Name of the Company: Ocado
Business Sector: Retail, Online Food and Grocery
Operating Geography: Europe, United Kingdom
About the Company: Ocado Group plc is a United Kingdom-based online grocery retailer, headquartered in Hatfield, Hertfordshire, England. The corpus of this corporate, along with its subsidiaries, centres on retailing and distribution of high quality FMCG commodities within the United Kingdom. Ocado's product line boasts of own brand groceries from the Waitrose supermarket chain, a range of Carrefour's products and an array of name brand groceries and other items. The company got listed on the London Stock Exchange in July 2010 and is currently a member of the FTSE 250 Index. Ocado has about 12,000 employees as of November, 2016.
Revenue: £ 1,271 million – FY 27 November 2016
Competitive Analysis of ocado
|1. Strong technology platform and proprietary software|
2. Ocado’s expansion of own brand range
3. Competitive pricing and wide range of grocery on offer
4. Partnerships with strong brands such as Morrisons, Waitrose and Carrefour
|1. Operations dependent on revolving credit facilities and debt
2. Exposure to a single market and relatively small scale considering the overall UK grocery market
|1. Expansion by replicating the business model in other lucrative European markets|
2. Technology investments to enhance capabilities and competitive advantage
3. Licensing of robotics enabled automated warehouse platform
|1. Brexit may cause economic slowdown reducing consumer spending
2. Competition from online retail giants such as AmazonFresh
1. Strong technology platform and proprietary software: Ocado has unique end-to-end operating solution with its own proprietary technology, Ocado Smart Platform which supports its online retail operations as well as of its partners such as Morrisons. The platform provides customisable solutions depending on the retailer-partner’s specific requirements. Other features such as general merchandise, loyalty schemes or grocery range extensions can also be integrated into the plaform. Online is forecast to be the fastest growing channel in UK grocery segment and as the retail business grows the platform can be scaled whilst achieving cost efficiencies. Ocado is well positioned to ride the growth and the company is implementing continuous incremental innovations on the Ocado Smart Platform in a “live retail” environment to further drive efficiencies for its customers and partners.
The detailed Strength, Weakness, Opportunity, Threat - SWOT Analysis Report along with Political, Economic, Social, Technological, Legal and Environmental - PESTLE Analysis Report is available only in the 'Complete Report' on purchase.
|1. Impact of Brexit on food prices|
2. Political uncertainty leading to slowdown in investment spending
|1. Slowing economy may adversely impact Ocado’s business
2. Intense price-wars across grocery retail sector eroding margins
3. Grocery industry experiencing input cost inflation
|1. Increase in consumer focus on organics and healthy eating|
2. Efficient business model minimizing food waste
|1. Ocado leveraging Robotics, Big data and Artificial Intelligence
2. Strong online interface driving customer experience
|1. Strong compliance standards and audits for suppliers||1. Investments in electric powered vans as part of the delivery fleet
2. Organization-wide commitment to sustainability
1. Increase in consumer focus on organics and healthy eating: There is an increasing consumer focus on healthy eating and organic food products even if it means paying extra as the importance of health and wellness concerns continue to rise. According to industry research the market for healthy food is estimated to reach $1 trillion by 2017. Consumers who are allergic to certain food substances also prefer to consume gluten-free and non-GMO foods. Ocado can capitalize of this trend and offer a comprehensive portfolio of healthy food and organics including plant based protein products such as non-dairy milks (soy, coconut, and hazelnut milks) which are in increasing demand and viewed as healthy options by consumers.
2. Efficient business model minimizing food waste: Food waste is a problem in the retail industry that attracts significant social and media attention. Supermarket chains have been seen as the villains as they are majorly responsible for food wastage due to inefficient supply chains, improper storage and overstocking. With customers also becoming aware on this issue, retailers need improve their image as socially responsible organizations. Ocado has embarked on multiple initiatives to tackle this menace. It has increased automation within its infrastructure which enables lower product waste. Ocado has also teamed up with Waste and Resource Action Programme (WRAP) to reduce food wastage and focus on recycle initiatives. The retailer reported a low product waste of 0.7% in FY16 which is supposed to be the most efficient in the food retail sector. It also reportedly donated 206 tonnes to food bank partners in 2016. The company has also partnered with Ecometrica so that it can publish centralised waste data in 2017.
The detailed Political, Economic, Social, Technological, Legal and Environmental - PESTLE Analysis Report along with Strength, Weakness, Opportunity, Threat - SWOT Analysis Report is available only in the 'Complete Report' on purchase.
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