Ocado's Business Strategy: Macro, Competitive Analysis Report

This report provides a comprehensive business strategy analysis of Ocado, a multinational online retailer. It begins with an introduction to business strategies and their role in achieving competitive advantages, followed by a macro-environment analysis using the PESTLE framework to identify opportunities and threats. The report then applies the McKinsey 7S model to assess Ocado's internal capabilities and the TOWS matrix to evaluate strategic options based on its strengths, weaknesses, opportunities, and threats. Furthermore, it incorporates Porter's generic model and Ansoff matrix to determine competitive positioning and growth strategies. Finally, the report concludes with a strategic plan outlining recommendations for Ocado's future development. The analysis covers various aspects including political, economic, social, technological, legal, and environmental factors impacting the company, as well as its organizational structure, shared values, and skills. The report emphasizes the dynamic nature of the retail industry and the importance of adapting to changing customer trends and technological advancements.

BUSIENSS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
SECTION1.......................................................................................................................................3
Macro environment analysis.......................................................................................................3
Section2............................................................................................................................................6
Mckinsey 7s model.....................................................................................................................6
Tow’s matrix...............................................................................................................................7
Section3............................................................................................................................................9
Porter's generic model.................................................................................................................9
Ansoff matrix..............................................................................................................................9
Section4..........................................................................................................................................10
Strategic plan ............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
The business strategies is the tool that are being used to get competitive advantages (Yuan, Lu,
Tian and Yu, 2020. Ocado is an multinational organisation improving its strategic
planning. This report will evaluate the macro factors and determine the capability of the
company. Further the competitive analysis is done and strategic plan is being made.
SECTION1
Macro environment analysis
This analysis is to identify the required opportunities and threats that is influencing the
industry in which company is operating ( Idris and Rahman, 2018). This is basically not
controlled by the industry itself they have to make changes accordingly.
Strategic positioning of Ocado
The Ocado is international company uses to develop robotics, automation and software
for online retailers. They have created with the retailer business in UK and now become a
separated legal entity. Ocado is using digital technologies as they are making uses of mobile
application to sale their products internationally. The company is making uses of algorithm one
of the complex and smart platform. The process of Ocado is totally online which makes it
different from others.
Ocado is revolutionizing the manner in which people can shop forever through unique
style of shopping the grocery products. The company has passion to provide an adequate quality
when the customer have need of them, they also treat their customer with care and faith.
PESTLE analysis
The Pestle analysis of Ocado involving macro environment factors that influence the business
environment. The pestle analysis include Political, economical, social, technological, legal and
environmental factors which affects the Ocado from outside the business.
Political factor
Government policies: High
During pandemic of COVID-19 government policies for retail industry
The government have influenced the retail industries as they are remained active because
all the people need the essential products. Yet the pandemic period has impacted the supply,

demand and operation of Ocado as the retail industry is large in every country and government is
supporting the retailer to perform their activities during the pandemic period. All the people need
their physiological needs to survive in the market (Shaqrah, 2018).
Political stability: High
Impact of Brexit on grocery industry of UK
Due to Britain exit from the market of EU the political environment is not being stable so
the companies of grocery retailing which are being importing and exporting goods all over the
EU market are facing issues. Earlier the Britain is being part of European Union so there is no
charge to perform the business activities all over the EU market ( Moktadir and et. Al., 2020).
The government is totally dis balanced with this practises as now they have to make their own
roles and regulation regarding the companies.
Economical factor
Economic growth/ decline: High
Reduction in GDP lead to influence the grocery and retail business
In the pandemic period of Brexit and COVID-19 the economic condition of every nations has
been affected drastically (Valente, 2018). The growth is being reduced and economic is facing
lots of issues, the grocery sector remain opened in the pandemic situation in UK. People are
having less disposal income to purchase more by this the whole industry is being influenced.
Consumer buying behaviour: High
Impact of COVID-19 on customer preference
The customers are being more aware in this period of pandemic so their buying behaviour is also
being changed. They are not having enough disposal income to invest in grocery as their jobs are
also being dropped and they are not having income source. They are finding less costly products
and easily shift to some other brand when they found some better price.
Social factor
Customer trends and taste: High
Retail sectors are influenced by customer taste

The customer trends are being changed regularly and retail and grocery have to adopt to the
change to sustain the market for long period. The business have to make immediate change in the
business function so they can get competitive advantages.
Lifestyle: High
Customer lifestyle is regularly changing in market
The customers are being more modern and their lifestyle also improving continuously so they are
purchasing the products accordingly. The people are more aware of adopting to new and fresh
trends in the market and they are now concerned of their health after the pandemic period.
Technological factor
Social networking: high
Impact of social media on customers
The social media is being important tool in current world to interact with people and influence
them to buy the products. With the uses of social media applications like Facebook, Instagram,
Pinterest and many more companies can get competitive advantage.
Artificial intelligence: High
Uses of AI technology in improvement of efficiency of retailors
The retailor industry is making different step to change and innovate their technology the Ocado
is one of the leading company in retail sector as the uses of artificial intelligence is being
increase so with the effective uses the AI technology Ocado can able to improve the efficiency.
Legal factor
Health and safety regulation: High
Laws of health and safety influence the activities of retail sector
In the pandemic period of COVID-19 the government of UK had changed its laws regarding the
employees’ health and safety so with this change Ocado have to make necessary changes in
business
Environment factor

Environmental restrictions imposed by UK government: High
Impact of limitation on retailer industry
The environment is being vital factor to sustain the government has set particular limitation for
the retail industry the Ocado has to perform its activities with undertaking the restriction that are
made by the government to save environment.
Section2
Mckinsey 7s model
This is an tool that is being used to assess the performance of the business, this model help
Ocado to identify its elements of the organisation that are needed for the successfully changing
the management and knowing its capability internally. This model have hard as well as soft
elements as under:
Hard elements
This are elements which are easily identified and can be controlled by the company, with an
effective management practises ( Datta, 2020).
Strategy: As the approach that are being used by the company can be easily by clearly define the
direction in which the business Ocado is going to be. They communicate all the necessary
information to the employees and other stakeholders this helped the company to manage all
The activities and other performance that are being aligned to help the business strategy. This
strategy direction of Ocado is useful to help the business guide its employees to achieve the
organizational goal. Ocado strategy are used to develop a competitive benefits by providing a
suggestion that will help to perform the activities. The strategies helps to change the demand of
the customer and current market trends. Also support the company to remain more competitive
in the market. With the help of strategies Ocado can perform more flexible as per the need of
customers.
Structure
Basically Okado has flat hierarchy structure that help to learn and also announced the growth of
Organization with the help of this structure employees of the company feel more secure. They
are more aware about the information which is necessary to them. Therefore the flatter herarchy

structure help Ocado to make quick decision within the organization. The employees of Ocado
perform their duties with better coordination through which Ocado is ineffective and organize
performers. Basically the company is having hybrid structure which involve decentralization and
centralization yet the company is supporting decentralization to take the necessary decisions .
The organization structure is being more effective with the Communication they follow this help
the company to transfer the information to all the departments.
System
The Ocado has developed an effective system to analysis the operational activities without a
conflicts situation in the organisation. Every tool in the system is helpful to perform better and
also allow to determine the system. They are having a unique process is being align in the correct
manner and the system also make sure that resource are optimally utilised.
Soft elements
This are basically intangible in nature and Ocado cannot able to control this elements directly.
Shared values
The main values of the company is being communicated to supporter of the organisational
structure. The values involves trust, faith, honesty, accountability and many more.
Style
The company is performing its activities by participative leadership approach and taking ideas
and thoughts of employees for making decision. This style of management and leadership help
company to develop a coordination among the team members.
Staff
Ocado is having adequate amount of employees all over the world to perform its activities. The
employee’s selection is internally as well as externally as per the requirement of the company
and the company has placed the employees according to their skill and knowledge.
Skills
Company is having high skill employees and qualification, the Ocado is usually hiring the best
professional that will help to grow and develop the organisation.

Tow’s matrix
This tool is a matrix which assist to identify the strategic capabilities of Ocado, the Tow’s matrix
is an expanded version of Swot analysis (Wellner and Lakotta, 2020). This analysis both the
factor external and internal that are strength, weakness, opportunities and threats.
Strength: Ocado is one of the leading brand in UK as well as internationally, they are having
efficient distribution channel with large number of stores (Datta, 2020). Company is having an
structure which is lower in cost which helping the company to take advantage over its
competitors.
Weakness: the company is not having adequate amount of goodwill and international presence
so this is lacking the Ocado behind. They are also not investing on research and development
process than its competitors.
Opportunities: With the help of e-commerce and using the digital technologies company can
able to reach more customers in the international. The company can launch its products
worldwide for growing its business all over the world.
Threats: the grocery industry is expanding their business internationally so without world
expansion company cannot able to grow in the market. Many new companies are entering in the
market to compete.
(SO) Strategies: Enhancement of market techniques in online as well as physically to attract
more customers. Develop more environmental products with better research and development
campaigns.
(WO) Strategies: Increase the online marketing and interact more with customer through digital
technologies as it help in better growth opportunity. With adequate research they can expand in
right market place.
(ST) Strategies: With efficient distribution channel the company can able to compete more
efficiently in the market. By find the newer and affordable option to reach the targeted
customers.
(WT) Strategies: investing more on research and develop more skills in the existing employees
so that they can perform better. Provide more opportunities to employees to be engaged in
business and achieve the best goals.

Section3
Porter's generic model
The Ocado is making uses of porter's generic to get competitive advantages in the market.
Ocado is one of the market leading buyer proposition. This model help to determine whether the
Ocado profitability is higher or below in the particular industry average. As the company has two
type of process either it will be low cost or they can differentiate in the market.
Cost leadership: when the organization uses this strategy then they lower their prices of
commodity, and they uses to target large number of customer with this as they are the lowest cost
seller in the industry. The benefits include raw material, economic of scale and many elements.
Differentiation: if the company is using differentiation then they will be selling unique
commodity in the marketplace and which have a specific value. The organization in these uses
more than one attribute which customers of that sector are perceiving as important in the market.
Further they make affords to achieve that position.
Focus: When the organization choice to scope narrow then focus strategy is been used by them.
In this there are two variants which are cost leadership in a particular target market and another
is differentiation in targeted market.
As per the above analysis of generic forces Ocado comes under cost leadership style
because they are regularly trying to compete in the market by lowering their price of
commodities. They are also matching their prices with their competitors so that it also help
company to attract customers.
Ansoff matrix
This tool assist to guide the business in taking the right decision to further enhance the business.
Ocado have made an effective uses of Ansoff matrix.
Market penetration: this approach is to enhance the business through existing products in
existing market (MZ and Saliluddin, 2019). This can help the Ocado to reach more customers in
the same market. This lead to investing more on marketing to promote the brand in the same
market. By better distribution channels
Product development: in this the product segment is being improved in the existing market to
influence the people of same market to attracted towards the brand and buy more. The risk is
very normal in this because the existing market know the brand and they will purchase aswell.

Market development: in the development of market the Ocado can able to enter in the new
market with existing products. This will help company to grow internationally and also being
attract more customers ( Hu and et. Al., 2018).
Diversification: In this Ocado can enter into new market with new product so that existing in
new customer both are being influence to buy the product which is being launched by the
company.
Ocado is using diversification approach to gain benefits as it Help Company for better
growth and also create its brand aware in people who are not knowing it.
Section4
Strategic plan
Mission: Ocado is regularly revolutionise the people preference and shopping forever, with
better option that is more unique and innovative then the traditional manner of shopping.
Vision: the company is offering best quality experience that make customers satisfy and develop
an easy option in the current lifestyle of the people.
Objective Specific: To enhance the customer’s satisfaction and profitability in UK market. Measurable: To expand the business all over in UK by the end of dec2021. Achievable: To launch new method to sale the product international by efficient
workforce. Relevant: To ensure that the targeted objective is in synchronization with the current
market trends and mission and vision of Ocado.
 Timely: To become the best retail brand of UK by the end of March 2022.
Initative action
To create better brand awareness internationally.
To provide timely discount to the targeted customer and interact with digital technologies.
To develop customer loyalty and satisfaction in the current year.
Key performance indicator
Sale in being increasing regularly.

Profit is being increased with 20% every year
Employees are retaining within organisation for long-term.
Customers are being loyal and purchasing the Ocado products.
CONCLUSION
This report concludes that with an effective business strategy ocado can get competitive
advantage in the international market. The PESTLE analysis help to identify the government role
in retail industry and Mckinsey model help to find the capability of company and TOW’S help to
know the opportunities and threats as well as strength and weakness of the Ocado.

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