Assignment Sample on Management and Strategy
Main Body
1. Introduction
In the Rapid increase of globalization, it becomes important for every business organization to enhance their productivity and to compete easily in the rivalry market. However, certain challenges halt business production that becomes trouble for them to overcome easily. The challenges are related to the competitive market, integrity, balancing business loyalty, and even a lot more. Thus, businesses along with their employees are observed to be capitalizing they are downturn and slowly helping the organization to achieve their set goals. Decision-making is considered to be one of the important aspects of the business organization that helps them overcome any sort of gap present in their working environment. On the other hand, certain business challenges can be observed in OCADO RETAIL LIMITED.
Challenges needs to overcome
Challenges like customer loyalty have become major business contexts that need to be considered to get success in the long run. Analysing the right marketing channel is the key to reach success in the business future (Leonidou and Hultman, 2019, p.25). Thus, it becomes crucial for the business management to understand the actual needs of their customers and to deliver the right products accordingly. However, it is also important to follow the rules set by the government to avoid threats in the business operation.
Background of the company
OCADO RETAIL LIMITED is considered to be one of the largest online home delivery grocery platforms that have been serving their customers for over 20 years. The company was founded in the year 2000 and with a partner with Waitrose. On the other hand, they started their delivery services in the year 2002. Furthermore, they launched their first app for online retail business in 2009 that will help their customers to order groceries from anywhere in the states of the UK. The company also produces its groceries and is considered to be having the largest supply chain in comparison to its competitors. The company has a net income of £69.6 million that has been recorded in the year 2020 (ocadoretail.com, 2021). They also have an operating income of £95.8 million and revenue of £2331.8 million.
Current situations
In the ongoing service of the Ocado retail business, certain challenges have been observed in the business. The management is facing issues related to the current global pandemic of Covid-19 and it becomes trouble for the management to overcome easily. Additionally, half the grocery business there is significantly low in comparison to their last year’s performance (ocadoretail.com, 2021). On the other hand, an increase in the competitors is also observed to be the second big challenge for the company. Thus, the management is planning to create a framework that will help them to understand their current challenges. This Framework will be understood with the help of PEST analysis, SWOT analysis, and even the VRIO framework.
Purpose of the work
The purpose of this work is to understand several challenges that are being faced by Ocado Retail Business in their daily business operation. The business was observed to be facing challenges like an increase in the number of competitors, Brexit issues, environmental challenges, and even challenges like Global pandemic. This assessment will help to understand the environmental analysis of the company Ocado Retail Business with the help of PESTLE analysis. Furthermore, this study has focused on the key drivers of change by analysing the opportunities as well as the threat. On the other hand, VRIO Framework has been discussed that will help to understand the capability of the value chain in the business (Diez-Martin et al. 2019, p.2839). Finally, this study will end with a conclusion that will include strategic options that Ocado Business needs to prepare for uplifting their business operations and blinking new level strategies.
Purpose statement
According to the CEO of OCADO RETAIL LIMITED, the purpose of the statement was observed that the business lost around 10% of their capacity in the current year. Furthermore, they are planning to put each area of the business to be better and grow bigger in the upcoming year. There are also plans to scale their executive partners but the main challenge that was observed was velocity in the operation. On the other hand, they have developed technologies that have provided an additional advantage to scale their business from medium to long-term business.
2. Environmental analysis
External environmental analysis is considered to be one of the important concepts that help a business to understand their external key drivers that disrupt their business operation. Thus, it becomes crucial for every business to understand the external factors and to come up with strategic options that will allow them to continue with their business productions easily (Perera, 2017, p.25). Furthermore, this environment analysis can be easily understood with the help of PESTEL analysis. This study will help to understand 3 PESTLE key drivers based on the level of impact in the OCADO RETAIL LIMITED.
3 PESTLE key drivers of change
Political factors
The political factor is observed to be playing an important role for the business. However, these political factors have become a major challenge for the business to maintain its stability in the long run. Ocado Business is facing issues like government regulations, government budget, and even Judiciary independence that has become troublesome for the business to enjoy their business opportunities (Morgan et al. 2019, p.4). Furthermore, Changes in taxes rate in both national, as well as local level governments, have led to an upward push of the inflation rate in the states of the UK.
Economic factors
In the states of the UK, it is observed that the financial markets have put a negative impact on the retail business that uplifted the price fluctuations. The inflation rate was observed to be at 1.5% that is recorded in the year 2021(statista.com, 2021). The price rate of groceries is continuously increasing and that has become major trouble for the business to sell their products easily in the market (AKMAN, 2020, p.93). Furthermore, it is also challenging to improve brand loyalty and to manage stability under such conditions.
Social factors
The taste and preferences of the customers are often observed to be changed over time. This has become a major challenge for the management of OCADO RETAIL LIMITED to rebel against such pressure groups. Furthermore, the business also needs to follow the health and safety act set by the government of the UK.
Representing opportunities and threats
The above three factors will help to understand the trend analysis according to their level of impact. The political and economic factors were observed to be a threat for Ocado Retail Business. However, the social factor will be helpful and might be considered as opportunities if businesses try to understand their customers’ needs and serve them accordingly.
2 highly key drivers of change
Customer base
A solid customer base is considered to be a viable point that the management of Ocado Business can concentrate on to improve their business operations (Düerkop and Huth, 2017, p.14). It will be helpful for the business if they understand the needs of customers that will help them to increase.
Branding and strategies
Branding and strategies act as a middleman between the customer and the respective business. Thus, OCADO RETAIL LIMITED needs to come up with strong branding propositions that will help them to increase their market recognition and to improve their operational efficiencies.
Industry analysis
Porter’s five forces
The Porter 5 forces is a tool that is used to understand competitive markets and to analyse business environments.
Rivalry threat: Ocado Needs to identify the competitive markets that will allow them to straighten their business opportunities (Diez-Martin et al. 2019, p.2839). This is the key that will help them to attract customers with the help of cost reduction and delivering quality products.
Supplier power: The management needs to stick with several suppliers that will enable the business to achieve their products or raw materials at a low cost. Furthermore, this fact will help the business to provide cheaper products in the rivalry market.
Buyer power: Customers are often observed to be purchasing their products from the business where the prices are low (Shtal et al. 2018, p.25). Thus, Ocado need to conduct a market survey that will provide them opportunities to sell their products in a low cost in comparison to their competitors
Substitute products: substitute products often create trouble for an existing business. Thus, analysing the market and delivering unique products will bring additional advantages and an opportunity to grow evenly.
New entry threat: The position of existing business gets affected due to entry to new business in the market (Bruijl, 2018, p.25). Thus, it might be a threat for OCADO RETAIL LIMITED to grow firmly in the long run. Thus, the management needs to develop a strong customer base to compete easily in the market.
3. Capability analysis
The nature of management and strategy describes the detailed planning and analyzing the phase of required business strategy to revive the level of management of an organization. This assessment of management and strategy focuses on one of the famous online retail shopping points of the UK, OCADO RETAIL LIMITED. Regarding the phase of identifying the workable strategic plan of an organization, proper assessment of the existing strategic capability of that organization plays an important role (Prasetyo, and Dzaki, 2020, p.756). The below section is going to represent the strategic capability of OCADO RETAIL LIMITED by using the VRIO analysis:
Identify strategic capabilities
The strategic capability of an organization explains the approach of an organization to use their internal resources and competence to improve their market competition level in the external business environment. To determine the strategic capability of the specific online retail shopping organization application of the value chain strategic capability analysis plays an important role. The internal activities of the business organization related to their goods and services production procedure. The strategic management insights of this organization can apply the strategic tool of the value chain to obtain their production efficiency (MacIntosh, & MacLean, 2015, p.69). The stranded aspect of the value chain describes five different parameters of an organization such as; inbound logistics, operations, outbound logistics, marketing and sales, and service. The retail firm OCADO RETAIL LIMITED needs to develop its business market scale to improve its inbound and outbound logistics. High-level business competition from different online business firms in the UK, such as; Amazon can create a negative impact on their market and sales sector. Besides that effective brand range of this organization adds value to their service sector. This assessment is going to incorporate VRIO criteria to optimize the value chain strategic capability of OCADO RETAIL LIMITED.
Apply the VRIO criteria
The model of VRIO helps to analyze the value chain of an organization by optimizing four categories of that business organization as; value, rareness, imitation, and organizational competence. The application of the VRIO tool is able to identify the quality of resources production of OCADO RETAIL LIMITED of the country UK. The strategic capability helps to create an opportunity for this retail firm to design a sustainable business developing environment over their rival organizations.
| Resource factor | Value of resource | Rareness | Imitation | Organizational competence |
| Market presence | Yes, | Yes, | No, | Yes, |
| Business expertise | Yes, | No, | Yes, | Yes, |
| Customer segment | Yes, | Yes, | Yes, | Yes, |
| Product line management | Yes, | Yes, | Yes, | Yes, |
| Extension of the business brand | Yes, | No, | No, | Yes, |
Table1: VRIO analysis of OCADO RETAIL LIMITED
(Source: Self-created)
The market presence in the local and international field of online grocery can add value to their business. A strong market presence can create a rare business vision. Direct imitation is not possible of market presence strategy. This application is level up the business competitive advantage. The business expertise differentiation in the business production phase adds market value. Most big online firms can use this strategy, so this is to rare value addition. The imitation of product quality and price-related strategy can be imitated (Miethlich, and Oldenburg, 2019, p.9). The unique product differentiation can improve the business’s competitive level. The development of the strategic customer segment increases the business value. This value addition phase is rare, due to each of the organizations uses a unique strategy for customer segmentation. Imitation of the customer segmentation strategy is not possible. Integration of customer segment quality increases business competence.
The incorporation of various grocery products can help OCADO RETAIL LIMITED to develop their business value. The addition of a unique product line can create a rare business value for the company. Sometimes, imitation of grocery product chains can be possible by their rival group. The development of the product line strongly supports the increment of business competence. For reducing the pressure of niche market business pressure brand extension strategy can help this online grocery form to add value in their business. This strategy is not rare, due to the brand extension strategy has been used by mostly all of the medium and large retail firms (Luthans, and Doh, 2018, p.93). The business brand expansion can create market development opportunities.
Discuss the competitive implications
The concept of the competitive implication of the business management and strategy helps to access the business innovation and differentiation approach for the OCADO RETAIL LIMITED. The above discussion reflects the business value addition procedure for this online retail group of the country UK. The above value chain VRIO analysis requires a brand extension strategy for the OCADO RETAIL LIMITED, UK. Accessing the current business position of this firm it has been observed that application of this business strategy can increase their market strength level. The evaluation of the business strengths of this organization is able to access the improved pricing and product quality related to the strong point of this organization (Buzatu et al. 2019, p.247). This strength has been also supported by the above VRIO value chain analysis. Besides that, small boundary market of OCADO RETAIL LIMITED, UK is one of the major weaknesses of this firm at the time of business globalization. This factor has been considered in the value chain analysis and provides the business expansion strategy recommendation for this online retail firm. For omitting the imitation issue of this value addition OCADO RETAIL LIMITED can use an inimitable brand extension strategy.
4. Proposed strategy
The value chain analysis plays an important role in the strategic capability states of the business organization OCADO RETAIL LIMITED, UK. The previous discussion helps to optimize the strengths and weaknesses of the company. To recommend an effective business market development strategy of the firm analysis of the micro organization of that company plays an essential role. The resultant SWOT and business strategic option for OCADO RETAIL LIMITED, UK is going to discuss below:
SWOT resultant
The SWOT analysis helps to optimize the internal business environment of an organization. This management and strategic analytic frame evaluate four business parameters such as; strengths, weakness, opportunities, and threats (refer to appendix 1).
| Strengths | Weaknesses |
| ● The impressive business technical platform on online retail.
● Partnership with retail giants (ocadoretail.com, 2021). ● Brand expansion. |
● Business operational dependency (ocadoretail.com, 2021).
● Bounded in a small-scale market. |
| Opportunities | Threats |
| ● Investment in business expansion.
● Online sector technical enhancement. |
● High-; level of business competition.
● The negative impact of Brexit in the UK market. |
Table2: SWOT analysis of OCADO RETAIL LIMITED, UK
(Source: Self-created)
The resultant SWOT analytical framework of the OCADO RETAIL LIMITED, UK helps to understand the strong technical exposure of this organization to manage their online retail chain. Lack of presence in the global market can create a business developing weakness for this firm (Vlados, 2019, p.33). According to the current market context of the UK, this online retail firm has an effective opportunity to invest in their business resource development. The business threats for the online retail sector of the UK can reduce the strategic position of the online retail business management firm OCADO RETAIL LIMITED, UK.
Strategic options
The strategic option analyzing phase is one of the important sections of this market and strategy assessment. This section is to recommend a suitable business and market-level development practical strategy for the OCADO RETAIL LIMITED, UK by analyzing the previous information of macro, micro, and value chain of this company. The below section is going to prose the business-level strategy for this firm:
The business-level strategy
According to the current business context of the OCADO RETAIL LIMITED, UK business-level strategy can help this firm to devise their market viable strategy. This online business firm can use a business strategy development approach to reduce the high level of market competition and economic decline issues of the global market. The below section is going to highlight the strategic application of Porter Generic strategy for this organization to level up their business strategic position:
Business-level strategy: Porter’s generic strategies
The porter Generic strategy suggests four different business development approaches such as cost leadership, differentiation, cost focus, and differentiation focus.
The cost leadership approach describes the strategic investment vision of an organization by strategically using their business capital and cutting costs from the business logistic and production operation. The differentiation strategy focuses on the application of innovation in the pricing, product, and service quality of their brand (Mungai, and Ogot, 2017, p.148). The cost focus strategy only focuses on the business cost reduction policy and differentiation of the product quality of the company. For managing the threat of Brexit and utilizing global business investment opportunity, online retail firm OCADO RETAIL LIMITED, UK can use the cost leadership strategy and manage their operational cost strategically. Besides that, the value chain context of this organization indicates the requirement of pricing and product quality differentiation strategy. For supporting this business aspect OCADO RETAIL LIMITED can use the differentiation approach of the Porter generic strategy model.
Linking the proposed strategy with the business introduction of this online retail firm
The proposed strategy of cost leadership and business differentiation section of Porter’s generic strategy model can help the OCADO RETAIL LIMITED to omit their present business market challenges. The application of cost leadership is able to use the global business investment opportunity of this organization and break their traditional home-delivery basis business image. This aspect helps to overcome the issue of small-scale business presence challenges of this company. The proposed strategy of cost leadership capitalized on the business expansion strengths of this; in the retail sector of the UK. The strategy of business price and product differentiation helps to utilize the current business resources of OCADO RETAIL LIMITED to enrich their business level in the country UK. According to the introduction section, it has been observed that this organization follows the business purpose of improving customer experiences and provides a high-level shopping solution (Lauer, 2019, p.57). Regarding this aspect, the proposed product and pricing differentiation business-level strategy can help this firm to achieve its business purpose successfully.
OCADO RETAIL LIMITED is considered to be one of the largest retail businesses in the states of the UK. However, certain external factors were observed to weaken the business framework and affect its favourable position in the rivalry market. The political factors are acting as a threat for the business to overcome easily. Additionally, an increase in the competitive market and environmental factors are the other two impacting the business externally. These factors are observed to be halting business production and even interrupts them to achieve their organizational set goals. Thus, this became important for the management to overcome such threats and to Foster their business widely.
5. Referencelist
AKMAN, M.K., 2020. DEFENCE MANAGEMENT AND PESTLE ANALYSIS. ANTE PORTAS, p.93.
Bruijl, G.H.T., 2018. The relevance of Porter’s five forces in today’s innovative and changing business environment. Available at SSRN 3192207.
Buzatu, A.I., Pleșea, D.A., Iulian, C. and Valentin, W.P., 2019. Managing organizations for sustainable business development: Interaction between VRIO framework and Mckinsey 7s framework. New trends in sustainable business and consumption, pp.243-251.
Diez-Martin, F., Blanco-Gonzalez, A. and Prado-Roman, C., 2019. Research challenges in digital marketing: sustainability. Sustainability, 11(10), p.2839.
Düerkop, S. and Huth, M., 2017. Transportation under Threat–A PESTLE Analysis for Critical Logistical Infrastructures. ICTA2017, p.14.
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ocadoretail.com, 2021. About OCADO RETAIL LIMITED. Available at: https://ocadoretail.com/. [Retrieved on 9th April 2021]
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statista.com (2021) News available from https://www.statista.com/statistics/306720/cpi-rate-forecast-uk/ [accessed on 25th March 2021]
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