HomeResearch & Knowledgeback to HomeOperationsback to Research & KnowledgeOcado versus tesco.comback to Operations

Case Study

Ocado versus tesco.com

By Nikos Tsikriktsis and Valerie Keller-Birrer

7 pages

March 2010

Reference: IMD-6-0323

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 Objective

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.

Keywords

Online Grocery Retailing, eCommerce, eBusiness, Supply Chain, Customer Orientation, Production Management, Operations Management

Settings

United Kingdom
Ocado, Information Technology, eCommerce, Consumer Services, Retail
2009

Type

Published Sources

Available Languages

English

Related material

Teaching note

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

This case study is part of a series

Ocado versus tesco.com
Tesco and Ocado: Competing online models
Tesco and Ocado: Contrasting online grocery supply chain models

This case study is part of a series

Ocado versus tesco.com
Tesco and Ocado: Competing online models
Tesco and Ocado: Contrasting online grocery supply chain models

Keep reading

Case Study

Metalshub: A steely approach to launching a B2B metal trading platform

Few Business to Business (B2B) marketplaces have succeeded. Metalshub has successfully combined a software platform as a service, with a marketplac...

Business to Business Digital Disruption Economics Operations Strategy

By Didier Bonnet, Geoffrey G. Parker, Charles E. Hutchinson and Lisa Simone Duke

Case Study

Galeneo Health: Scaling the hospital@home platform

MADRID (SPAIN), MARCH 2023. Jaime Garcia-Prieto, founder and CEO of Galeneo, was polishing the deck for the fundraising for his healthcare start-up...

Digital Transformation Disruption Entrepreneurship Operations Sustainability

By Benoit F. Leleux

Case Study

Patagonia: Can circularity and sustainability win together? (Mini case)

Although Patagonia is not a player in the luxury segment per se, its track record in achieving circularity speaks volumes to luxury brands in terms...

Sustainability Operations Strategy

By Stéphane J. G. Girod and Martin Králik

Case Study

Pandora: Mastering the success factors of circular supply chains (Mini case)

Jewelry manufacturer and retailer Pandora is one of the largest jewelry players in the world. One of the key programs in Pandora’s circularity effo...

Sustainability Global Business Operations

By Stéphane J. G. Girod and Martin Králik

Article

Unpacking errors in organizations as processes: Integrating organizational research and operations management literature

Error research in organizational science (OS) and operations management (OM) has increased in volume, scope, and theoretical and methodological sop...

Organizational Behavior Operations

By Zhike Lei and Eitan Naveh

in Academy of Management Annals

July 2023, vol. 17, no. 2, pp. 798-844, https://doi.org/10.5465/annals.2021.0066

Case Study

Pioneering customer experience transformation in Saudi Arabia’s Ministry of Human Resources and Social Development

The Human Resources and Social Development Ministry (HRSD) was one of the largest and most important ministries in Saudi Arabia, with 22,000 employ...

General Management Human Resources Leadership Marketing Operations

Best-selling Case Study

By Goutam Challagalla, Mahwesh Khan and Pallivathukkal Cherian Abraham

UrbanLuxe Cosmetics: Embracing S&OP/IBP

By Ralf W. Seifert and Richard Markoff
Case reference: IMD-7-2572 ©2024

Summary

The case is seen through the eyes of the newly appointed supply chain director at a cosmetics company based in Berlin. The general manager has tasked the new supply chain director to provide bold process recommendations to improve the poor service, high inventory and rampant use of overtime. To understand the issues at play, the supply chain director meets with the CFO, the factory manager, the chief procurement officer and chief revenue officer and their feedback constitutes the body of the case. Each individual offers a different perspective, though none take any responsibility. The CFO is unhappy with the high inventory levels. The factory manager feels helpless in the situation. The chief procurement officer is proud of the savings he has generated by shifting to Asia. The chief revenue officer appears altogether disinterested and not concerned by the problem. The supply chain director must integrate this feedback and propose a new process that will address the performance shortcomings, define the roles and responsibilities of each, along with KPIs to monitor progress.

Reference IMD-7-2572

Organization UrbanLuxe Cosmetics (Invented name)

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Operations

Strategy

Browse all topics

Metalshub: A steely approach to launching a B2B metal trading platform

By Didier Bonnet Geoffrey G. Parker Charles E. Hutchinson and Lisa Simone Duke
Case reference: IMD-7-2457 ©2024

Summary

Few Business to Business (B2B) marketplaces have succeeded. Metalshub has successfully combined a software platform as a service, with a marketplace matching supply and demand for raw materials used in the Metals and Mining industries. Through innovative pricing and business models, the company has managed to scale its operations in a short timeframe.

Reference IMD-7-2457

Organization Metalshub

Industry Materials, Metals and Mining

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Business to Business

Digital

Disruption

Economics

Operations

Strategy

Browse all topics

Galeneo Health: Scaling the hospital@home platform

By Benoit F. Leleux
Case reference: IMD-7-2496 ©2023

Summary

MADRID (SPAIN), MARCH 2023. Jaime Garcia-Prieto, founder and CEO of Galeneo, was polishing the deck for the fundraising for his healthcare start-up. The seed round of €1 million would take him to the institutional A round scheduled for Q3-2024, a comfortable 18-month+ runway. His proposal to decentralize healthcare through a tech-enabled hospital@home platform offered the solution people were looking for not only in Spain but also in most advanced economies. According to a recent Economist article, the NHS, like many healthcare systems, had become a sickness service, not a health service. To live up to the promise of its name would require a shift in focus, away from hospitals to the community, from centralized treatment to community-based prevention and bedside medicine. In other words, health systems needed to be investing in smoke alarms, not fire extinguishers. In 2020, as the Covid pandemic began, Jaime envisioned the future of in-home care for patients with chronic treatment needs. In 2021, he embarked on developing a platform to coordinate bedside medical care anywhere, anytime, in minutes. Galeneo was born. By 2023, it had integrated 200+ healthcare providers (HCPs) and 11+ institutional partners in the Madrid region, enabling the provision of general high-value services outside hospital. Revenues of €1.6 million in 2023 were expected, with a growth rate of about 8% every month and net profit breakeven reached in February. Things looked positive, but there were issues around scaling fast – although Jaime had found solutions. To counter the limited availability of qualified healthcare workers, he developed the Galeneo Academy to train future in-home bedside specialists. Tech-enabled standardization reduced operational complexity through an easy-to-use app and included real-time monitoring and quality control. Finally, the whole concept of community-based bedside medicine was still nascent, which meant market participants needed to adopt original approaches. But it was a large market with great potential.

Reference IMD-7-2496

Organization Galeneo

Industry Healthcare, Health and Medical Services

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Digital Transformation

Disruption

Entrepreneurship

Operations

Sustainability

Browse all topics

Patagonia: Can circularity and sustainability win together? (Mini case)

By Stéphane J. G. Girod and Martin Králik
Case reference: IMD-7-2525 ©2023

Summary

Although Patagonia is not a player in the luxury segment per se, its track record in achieving circularity speaks volumes to luxury brands in terms of what a more mass-market brand is prepared to achieve in the circularity space and on its implications. Patagonia has discouraged overproduction and overconsumption, consistently working to create products that would never end up in a landfill. The main tenets of the company’s approach were called the five Rs. Reduce: Don’t buy what you don’t need. Repair: Fix items that still have life in them. Reuse: Sell or pass clothing on. When you’ve exhausted those options: Recycle. The last tenet, Reimagine, was a pledge to “take only what nature can replace.” Early on, Patagonia executives began investigating how they could encourage customers to reuse older clothing items that were not worn or no longer fit. Nevertheless, studies on textile circularity in general have pointed out that the practice has yet to establish sustainable economies. Large-scale reuse, repair and recycling have typically been hindered by high transportation, labor and processing costs as well as the decreasing quality and cost of new products. Furthermore, notwithstanding its status as the clothing industry’s beacon of sustainability – and billing itself as “in business to save our home planet” – Patagonia has never shied away from pursuing a high-growth, for-profit business model.

Reference IMD-7-2525

Organization Patagonia

Industry Consumer Goods, Apparel and Fashion

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Sustainability

Operations

Strategy

Browse all topics

Related topics

Sustainability

Global Business

Operations

Browse all topics

Related topics

Sustainability

Operations

Browse all topics

Unpacking errors in organizations as processes: Integrating organizational research and operations management literature

By Zhike Lei and Eitan Naveh
in Academy of Management Annals July 2023, vol. 17, no. 2, pp. 798-844, https://doi.org/10.5465/annals.2021.0066

Summary

Error research in organizational science (OS) and operations management (OM) has increased in volume, scope, and theoretical and methodological sop...

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Organizational Behavior

Operations

Browse all topics

Apple’s supply chain transformation

By Carlos Cordon and Nick Georgiev
Case reference: IMD-7-2451 ©2023

Summary

In 2022, Apple lost US$1.5 billion in Black Friday sales due to iPhone supply constraints. One in three retail stores across the US and Europe expe...

Reference IMD-7-2451

Organization Apple

Industry Consumer Goods, Consumer Electronics

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Operations

Strategy

Browse all topics

Pioneering customer experience transformation in Saudi Arabia’s Ministry of Human Resources and Social Development

By Goutam Challagalla Mahwesh Khan and Pallivathukkal Cherian Abraham
Case reference: IMD-7-2403 ©2023

Summary

The Human Resources and Social Development Ministry (HRSD) was one of the largest and most important ministries in Saudi Arabia, with 22,000 employ...

Best-selling Case Study

Reference IMD-7-2403

Organization Ministry of Human Resources and Social Development

Industry Services, Government Administration

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

General Management

Human Resources

Leadership

Marketing