Innovation Strategies for Ocado: A Business Development Report

This report provides an in-depth analysis of Ocado's innovation strategies, focusing on disruptive innovation and diffusion of innovation theory. It examines how Ocado, an online grocery retailer, utilizes these theories to improve its products and business model, particularly within the competitive UK retail market. The report details the principles and processes of disruptive innovation, including its benefits and limitations, as well as the key elements of the diffusion theory of innovation. It explores Ocado's historical development, highlighting how the company has adapted and implemented new technologies to gain a competitive edge, transitioning from a partnership with Waitrose to a leading online grocery provider. The report also discusses how Ocado has embraced technological advancements, such as online ordering and automated warehouse systems, to ensure efficient operations and fresh product delivery. The analysis underscores Ocado's ability to adapt to market changes and leverage innovation for continued growth and market leadership.

Managing Innovation

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Innovation theory and its explanation in detail......................................................................3
Implementation of theory that explain historical development among organisational product
and service..............................................................................................................................7
Disruptive Theory in context of future development.............................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The term innovation is explained as the process for converting an idea or invention into
product or service that satisfy need and wants of customers in an organised manner. In order to
develop an innovation an idea must be replicable at an economical cost and the main motive of
innovation is to satisfy need and wants of market in an appropriate manner. This report is written
from perspective of Ocado which is an online grocery store and in present scenario it work with
adoption of Ocado smart platform for performing work as market leader in the world (Bailey and
et. al., 2018). Moreover, this report highlights on innovation theories such as disruptive
innovation and diffusion of innovation theory for the improvement of products and business
model. Implement of innovation theory from perspective of historical development and future
development context will also be included in the report. In the last, implement of theory among
organisation is focused in the upcoming report.
MAIN BODY
Innovation theory and its explanation in detail
Disruptive innovation
Disruptive innovation works as a technique that is utilised for applying new technology
among the organisation. It is also used by management for improvising the process of Ocado that
leads to complete all task with more efficiency and effectiveness by implementing innovation in
existing process of organisation. The nature of disruptive innovation is stealthy that offer inferior
in the existing market technology. With the analysis of UK retail market it is identified that the
market conditions is too competitive and most of the organisations are performing their work at
global level (Bates, Ingram-tedd and Shields, 2018). So it is difficult to compete with retail
organisation but with the help of innovation it is easy to sustain in market and attract more
number of customers through adopting innovation.
Principle of disruptive innovation
In order to implement disruptive innovation there are different principle implemented by
organisation which leads Ocado to implement disruptive innovation. Some of them are mention
as follow:
 To assume possibilities- An organisation required powerful ways or methods to re-
establish and reinvent the business than helps to assume some paths. This leads an

organisation to formulate or find new areas that not exist in market. So the assumption
principle supports an organisation to implement innovation in product and services.
 To work with experience- In the present scenario, there are various situations exists
in market such as change in policy, new trend etc. which generate challenge for
organisation to complete their work (Bieraugel, 2015). So by using the experience from
previous situation it is easy for management to formulate right innovation methods.
Example- Ocado implements disruptive innovation method to make presence of its
stores on online platform.
 Embrace failure- According to present market conditions there are various ideas
implemented by management. So to implement them among all departments Ocado
management explain the benefits of innovation that leads to select right method of
innovation for organisation.
Process of disruptive innovation
The process of the disruptive innovation is competent for establishing changes in the
organisation or enterprise by entering in market from bottom point. This process slowly leads
business for continuing growing to the up market. There are four different steps mention as
follow to understand disruptive innovation.
 Change in market- With the disruption method and organisation is able to make
changes in their normal process. This is the first step which is applied by Ocado for
entering in the market in a successful manner. Moreover, in order to achieve more
success disruptive innovation implements changes among all segments.
 Innovation for low end or new market- The term low-end disruptive innovation refer
to a business plan that is enough for satisfying needs of lower markets. With taking
action towards low end market it is easy for organisation to make their focus on greater
profit margin (Bowers and Khorakian, 2014). Similarly, for new market business
compete with rival companies with low price rate. So with emerging model of disruptive
innovation it is easy to earn revenue from new market by focusing on under-served
customers.
 Disruptive innovation inclusive procedures- This is the last that relates with overall
process for organisation it refers among all operations and functions disruptive
innovation perform their work. In simple terms it governs that Ocade is performing their

work with online and offline channel. So at the first stage it is identified that E-
commerce not work as an effective platform for sale of grocery products. But these
challenges are overcome by organisation through using system and procedures which are
designed by implementing innovation in the existing process it leads management to
make changes among all parts of organisation.
Benefit of Disruptive innovation
 The major benefit that is achieved with implement of disruptive innovation relates
with market deliver of product and services (Clarke, Lindbo and Ingram-tedd, 2018).
So it is easy for management to formulate products according to market trend.
 Another benefit which is accomplished by Ocade with implement of disruptive
innovation demonstrate that competitive edge is gain by management through
providing products at low rate.
Limitation of disruptive innovation
 In order to implement disruptive innovation respective organisation need to implement a
separate strategy that only focused on work possibilities of disruptive innovation.
 Another limitation which is related with disruptive innovation demonstrate that to earn
more profits Ocade need to wait as it is a slow and complex process.
Diffusion theory of innovation
The term diffusion theory of innovation refers to the hypothesis which outline how new
technological advancement are implemented in the organisation. This is also useful for
understanding the impact of innovation upon all operations and functions. Along with this it is
also used to develop market share by focusing on important factors of organisation such as to
identify those factor which are early adopted by organisation and consumers.
Principle of Diffusion theory of innovation
 Communication- It is the first key that is required by the Ocade for all of its functions
and operations (Curtis and Sweeney, 2017). Moreover, in the context of diffusion theory
communication principle leads organisation to share and transfer information which
generates mutual understanding between organisation as well as employees.
 Social system- With the social units it is identified that there are various inter-related
social units exist. It is also analysed by management of Ocado that for problem solving
the boundaries of diffusion process is used for influencing more number of individuals.

 Time- This is mandatory for organisation that all of its task are completed in decide time
period. Innovation among products relates undertakes more time to understand and so to
work and accomplish of company task as per decided time.
 Observation- One of the most important function which is identified by management
demonstrates that by observing all techniques it is easy to work properly. This also refers
for better observation Ocade utilise online tools such as SAP for understanding
innovation techniques.
Process of Diffusion theory
The steps of diffusion innovation process refer to the method that is used by organisation
for attracting large number of individuals (de Zubielqui, Jones and Statsenko, 2016). This also
determines by adopting new products that are inferior for organisation and it is also used to make
superior products. Further, step which is related with diffusion process are mention as follow:
 Knowledge- The first step which is related with diffusion is used to implement
knowledge among organisation. With this point Ocado is generating meaningful
information to make decision for purchase of sufficient products. It is also used for
generating awareness of product.
 Persuasion- With the implement of persuasion point idea to work with the prospective
adopter in used that seek information among organisational products. It is also used to
sale product in an appropriate manner.
 Decision- Eventually the most important decision which is adopted relates with
generating positive and negative about each aspect of innovation. It is also used for
making rational decisions to work with phase that is used in acquiring intelligence.
 Implementation- Once the decision for adopting a product is implemented than most of
the products are purchased which are useful for organisation (Du, Leten and
Vanhaverbeke, 2014). With analysis of different phase it is also used to make products
that access information in quality.
 Confirmation- With development of organisation results it is used to make decisions that
use product and it also generate continue innovation among company products. It also
refers that by right phase that make personal examination to promote organisational
areas.

Implementation of theory that explain historical development among organisational product and
service
Company Background
Ocade is the British online supermarket which describes itself as the world largest
dedicated online grocery store or retailer that performing their function with motive of obtaining
top position in market. The background of organisation is just two decade old as the organisation
was founded in 2000 year. In its initial years Ocade was working with Waitrose as a partnership
form. In the year 2006 when Michael Grade was appointed as financial advisor than organisation
also list themselves among market. This determines that the old model of Ocade model was
simple in which company sold its products with help of shops (Duarte, Goodson and Dougherty,
2014). The role of Disruptive innovation monitors in the year 2009 in which it is identified that
to sustain in retail market management must adopt innovation to compete with retail
organisation. So the modification which is implemented in organisation defines that use of
technology leads management to complete all work with more efficiency as the scope or
opportunity which exists in market relates with online order and deliver of grocery stores.
Moreover, in context of Ocado organisation is performing their work according to retail model.
This also refers that by managing Disruptive innovation among organisation is recognised as a
tech online grocery store rather than retailer. This is also identified that management implement
changes with product and services which make historic changes for application of new business
model as it is necessary for development of theory because it is mandatory to make changes in
current process to sustain in intense competitive market.
Historical development- According to present scenario, it is identified that there are various
changes are develop with the implement of innovation in the organisation. This refers there is
large product portfolio is controlled and managed by company that is leading business for
completion of work in an appropriate manner (Lind, 2017). But with offline method it is
identified management is facing various challenges due to which its task are not completed in
time. So with disruptive innovation it is easy for completion of work by using technology it also
refers that management is completing work as per implement about application for the I-phone.
So now all orders are placed by organisation from smart phone. In order to implement the online
techniques Ocado provide training to all employees. After that organisation deliver the order
products or grocery items to the mention address. The delivery of products is adopted by

organisation through arranging resources such as right order and availability of individual that
are responsible for delivery of products in minimum time for satisfying customer through use of
disruptive theory. With innovation perspective it is identified management of Ocado also ensure
that product which is delivered must be fresh. For this the innovation implement by management
among their warehouse also as total system which is selected by organisation are automated.
Example- if vegetable are stored for longer period that organisation ensure the temperature for
cold storage is adjusted with automatic system (Lindbo, Ingram-tedd and Karolinczak,, 2019).
This also refers organisation disruptive innovation is implemented by management for complete
of all operations according to time. To adopt online system it is also ensure by organisation that
with adopt of application it is easy for making changes to complete task properly. Similarly, it is
also identified by management that application of disruptive innovation theory is prepared for all
departments. Manager and supervisor are responsible for motivating individuals due to which
changes related with disruption theory is implemented.
Disruptive Theory in context of future development
According to the analyses of present market conditions that is related with market of UK
retail industry it is identify that organisation is managing business through online platform. This
is also identified the future perspective develop area which is making creative ideas. Along with
this this is also identified by management that company plan is supported for insist of identifying
research methods. The main motive for developing right areas relates with completion of work
with new ideas under which Ocade perform its task which is used in developing areas that boost
company goals and objectives. The new ideas make modifications in organisation application so
it is easy for customer to place order. Changes which are required by management are essential
for developing of innovation feature in mobile application because most of individuals are
placing order through ocado.com which consist Login identification and password and then order
are placed by consumer.
With the new idea that is related with implement of mobile application focuses that it is
used for developing flexibility option for organisation and individuals in exchanging their
services (Pandit and et. al., 2018). It is also identified by management that application are
focused to work with techniques that is boosting possibilities for exchanging service with each
other. This also results organisation is managing business in proper manner that leads to satisfy
need and wants of customers in proper manner. It is also used in making results which leads for

making application under which possibilities retain to make creative idea. One of the major areas
under which task and application support the website and it also refer that making changes in
business application that lead to select better position in market. Government also initiate
organisation to implement ideas which are creative and the main focus for this it is identified that
management is facing challenge. So the new strategy which are developed relates with
completion of task that concern with supporting ideas to implement changes that relates for
application (Prokop and Stejskal, 2017). It also concern management of Ocado go through with
new ideas. The changes with relates with organisation consider in to identify areas which provide
scope and it results in selection of company due to which ideas are paired properly. Along with
this it also relates with undertaking ideas through organisation make ideas. Ideas are assumption
which is developed for satisfying needs and wants of customers in an organised manner through
using different technique that relates with technology and support for enhancement of
organisation product sale.
Give More An incentive to the Clients
Business is about response. With new idea organisation offer an item, the market opens
their wallets if application generates interested among customers to purchase product. Perhaps
organisation plunked down all representatives and attempted to make sure about the most ideal
approach to support a greater amount of this wallet-opening commitment from customers. For
this application need to expand their cooperation with all business stakeholders for making
advance deals, obviously, yet application likewise need to give a degree of significant worth to
all clients to generate loyal customer base.
One approach to do this is make a reliability program inside the new application (Seidel, Mareï
and Blanquart, 2016). It would work this way through which more clients collaborate with
business and item, the more focuses they gather, which can thusly be utilized for incredible
arrangements on the items they definitely realize they need. So the sale of organisation products
enhance easily.
Assemble a More grounded Brand
One of the most significant things a versatile application offers to shoppers is attention to
and correspondence with company image. With more customer association with organisational
objective it is easy for encouraging trust. The more crowd or individual confides in, almost
certain they'll be to tune in to later attempts to sell something and even focus on development of

organisation image. With an application, it is easy to exhibit clients why they should confide in
the new application by appearing (instead of determining) what the image depend on. Similarly
as appropriating refrigerator magnets, schedules, and other arbitrary memorabilia with
organization logo on it has served in the past both as notice and help, versatile applications
reinforce Ocade image and convince clients (Seidel and O’Mahony, 2014). That is the reason
such a large number of organizations over all the significant parts are creating procedures for
portable applications. So more number of customers purchase products from organisation for
increasing company profits.
CONCLUSION
In the last, with the above theory it is identified by innovation is one of the major aspect
that is leading organisation for complete of work in an appropriate manner. There are various
types of innovation exists such as disruptive innovation, diffusion theory of innovation etc.
which is used in making research perspective. Along with this it is also identified that to develop
an effective plan organisation also implemented innovation techniques with providing better
training to all employees. On the other for historic development innovation is adopt under
guidance of company authorities. Further, future development is established by motivating
employees to adopt changes and work with new theory so plans are implemented in proper
manner. In the last, by understanding principle and process related with innovation theory
accurate and effective steps are developed to adopt innovation process.

REFERENCES
Books and Journals
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