rate in the United Kingdom from March 1971
to December 2021, 2022). This means that UK is having appropriate employment rate which can
further help the chosen organisation to hire skilled and talented employees for their business
operations. On the other hand, the cost of raw material in UK is high and it further estimated that
the prices of raw material in UK will continue to grow high (Rising Cost in Raw Materials Prices
from Suppliers - Strategies to Address?, 2022). This can impact negative upon Ocado Group plc
to purchase their raw material at high cost which further increase their expenses in their financial
statements. Hence, the revenue get declined by the high price of raw material within the UK for
mentioned company. In context of UK, their current inflation rate is 2.62% and it is becoming
higher than the previous year (United Kingdom: Inflation rate from 1986 to 2026, 2022). In the
year 2021, UK is having 2.19% inflation rate and now it has been increased by 0.43%. This is
not good for the chosen company because when inflation rate get increased the purchasing power
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of customers get decline which further impact negative upon the sales of Ocado company. Their
customers will spend less on purchasing groceries and they will only focus to purchase essential
items and within a limited quantity.
Legal factors- It is essential for companies to follow the laws and regulations which is
implemented by the government of their nation (Alnefaie, 2022). UK is well known for their
strict rules and regulations especially for their corporate climate. This external business
environment will help the organisation to perform their operations within a proper guidelines of
discipline. In context of UK their employment law like Health and Safety at Work Act 1974
states that employees as well as employers must make sure that they will conduct their
operational activities by taking all proper safety measures (The Health and Safety at Work Act
Explained, 2022). For example, in case the employees are working within a manufacturing
department than they must make sure that their employees will wear helmets and leather gloves
to protect their life from any kind of injuries. In context of Ocado company, they must provide
life insurance to their employees and provide all safety measures such as separate medical kit to
each employee. This will help the mentioned company to motivate their workforce to perform
better and achieve organisational goal. Other example of employment law in UK is National
Minimum Wage Act 1998, this act is implemented with the main aim to protect the right of
workers and to avoid labour exploration (National Minimum Wage and National Living Wage
rates, 2022). Here, employer is restricted to provide at least minimum wage rate to their
employees. This will help the Ocado organisation to gain their employee satisfaction which
further help them to motivate to perform well for the organisational growth by increasing their
sales. Salary is considered as one of the most important factor of employee satisfaction. Hence,
when Ocado Group plc provide attractive wages to their employees then they will work
effectively. On the other hand, attractive wage rates will also help them to attract new talented
employees within their organisation.
Recommendations on improving decision making in the company
 It is recommended for the selected organisation that they must keep the records of their
internal and external analysis and decisions made to mitigate the risks for longer period
of time so that they will compare and use these documents whenever they are required to
make a new decision. It will help the organisation to improve their decision making in
case they compare their previous conducting activities with new decided activities.
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 It is also recommended for the chosen organisation that they will also focus on
implementing some innovative strategies within their organisation for positive outcomes.
Some of the innovative strategies are implementing new and attractive discounts on bulk
purchase for customers. They can also use large trucks and vans to deliver large quantity
of orders for customers at their doorstep to reduce fuel expenses and other transportation
expenses. Hence, a innovative strategy can be made by innovative skilled employee
within the organisation. Therefore, it is also recommended to the organisation that they
will focus to hire those employees within their organisation which are having innovative
skills and other essential skills such as problem solving skill, decision making skill and
many others to improve decision making process of the company.
 It is also recommended to the organisation that they must allow the participation of junior
level employees in their decision making process and rewarded them in case they provide
effective suggestion to the management team. This will motivate the employees to
generate high critical thinking skill and help the organisation to improve their decision
making process.
Ethical implications of decision making in Ocado Group plc
Ethical decision making is based on making those decisions which are based on core
character values like respect, responsibility, fairness and caring factors. It further shows ethical
business practices and ethical employee behaviour for making effective decision for the
organisational growth (Valentine and Godkin, 2019). In context of Ocado Group plc, it is
essential for the management team that they must aware their junior level employees regarding
any decision within the organisation. This will help the company to gain employees satisfaction
and make them feel that they are the important part of the organisation. Secondly, in case any
employee provide a good suggestion for organisational growth then that employee must be
rewarded and appreciated by the management team of the organisation. It is also ethical for the
selected company, that they must train their employees in case of any organisational change so
that they will enhance their skills and talents to perform their task with new strategies and tactics
made by the company for organisational profit in their decision making process. Asking for
employees feedback that whether they are able to perform their task properly or not after making
new decision is also one of the most common ethical practice by the organisation. Hence, Ocado
Group plc must ask for employee's feedback that whether they are able to understand the new
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decision or not and in case they are unable to implement the new change then the management
team must modify their decisions.
CONCLUSION
It is concluded that analysing business environment for a company is one of the most
essential task of the organisation which further help them to identify growth opportunities. It is
sentential for the modern business organisations to implement innovative changes within their
organisation to grow high. Innovative changes will help them to enhance their productivity,
profitability, sales and it also help to develop brand recognition and value. It is also concluded
that external business environment like political factor, economic factor, legal factor and many
others will help the company to maintain their growth strategies. For example, employment rate
of UK will help the organisation to hire skilled and talented employees. It is also essential for
organisations to focus on implementing ethical decision making process for gaining high
employee satisfaction.
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REFERENCES
Books and Journals
Alnefaie, B.D., 2022. The UK Public Sector Ombudsmen: a doctoral and socio-legal analysis on
the possibility of transplanting an ombudsman into Saudi Arabia inspired by the UK
model (Doctoral dissertation, University of Glasgow).
Chiambaretto, P. and et. al., 2020. Small and large firms’ trade-off between benefits and risks
when choosing a coopetitor for innovation. Long Range Planning, 53(1), p.101876.
Georgiadou, M.C., 2019. An overview of benefits and challenges of building information
modelling (BIM) adoption in UK residential projects. Construction Innovation.
Hughes, L. and et. al., 2019. Blockchain research, practice and policy: Applications, benefits,
limitations, emerging research themes and research agenda. International Journal of
Information Management, 49, pp.114-129.
Pansera, M. and Owen, R., 2018. Framing inclusive innovation within the discourse of
development: Insights from case studies in India. Research Policy, 47(1), pp.23-34.
Valentine, S. and Godkin, L., 2019. Moral intensity, ethical decision making, and
whistleblowing intention. Journal of Business Research, 98, pp.277-288.
Online-
What are the Different Types of Business Environment?, 2022. [Online]. Available Through :
<https://www.marketing91.com/types-of-business-environment/>
Ocado Group, 2022. [Online]. Available Through :
<https://www.crunchbase.com/organization/ocado/>
PEST Analysis: Political Factors in the UK, 2022. [Online]. Available Through :
<https://www.accountingweb.co.uk/community/industry-insights/pest-analysis-political-factors-
in-the-uk/>
United Kingdom - Country Commercial Guide, 2022. [Online]. Available Through :
<https://www.trade.gov/country-commercial-guides/united-kingdom-trade-barriers/>
United Kingdom Prime Lending Rate, 2022. [Online]. Available Through :
<https://tradingeconomics.com/united-kingdom/bank-lending-rate/>
United Kingdom, Corporate - Taxes on corporate income, 2021. [Online]. Available Through :
<https://taxsummaries.pwc.com/united-kingdom/corporate/taxes-on-corporate-income/>
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Economic Factors, 2022. [Online]. Available Through :
<https://www.wallstreetmojo.com/economic-factors/>
Employment rate in the United Kingdom from March 1971 to December 2021, 2022. [Online].
Available Through :
<https://www.statista.com/statistics/281992/employment-rate-in-the-united-kingdom/>
Rising Cost in Raw Materials Prices from Suppliers - Strategies to Address?, 2022. [Online].
Available Through :
<https://www.forbessolicitors.co.uk/news/47627/rising-cost-in-raw-materials-prices-from-
suppliers-strategies-to-address/>
United Kingdom: Inflation rate from 1986 to 2026, 2022. [Online]. Available Through :
<https://www.statista.com/statistics/270384/inflation-rate-in-the-united-kingdom/>
The Health and Safety at Work Act Explained, 2022. [Online]. Available Through :
<https://www.britsafe.org/training-and-learning/find-the-right-course-for-you/informational-
resources/health-and-safety-legislation-what-you-need-to-know/>
National Minimum Wage and National Living Wage rates, 2022. [Online]. Available Through :
<https://www.gov.uk/national-minimum-wage-rates/>
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