OCADOs STRATEGIC REVISION

Ocado’s Strategy 1

OCADO’s STRATEGIC REVISION

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Ocado’s Strategy 2

Table of Contents

Executive Summary ................................................................................................................................ 3

Introduction ............................................................................................................................................. 4

External Environment .............................................................................................................................. 4

Demography ........................................................................................................................................ 4

Global Development ............................................................................................................................ 4

Physical Consideration ........................................................................................................................ 4

Economy .............................................................................................................................................. 5

Socio-cultural Issues ............................................................................................................................ 5

Political-legal issues ............................................................................................................................ 5

Technology .......................................................................................................................................... 5

Competition ......................................................................................................................................... 5

Resources and competitiveness ............................................................................................................... 6

Vision, Mission Statement and Core Values ........................................................................................... 6

SWOT Analysis and Strategic Choice .................................................................................................... 6

Conclusion and Recommendation ........................................................................................................... 7

References ............................................................................................................................................... 8

Ocado’s Strategy 3

Executive Summary

The fashion industry is among the most expanding sectors in the global economies that

is gradually growing. The fulfillment of the cultural requirements and standards are the

reasons why the fashion industry keeps stability in the economic growth. Also, the fashion

industry is considered to be more versatile. The technological factor plays an important role in

embarking positions, as well as, the status of different classes and communities. Furthermore,

the frequent occurrence has opened ways of promoting fashion products, and this regard, the

industry incurs fewer costs of advertising. Most companies in the industry have been

organizing series of events as a way of promoting their products with different events often

featuring different fashion designs. Among the events that expand opportunities in this

industry include the “International Fashion Showcase 2016”. This strategic report will analyze

the effect of organizing international events which promote the country reputation.

Ocado’s Strategy 4

Introduction

Regarding the fashion industry, administration and management of events include the

planning process which can be used in promoting different business activities. Ocado is an

online supermarket based in the United Kingdom and considered to be among the best online

supermarkets. Functioning within the fashion industry, Ocado, attracts many businesses

across the region. Consequently, Ocado plans on expanding and establish a new branch in

China and Brazil. In line with this, the British Fashion Council pushes for Ocado to diversify

its fashion products to meet the Brazilian customers’ needs.

External Environment

Demography

According to the 2012 census, China comprised of a population of over 1.3 billion

(Bruzzi & Gibson, 2013). Entry of a new middle class with more spending capacity is among

the attractive features of this market. However, future challenges may arise due to the ageing

population. Similarly, rural-urban migration may result in a reduction in the agricultural

production, which may reduce the market supply.

Global Development

With the BREVIT vote, uncertainties arise regarding the medium-term economic fate

of the UK businesses. World Bank (2016) asserted that China economy recorded a growth of

7% in 2016. This gives an expectation of more growth in the economy, thus making the area a

suitable hub for foreign investors.

Physical Consideration

With a vast land area, China has managed to achieve food security, as a result of the

agricultural growth (Koumparoulis, 2013). High growth in the agricultural sector will be a

great advantage to Ocado upon entry to China. In addition, China has a developed

infrastructure that can boost the Ocado’s economic development.

Ocado’s Strategy 5

Economy

China has a strong economy that can enhance high living standards. This economic

stability will enhance Ocado’s economic development and expansion. Compared to UK,

China has a cheaper labor, which can reduce the cost of operating business.

Socio-cultural Issues

The China social issues are based on recognition of the groups, but not individuals. To

enhance growth in business, Ocado must establish mechanisms that ensure that the taste and

price of products are recognized by the social classes.

Political-legal issues

The communist party has centralized the politics in China. There are restrictions of

people’s movement from rural to urban areas. Additionally, business ownership is regarded a

community owned entity. This implies that Ocado will not enjoy individual business

ownership as it is not allowed.

Technology

According to Internet Live Stats (2016), internet users increased by 21.1% from 2000

to 2016. This implies a high investment in in the ICT framework. Following this, Ocado will

enjoy stable E-commerce facilities in China.

Competition

According to Deloitte (2015), China attracts many entrants both within and cross-

border retailers and online grocers. There is an increase in the E-commerce demand which has

forced the Chinese government to establish pilot zones to control product importation. This

implies that there is a stiff competition within the online business ahead of Ocado’s entry. In

addition, there is a threat from the established online business

Ocado’s Strategy 6

Resources and competitiveness

Ocado has many distribution centers across UK, providing it with sufficient physical

resources. In addition, it has vast resources in terms of machines and equipment, which match

the modern technology. Furthermore, Ocado has a strategic acquisition strategy that enabled it

to obtain supplies at lower costs compared to other markets.

With the adoption of e-commerce, Ocado is well placed at utilizing the e-commerce

technology in China. Online business is more dynamic, and hence e-commerce provides a

chance for Ocado to integrate other business opportunities. Additionally, Ocado has a stable

financial background that come handy in successful establishment of business in the foreign

country. Above all, it has a good reputation, not only in the UK but also globally. Ocado’s

entry to the new environment will translate to good reception in the market.

Vision, Mission Statement and Core Values

During its launch, Ocado was the first online based supermarket. Ocado's vision to the

customers is to make shopping easy and flexible. The core values that define her operations

are innovation, customer service, teamwork and commitment to the environment. Ocado’s

mission is to deliver happiness to its customers by going to an extra mile.

SWOT Analysis and Strategic Choice

Ocado is perceived as the best online supermarket among the companies in the UK. It

is under the British Fashion Council hence it is perceived as superior supermarket with

excellent branding in the fashion industry. Based on this, the firm can effectively sustain itself

in China’s new environment as it provides exclusive offerings. Ocado has a stronger market

link that will make it grab the attention of the customers in the new market.

However, the Ocado is limited regarding its ability to explore the foreign markets

because it depends highly on the entrepreneurs from the UK. Despite the weakness, there are

opportunities for Ocado to thrive. Engagement with British Fashion Council is so popular in

Ocado’s Strategy 7

the foreign countries. Among the threats faced is the entry of new companies in the Fashion

industry.

Conclusion and Recommendation

In conclusion, Ocade has more potential than limitations to establish and succeed the

new China’s. The company’s resources and reputation play an important role in its reception;

however, the management should be prepared in handling challenges that may be

experienced. The fashion industry will maintain its trend in the economy as long as people’s

life-styles are paid attention to. It recommended that Ocade’s continued business support the

organizations or councils will beneficial as the company seeks to expand to the international

market. Such a supported will ensure that the business enjoys trust in the market and hence,

revenue increase.

Ocado’s Strategy 8

References

Bruzzi, S. and Gibson, P.C., 2013. Fashion Cultures Revisited: Theories, Explorations and

Analysis. Routledge.

Deloitte China. 2015., China Power of Retailing 2015 | Deloitte China | Consumer Business.

[online] Available at: https://www2.deloitte.com/cn/en/pages/consumer-

business/articles/china-powers-of-retailing-2015.html [Accessed 30 Mar. 2017].

Internetlivestats.com. 2016., China Internet Users. [online] Available at:

http://www.internetlivestats.com/internet-users/china/ [Accessed 30 Mar. 2017].

Koumparoulis, D.N., 2013. PEST Analysis: The case of E-shop. International Journal of

Economy, Management and Social Sciences, 2(2), pp.31-36.

Worldbank.org. 2016., China Overview. [online] Available at:

http://www.worldbank.org/en/country/china/overview [Accessed 30 Mar. 2017].

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