Ocado: A Successful Online Grocery Business Model? Harvard Case Solution & Analysis

IMD-6-0322 © 2010
Tsikriktsis, Nikos; Keller-Birrer, Valerie

In the UK several companies were competing in 2009 for a share of the fast growing on-line grocery market, using two distinct business approaches. A just on-line grocer managed out of a dedicated distribution center, Ocado. The business was established by three former investment bankers in the early year 2000. By the year 2009 Ocado had developed from its original three founder to more than 3,000 workers and was just about to become lucrative.

It faced competition from Tesco.com, the largest on-line grocer on the planet. Tesco, the UK's leading supermarket chain, had began an internet add-on to its regular 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 standpoint. Players will be challenged to think about the challenges what opportunities both firms have to further grow their business and on-line grocers face to fulfill shoppers’ expectancies, how operational choices impact the consumer proposal.

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

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