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Ocado Versus Tesco.Com Case Solution & Answer

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IMD-6-0323 © 2010 Nikos; Tsikriktsis, Valerie, Keller-Birrer

In the United Kingdom several firms were competing in 2009 for a share of the fast growing on-line grocery store marketplace, using two distinct company strategies. A solely on-line grocer ran out of a dedicated distribution center, Ocado. By the year 2009 Ocado had grown from its first three founders to over 3,000 workers and was just about to become prosperous.

It faced competition from Tesco.com, the largest on-line grocer on earth. The UK’s top supermarket chain, Tesco, had began a net addon to its routine company and used present supermarkets to run its online operations. Players will be challenged to consider the challenges what chances both firms need to further grow their company and on-line grocers face to match shoppers’ expectancies, how operational choices impact the consumer proposal.

Subjects: E-Commerce; Online grocery retailing; Supply chain; E-Business; Customer orientation Settings: Online grocery retailing; U.K.; 2009; 3,000 employees

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Ocado Versus Tesco.com

By: Nikos Tsikriktsis, Valerie Keller-Birrer

In 2009 several companies were competing in the UK for a share of the fast-growing online grocery market, using two different business approaches. Ocado, a purely online grocer operated out of a…

• Length: 7 page(s)
• Publication Date: Mar 11, 2010
• Discipline: General Management
• Product #: IMD553-PDF-ENG

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In 2009 several companies were competing in the UK for a share of the fast-growing online grocery market, using two different business approaches. Ocado, a purely online grocer operated out of a dedicated distribution center. The company was founded by three former investment bankers in early 2000. By 2009 Ocado had grown from its original three founders to over 3,000 employees and was just about to become profitable. It faced competition from Tesco.com , the biggest online grocer in the world. Tesco, the UK's leading supermarket chain, had started an internet add-on to its regular business and used existing supermarkets to run its online operations. Learning objectives: This case compares Ocado and Tesco.com business models from a consumer proposition, operational efficiency, profitability and sustainability point of view. Participants will be challenged to think about the challenges online grocers face to meet shoppers' expectations, how operational choices impact the consumer proposition and what opportunities both companies have to further grow their business.

Mar 11, 2010 (Revised: Jan 20, 2015)

Discipline:

General Management

Geographies:

United Kingdom

Industries:

E-commerce industry

IMD553-PDF-ENG

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Ocado vs Tesco is not a fair fight

There was a mixed response to the recent news that Ocado had overtaken UK’s leading grocer Tesco, albeit briefly, as UK’s most valuable grocery company. In the 20 years since its launch, Ocado has been the subject of much debate and skepticism about its business model and many grocery industry stalwarts did not show any enthusiasm for on-line grocery operations. A former Tesco chief executive once described the firm as a "charity" because of the losses it had racked up in its early years, and Morrison's did not even have an online grocery offering until their relationship with Ocado started in 2014.

There are good reasons to be cautious about online grocery businesses given the complexities that need to be addressed when compared with other online product categories. These include the size and range of the items bought, the differing product temperatures from ambient to frozen, limited shelf-lives and the awkwardness of handling fresh products. Given these challenges, it is not surprising that most grocery retailers chose to fulfill customer orders by using their staff to pick items in store and deliver using local routes. The advantages of this approach are a lower investment risk, quicker implementation and flexibility in scaling up or down according to demand.

Ocado has always believed that this approach is flawed and have spent the last 20 years trying to prove it. Their view is that it is inefficient to move stock into retail outlets and then use store staff to pick and pack prior to deploying local delivery services. Ocado has been on a mission to automate the value chain, removing inefficient human processes and thereby improve the margin achieved for online purchases. Most grocery retailers work on a bottom-line margin of 2-3%, so improving margin for online sales by 1-2% is highly significant – this is what Ocado aims to deliver through its high-tech approach. So, comparing Ocado’s valuation against that for Tesco does not make a lot a sense. It’s apples and pears!

Ocado’s valuation

Whether you believe that Ocado’s valuation is overstated depends on whether you see Ocado as a technology company that does some online grocery retailing or a grocery company that is heavily reliant on advanced technology. Ocado is clear that it is the former, and its growth plans are based on providing proprietary technology and IP to international grocers. UK consumers are advanced users of online retail, and Ocado aims to take them to the next stage by utilising advanced technology and information by developing proprietary robotics and AI.

The rapid increase in the penetration of online grocery shopping, from 8% to 13% of the total market, as a result of the UK Coronavirus lockdown in March has also boosted Ocado’s share price. Its stock market valuation has largely been driven by how investors view its technology, which provides retailers with the infrastructure and software to build their online service and compete with giants such as Amazon.

This is not just a technology jamboree as Ocado has a clear focus on how technology advances will help deliver excellent customer experiences. The focus on customer experience has seen high-tech tools developed to make the ordering process easier and more accurate by, for example, personalising and customising search results by individual grocery buying behaviors.

Ocado can also consider attributes such as seasonality, stock availability and shelf life in refining the information presented to the customer. In its own online grocery business, now in conjunction with M&S, Ocado recognises that the only face-to-face contact customers have with Ocado is through their delivery drivers. They aim to make this part of the operation as customer friendly as possible, with highly accurate order fulfilment and delivery time slot achievement rates which will result in industry-leading customer experience. Ocado believes that controlling the ‘final mile’ is the only way to put its stamp on this key interaction with their customers.

Ocado's increasing share price has been buoyed by their success in striking a number of big technology-based deals with overseas grocery businesses, including Kroger in USA, Casino in France, Sobeys in Canada, ICA Group in Sweden and Coles in Australia.

A shift in shopping habits

UK’s traditional grocers like Tesco, Sainsbury’s, Waitrose and Morrisons are not standing still and have seen significant increases in online grocery purchases since the pandemic hit. Tesco has experienced exceptional online growth and has recently announced it is adding 16,000 permanent jobs, in addition to the 4,000 already created since March. These include 10,000 staff to pick customer orders, 3,000 delivery drivers, as well as a variety of other roles in stores and distribution centres.

This rapid expansion of their capabilities has enabled Tesco to increase their capacity by 69% to be able to handle 1.5 million online orders a week. Impressively, Tesco has scaled up their online business to twice the size of Ocado’s own retail operation in only five weeks. The question that should be asked of Tesco is how profitable and sustainable is this additional revenue? Or are increased revenues matched by increased costs and squeezed margins?

The most recent development in the grocery market is the acquisition of ASDA by Moshin and Zuber Issa. They recognise that the UK grocery market needs transformation and are considering changing ASDA stores to include mini distribution centres for online shopping. Other grocers are considering how to make best use of their properties and we can expect to see more initiatives to support their customers online activities.

Co-authored by Andrew Bryan, Executive Fellow and Programme Director of MSc Strategic Marketing Leadership.

Professor Moira Clark

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Marketing Process Analysis

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• Tesco and Ocado: Competing Online Models
• Technology & Operations / MBA Resources

Introduction to VRIO / VRIN Analysis

EMBA Pro VRIO / VRIN Analysis Solution for Tesco and Ocado: Competing Online Models case study

The online grocery market in the UK is one of the largest in the world. It has many players, but two of the most dynamic are Tesco and Ocado. These two companies have taken markedly different approaches to executing and fulfilling online grocery orders from customers. Tesco has an extensive network of stores and primarily uses these stores as picking locations to prepare and ship customer orders. Ocado has no retail stores, and uses highly automated distribution centers to prepare and ship customer orders. This case describes the UK online grocery market and the two companies; it invites students to consider the differences in the approaches, in which ways they offer advantages to the company and to customers, and ultimately which one is better suited to the UK online grocery market. Learning objective: The objective of this case to develop an appreciation and understanding of the different benefits, costs and constraints of supply chain distribution models. By contrasting two companies that have very different supply chain approaches to competing in the same market, the case leads students to make connections between a company's supply chain strategy and its customer value proposition.

Case Authors : Ralf W. Seifert, Richard Markoff

Topic : technology & operations, related areas :, emba pro vrio / vrin analysis approach to tesco and ocado: competing online models case study.

At EMBA PRO , we provide corporate level professional Marketing Mix and Marketing Strategy solutions. Tesco and Ocado: Competing Online Models case study is a Harvard Business School (HBR) case study written by Ralf W. Seifert, Richard Markoff. The Tesco and Ocado: Competing Online Models (referred as “Ocado Grocery” from here on) case study provides evaluation & decision scenario in field of Technology & Operations. It also touches upon business topics such as - Marketing Mix, Product, Price, Place, Promotion, 4P, . Our immersive learning methodology from – case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Technology & Operations field, VRIO Analysis, case solution, VRIN Solution, Resource based Strategic Management- Value, Rare, Imitation Risk, Organization Competence, and more.

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What is the VRIO framework / model? What are the components of VRIO? Why is VRIO important?

VRIO Framework was first developed by Jay B Barney to evaluate the relative importance of resources to the firm. VRIO stands for – Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence. VRIO is a resource focused strategic analysis tool. Leaders at Ocado Grocery can use VRIO to build sustainable competitive advantage by better understanding the role of resources in Ocado Grocery’s overall business model.

VRIO Analysis of Tesco and Ocado: Competing Online Models

VRIO analysis of Ocado Grocery is a resource oriented analysis using the details provided in the Tesco and Ocado: Competing Online Models case study. Resource-based strategic analysis is based on the assumption that strategic resources can provide Ocado Grocery an opportunity to build a sustainable competitive advantage over its rivals in the industry. This sustainable competitive advantage can help Ocado Grocery to enjoy above average profits in the industry and thwart competitive pressures.

***It is a broad analysis and not all factors are relevant to the company specific. For greater details connect with us.

What is a Resource in VRIO? Classification of Resources for VRIO Analysis.

Resources of an organization can be categorized into two categories - Tangible resources and Intangible Resources. Tangible resources of Ocado Grocery include - physical entities, such as land, buildings, plant, equipment, inventory, and money. Intangible resources of Ocado Grocery are –skill and administrative level of managers, brand names and goodwill of the company, intellectual property rights, copyrights, trademarks, and special relationship with supply chain partners.

The four components of VRIO used in Tesco and Ocado: Competing Online Models analysis are –

Valuable – Is the resource valuable to Ocado Grocery. According to Ralf W. Seifert, Richard Markoff of the case study following are the critical resources that are valuable to the firm - financial resources, human resources, marketing expertise, and operations management.

Rare – "Ocado Grocery" needs to ask is whether the resources that are valuable to the Ocado Grocery are rare or costly to attain. If they are not rare than both present competitors and new entrants will easily able to get access to them and enter the competitive landscape.

Costly to Imitate – At present most industries are facing increasing threats of disruption. According to the data provided in Tesco and Ocado: Competing Online Models – it seems that the core differentiation of the Ocado Grocery is difficult to imitate. On a broader scale – imitation of products of Ocado Grocery can happen in two ways – Duplication of the products of the company, and competitors coming up with substitute products that disrupt the present industry structure.

Organizational Competence & Capabilities to Make Most of the Resources – It measures how much the company has able to harness the valuable, rare and difficult to imitate resource in the market place. The exploitation level analysis for Ocado Grocery products can be done from two perspectives. Is the firm able to fully exploit the potential of the resource, or it still has lots of upside. Often the exploitation level is highly dependent upon execution team and execution strategy of the firm. So exploitation level is a good barometer to assess the quality of human resources in the organization. Capabilities tend to arise or expand over time as a firm takes actions that build on its strategic resources.

VRIO and VRIN of Tesco and Ocado: Competing Online Models

Another extension of VRIO analysis is VRIN where “N” stands non substitutable. A resource is non substitutable if the competitors can’t find alternative ways to gain the advantages that a resource provides. In the VRIO analysis we can include the disruption risk under imitation risk.

Define the four characteristics of resources that lead to sustained competitive advantage as articulated by the resource-based theory of the firm.

The characteristics of resources that can lead to sustained competitive advantage as per the resource based theory of the firm are – Value of the Resources Rareness of the Resources Imitation and Substitution Risks associated with the resources. Organizational Competence to exploit the maximum out of those resources.

How VRIO is Reshaping Business Strategies

For industry specific report please feel free to email us or buy a custom report on - "How VRIO is Reshaping Business Strategies"

5C Marketing Analysis of Tesco and Ocado: Competing Online Models

4p marketing analysis of tesco and ocado: competing online models, porter five forces analysis and solution of tesco and ocado: competing online models, porter value chain analysis and solution of tesco and ocado: competing online models, case memo & recommendation memo of tesco and ocado: competing online models, blue ocean analysis and solution of tesco and ocado: competing online models, marketing strategy and analysis tesco and ocado: competing online models, vrio /vrin analysis & solution of tesco and ocado: competing online models, pestel / step / pest analysis of tesco and ocado: competing online models, case study solution of tesco and ocado: competing online models, swot analysis and solution of tesco and ocado: competing online models, balanced scorecard solution of tesco and ocado: competing online models, references & further readings.

M. E. Porter , Competitive Strategy(New York: Free Press, 1980) Ralf W. Seifert, Richard Markoff (2018) , "Tesco and Ocado: Competing Online Models Harvard Business Review Case Study. Published by HBR Publications. O. E. Williamson , Markets and Hierarchies(New York: Free Press, 1975) Barney, J. B. (1995) "Looking Inside for Competitive Advantage". Academy of Management Executive, Vol. 9, Issue 4, pp. 49-61

Kotler & Armstrong (2017) "Principles of Marketing Management Management", Published by Pearson Publications.

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Ocado Versus Tesco.Com Harvard Case Solution & Analysis

Home >> Finance Case Studies Analysis >> Ocado Versus Tesco.Com

IMD-6-0323 © 2010 Tsikriktsis, Nikos; Keller-Birrer, Valerie

In 2009 several businesses were competing in the United Kingdom for a share of the fast growing on-line grocery store market , using two distinct company strategies. Ocado, an only on-line grocer operated out of a distribution center that is dedicated. By 2009 Ocado had grown from its first three founders to over 3,000 workers and was just about to become profitable. Ocado Versus Tesco.Com Case Study Solution

It faced competition from Tesco.com, the largest on-line grocer in the world. The UK's top supermarket chain, Tesco, had began an internet add-on to its routine company and used existing supermarkets to run its online operations. Learning objectives: This instance compares Ocado and Tesco.com business models from a consumer proposition, operational efficiency, profitability and sustainability perspective. Participants will be challenged to consider the challenges on-line grocers face to match with shoppers’ expectations, how operational choices impact the consumer proposition and what chances both firms need to further grow their company.

Subjects: Online grocery retailing; E-Commerce; E-Business; Supply chain; Customer orientation Settings: U.K.; Online grocery retailing; 3,000 employees ; 2009

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Ocado versus Tesco com Case Solution

Posted by Freddie Murphy on Feb-27-2023

The Harvard Business Review published a case study that primarily focuses on Ocado versus Tesco com. The following case solution has been designed to give the reader an overview about the business world along with a clear understanding of its growth dynamics. Recently, Ocado versus Tesco com has been subjected to strategic as well as managerial problems that require immediate attention so that they can be resolved to allow future growth, expansion, and competitive edge within the marketplace. This case study solution is being written to provide a strategic solution to Ocado versus Tesco com using various appropriate tools and frameworks. Harvard Business Review’s case studies involve a central problem that is faced by a particular company. The problem identified involves strategic and managerial implications for the company. Therefore, it is important for readers to critically identify the problem Ocado versus Tesco com faces. Moreover, it is also essential to highlight the key stakeholders that are impacted and influenced by the problem identified.

External Environmental Analysis

The external environment holds significant importance for Ocado versus Tesco com to ensure that the company is able to respond to all the changes in the macro-environment. This is because Ocado versus Tesco com cannot control the factors and thus can directly influence the company's operations (Indris & Primiana, 2015). The external environment of Ocado versus Tesco com will be assessed using PESTLE Analysis.

A stable political environment provides a favorable market growth trend for Ocado versus Tesco com.

It is important for Ocado versus Tesco com to analyze the pressure groups, and social environment activists. The company can make close collaborations with these groups to achieve company goals (Wang, Wang, & Shi, 2022).

High restrictions on trade and high levels of taxes can contribute to the complex business environment for Ocado versus Tesco com by impacting imports and exports.

Ocado versus Tesco com can benefit from wide-range opportunities in business growth by operating in developing economies (Munro, 2017).

High GDP can determine the long-term growth strategies of Ocado versus Tesco com, signaling the ability of consumers to spend on more products.

Higher rates of interests can provide Ocado versus Tesco com with more investment opportunities.

The flexibility in the labor market allows Ocado versus Tesco com to take advantage of higher workforce productivity.

The selection of appropriate demographic segments has allowed Ocado versus Tesco com to select the right segments of the market that have high growth potential.

The research on gender roles has helped Ocado versus Tesco com to develop and align communication as well as marketing strategies accordingly.

Ocado versus Tesco com has been successful in understanding the norms and cultures of different countries by developing local teams and partnerships (Hueske, Endrikat, & Guenther, 2015).

Technological

The adoption of innovative marketing techniques that involves communication technologies has allowed Ocado versus Tesco com to collaborate successfully with consumers.

The company has stayed ahead in the market, and can significantly increase its market share by placing its major focus on emerging technologies (Akpoviroro & Owotutu, 2018).

Ocado versus Tesco com should maximize its profits by investing in disruptive technologies.

Environmental

It is crucial for Ocado versus Tesco com to adopt effective waste management practices to reduce environmental pollution (J. K, W. J, & D., 2016).

Ocado versus Tesco com should adopt eco-friendly products to establish better relationships with the stakeholders.

Ocado versus Tesco com can take advantage of subsidies offered in renewable technologies to achieve the long-term goal of sustainability.

Ocado versus Tesco com should follow proper laws concerning employee health and safety, and anti-discrimination laws to effectively develop HRM.

Consumer protection laws are also important for Ocado versus Tesco com as it involves the consumer protection from fraudulent marketing (S. Samusenko, S. Plaskova, & A. Prodanova, 2020).

Ocado versus Tesco com can gain a competitive advantage, and can position itself strongly in the market by protecting intellectual property laws.

Porter’s Five Forces Analysis

Threat of new entrants.

It is difficult to achieve economies of scale in Ocado versus Tesco com’s industry, making it a weaker force for new entrants.

There are high capital requirements in the industry. This makes it difficult for new businesses to set up their companies, and compete against Ocado versus Tesco com.

The industry has a strong product differentiation, and heavy investment is needed for customer acquisition. Thus, Ocado versus Tesco com can focus on innovation to differentiate itself from its competitors (H. Th. Bruijl, 2018).

There are strict legal requirements to join the industry in which Ocado versus Tesco com operates, making it difficult for new entrants to enter the market.

Bargaining Power of Suppliers

The bargaining power of suppliers in the industry is weak.

Ocado versus Tesco com operates in an industry with a higher number of suppliers. This means that suppliers do not have much control over their prices.

Standardized products that have low switching costs are provided by suppliers allowing buyers like Ocado versus Tesco com to easily switch their suppliers (Fabbri & F.Klapper, 2016).

Raw materials can be purchased at lower prices by Ocado versus Tesco com. The company can also switch suppliers for more reasonable pricing.

Ocado versus Tesco com can benefit from a variety of suppliers as it can have multiple suppliers for its various geographical areas (Cho, Ke, & Han, 2019).

Bargaining Power of Buyers

The bargaining power of buyers in the Ocado versus Tesco com industry is weak.

There is a high product differentiation in the industry, making it difficult for buyers to switch to alternative firms.

Ocado versus Tesco com can come with differentiated and innovative products to attract more buyers of the industry (Zhao, Zuo, & Wu, 2016).

Buyers of this industry has low incomes. This means they prefer to purchase items at lower prices, making them more price sensitive. Organizations like Ocado versus Tesco com can offer lower prices to attract customers.

Threat of Substitute Products or Services

There are few substitute products available in the industry in which Ocado versus Tesco com operates.

Expensive substitutes are available in the industry of Ocado versus Tesco com, making it difficult for buyers to switch to those substitutes (Aithal, 2016).

Rivalry Among Existing Firms

The rivalry among existing firms is moderate to weak.

There are few competitors in the industry in which Ocado versus Tesco com operates.

A large market share is enjoyed by fewer firms in the industry. This means that more competitive actions will be made to become leaders in the market (Seema, 2016).

The industry in which Ocado versus Tesco com operates has highly differentiated products, making it difficult for companies to win each other customers.

Ocado versus Tesco com can focus on making more differentiated products to gain a strong competitive edge in the market (Zhao, Zuo, & Wu, 2016).

Internal Environmental Analysis

Ocado versus Tesco com can use internal environmental analysis to identify and evaluate the competitive positioning of a company in the business environment. This involves conducting a SWOT Analysis that can help Ocado versus Tesco com to identify the company’s internal strengths, weaknesses, opportunities, and threats (Halmaghi, Iancue, & Băcilă, 2017).

SWOT Analysis

Ocado versus Tesco com has a strong distribution network that has allowed it to make its products available to large customers within the given timeframe.

A strong presence on social media platforms has allowed Ocado versus Tesco com to have a high level of customer engagement (Rizaldi, 2015).

Ocado versus Tesco com has been successful in building a large product portfolio, so unique and distinctive products can be offered to consumers.

Ocado versus Tesco com has a strong brand image in the market.

A low-cost structure of Ocado versus Tesco com has allowed it to manufacture products at lower costs, so they become affordable for consumers to purchase.

The financial position of Ocado versus Tesco com is strong as the company has generated higher profits over the past years (Phadermrod, M.Crowder, & B.Wills, 2019).

Ocado versus Tesco com has invested in the training and development of its employees to keep them motivates, leading to higher efficiency and productivity.

The expenditure of Ocado versus Tesco com on its research and development is comparatively less to other competitors of the market.

Ocado versus Tesco com uses a centralized decision-making process that takes time and reduces operational efficiency (Ahmadi, Dileepan, & K. Wheatley, 2016).

There are high rental costs because Ocado versus Tesco com operates on more of the rental properties rather than purchasing them.

There is no workforce diversification in Ocado versus Tesco com. This makes it difficult for the employees to adjust with the different workers who belong to different backgrounds.

Opportunities

Since the online shopping has increased significantly, Ocado versus Tesco com can take it as an opportunity to expand its online presence.

Ocado versus Tesco com can make use of social media platforms to market its products, with more customers interactions.

Due to more technological developments, Ocado versus Tesco com can make its operations more automated so that overall company costs can be reduced (Ahmadi, Dileepan, & K. Wheatley, 2016).

Globalization provides an opportunity to Ocado versus Tesco com to expand its operations in multiple countries.

Ocado versus Tesco com can enter in a niche market and sell distinctive products to gain a competitive advantage.

The increase in the demand of environmentally friendly goods, Ocado versus Tesco com, can place its major focus on making such products (E.Quezada, A.Reinao, & I.Palominos, 2019).

In recent times, there has been an increase in the bargaining power of suppliers, making it difficult for Ocado versus Tesco com to buy raw materials at lower costs.

Numerous players are entering the industry, posing a major threat to Ocado versus Tesco com.

There has been constant pressure on Ocado versus Tesco com to conduct frequent research to understand the changing customer tastes and preferences (Kolbina, 2015).

Technological advancements require workforce training. This adds to the costs of Ocado versus Tesco com.

VRIO Analysis

Ocado versus Tesco com uses VRIO Analysis to assess and evaluate the company resources to determine the competitiveness, and strategic advantage.

Ocado versus Tesco com has a strong brand image and engages in corporate social responsibility.

Ocado versus Tesco com has a high brand recognition because of the quality of products it offers to its customers (Ariyani & Daryanto, 2018).

The distribution system of Ocado versus Tesco com is valued all round the world. The company has been able to successfully establish strong relationships with its suppliers.

Ocado versus Tesco com focuses on continuous innovation in its business. The company has expanded this innovation in its multiple functional areas.

There are potential growth opportunities in the market, and Ocado versus Tesco com has been able to penetrate the market through its ability to raise large funds.

Ocado versus Tesco com operates globally. This global presence has allowed the company to increase its customer base (Miethlich & G. Oldenburg, 2019).

Ocado versus Tesco com has an organizational culture that promotes more teamwork, innovation, and creativity among its employees, that leads to a competitive advantage.

Since Ocado versus Tesco com has a global presence, it allows the company to easily adapt to different cultures, norms and values.

The risk-taking ability of Ocado versus Tesco com is strong. This provides more opportunities to the company to penetrate different markets.

The inimitable resource for Ocado versus Tesco com is its high-quality products. These products have allowed consumers to make repeat purchases.

Ocado versus Tesco com operates through multiple locations of stores in different companies, allowing easy access to products.

Strong marketing communications have been used by Ocado versus Tesco com to attract more customers.

Ocado versus Tesco com has been using integrated technology that has allowed it to offer competitive pricing to its customers (Ariwibowo, Saputro, & Haryanto, 2021).

Ocado versus Tesco com maintains an excellent customer service that has enabled it to have a high brand engagement.

Organization

Strong financial position has allowed Ocado versus Tesco com to explore more product development opportunities.

Ocado versus Tesco com is successfully maintaining the efficiency and effectiveness of its business operations with the help of more integrated and advanced technology.

Employees are given both in-house and off-the-job training opportunities by Ocado versus Tesco com that allow more skills development (Adnan, Abdulhamid, & Sohail, 2018).

The strong value chain and distribution network has enabled Ocado versus Tesco com to increase its revenue through the sale of its products.

Marketing Mix

Marketing Mix is needed by Ocado versus Tesco com to formulate effective strategies to achieve the company objectives.

Ocado versus Tesco com has five product categories. Each of these categories has a product line that involves more variety of products (Išoraitė, 2016).

Highly differentiated products are offered by Ocado versus Tesco com to its customers. These distinctive products are not easily available at competitors.

The products of Ocado versus Tesco com are of higher quality, and thus, customers pay more prices for these products.

Ocado versus Tesco com designs products with traditional designs giving customers more product variety.

Ocado versus Tesco com offers multiple sizes for its every product to make it easy for its customers to select the right product.

Warranty and same-day delivery option if also provided by Ocado versus Tesco com to its customers.

Ocado versus Tesco com follows a competitive pricing strategy.

To attract more customers, bundle pricing has also been used by the company.

Little higher prices are charged for products that are sold online because of the delivery costs (Thabit & Raewf, 2018).

Optional product pricing strategy is also adopted by Ocado versus Tesco com for some of its products, such as a base product is offered for a certain price, and there are separate prices for its accessories.

Regular promotional prices are also offered by Ocado versus Tesco com to its customers.

Ocado versus Tesco com uses two channels for its product distribution. This includes online selling and through own stores.

There are more than multiple stores owned by Ocado versus Tesco com globally. This ensures easy product availability to customers (Pogorelova, Yakhneeva, & Agafonova, 2016).

Ocado versus Tesco com has partnered with delivery service companies to distribute its products effectively to consumers.

Ocado versus Tesco com has also adopted an omni-channel distribution system.

Ocado versus Tesco com uses a traditional promotional strategy that involves TV advertisements (Fan, Y.K.Lau, & Zhao, 2015).

Social media advertisements are also adopted by Ocado versus Tesco com to increase brand awareness.

Ocado versus Tesco com takes part in various events and exhibitions as a way of promoting its products.

Large sales force is used to provide the customers with a more personal experience.

Ocado versus Tesco com also makes use of influencer marketing to increase the demand for its products.

Regular content and deals are posted on the social media pages of Ocado versus Tesco com to attract and retain customers.

Value Chain Analysis

Ocado versus Tesco com can use Value Chain Analysis to identify and assess inter-relationships as well as interdependencies.

Primary Activities

Ocado versus Tesco com’s primary activities involves the production and selling of products to the final consumers (Mintz, J.Gilbride, & Lenk, 2021).

Ocado versus Tesco com has a strong relationship with the suppliers. This ensures that the product is received, stored, and distributed in a timely manner.

Operational activities of Ocado versus Tesco com are effectively aligned.

For inbound logistics, after the arrival of raw material, the company processes it to manufacture the final product (Hasan, Nekmahmud, & Yajuan, 2019).

In terms of outbound logistics, Ocado versus Tesco com has been able to set up optimal costs as well as efficient delivery processes to deliver the product on time.

Ocado versus Tesco com invests in its sales and marketing activities to build relationships with customers.

Marketing funnel approach is used by Ocado versus Tesco com to effectively devise and build sales and marketing activities.

Ocado versus Tesco com offers both pre-sale and post-sales services to its customers.

Secondary Activities

Ocado versus Tesco com has an effective infrastructure that has allowed the company to successfully optimize its value chain.

The competitive pressure in terms of employee skill development, motivation, and commitment is reduced as Ocado versus Tesco com has developed a strong HRM (Linkov, Carluccio, Pritchard, & Bhreasail, 2020).

Ocado versus Tesco com uses a cost minimization approach to reduce its costs by analyzing the costs associated with training and hiring the employees.

Ocado versus Tesco com has been using integrated technology in its value chain activities. This includes technological customer support, research and data analytics concerning product design, and automated software.

The procurement activities of Ocado versus Tesco com are effectively optimized with its inbound, outbound, and operational activities (Maheswari, Yudoko, & Adhiutama, 2019).

Market Penetration Strategies

Ocado versus Tesco com can increase the capacity of its production so it can reach more of the customers in its existing market.

Ocado versus Tesco com can focus on controlling the overhead costs so that it can offer competitive pricing that can attract customers of the market (Dawes, 2018).

Investments can be made by Ocado versus Tesco com in marketing and sales activities to increase the chances of successful market penetration.

Ocado versus Tesco com can design and develop a content that increases customer engagement within a particular marketplace.

Ocado versus Tesco com can assess and identify more enhanced distribution networks (Radpour, Mondal, & Kumar, 2017).

Improved distribution systems and supply chains can improve the product accessibility for the customers, making it easier for Ocado versus Tesco com to penetrate the market.

Ocado versus Tesco com can adopt price cuts in its products to compete in the market. This will give a company a competitive edge over its competitors.

Ocado versus Tesco com can plan strategies where it can focus on acquiring the leading players of the market. Such acquisitions will give the company an opportunity to reach more customer segments.

Strategic partnerships and joint ventures agreements can be signed by Ocado versus Tesco com to mitigate the risk factors, and to gain customer groups of the market.

Ocado versus Tesco com can come up with new and innovative features in its already existing product for the market (Daouda, Barth, & T. M. Ingenbleek, 2019).

Market Development Strategies

It is important for Ocado versus Tesco com to invest in the research and development department so potential markets can be identified (Hilman, Bohari, & Abdullah, 2018).

Regional expansion strategy can be used by Ocado versus Tesco com for growth purposes. This will also take into consideration the cultural differences.

Ocado versus Tesco com should also consider to expand its business operations in the international market. This will allow access to a larger customer base.

New customer groups and segments should be explored by Ocado versus Tesco com.

Ocado versus Tesco com should also invest in brand-building activities as it will give an opportunity to reach more potential customers (C. Koks & M. Kilika, 2016).

Ocado versus Tesco com should consider the market education in terms of its product. The company can significantly increase its sales by giving product awareness to new segments.

Product Development Strategies

Ocado versus Tesco com can come up with new improvements and modifications in the existing products to attract the market.

Ocado versus Tesco com should undergo the NPD process, so the company is able to assess and identify new points for its customers.

Regular investments in the research and development will help Ocado versus Tesco com to develop something new and innovative that can give a competitive advantage (Kalogiannidis & Mavratzas, 2020).

Ocado versus Tesco com can develop new products by getting into more strategic partnerships.

Diversification Strategies

Ocado versus Tesco com can adopt vertical diversification to develop business. This can be done by adding more products to the existing portfolio (Kalogiannidis & Mavratzas, 2020).

Horizontal integration can also be adopted by Ocado versus Tesco com, where the company can enter into a completely new product development phase that does not exist in the current product line.

Ocado versus Tesco com can also consider to conglomerate by starting a different business.

Based on all the models and frameworks discussed above, it is concluded that Ocado versus Tesco com should focus on widening the existing product portfolio. Moreover, the psychological pricing strategy can be adopted. Ocado versus Tesco com should also maintain close relationships with its suppliers to benefit from lower prices. Similarly, Ocado versus Tesco com should develop more integrated outbound logistics for its perishable items. It is also important to continue producing quality and innovative products, so Ocado versus Tesco com is less affected by the new emerging competition in the industry.

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