Ocado group plan report
Now, various online firms operating in this sector continue to grow their revenue stream. The critical factor behind this growth is because customers who are looking for a convenient way of shopping are increasing every day. Ocado is among the businesses that have thrived due to growth in online shopping. Ocado provides technological solutions to grocery stores across the globe, and with the help of its technology, Ocado has changed the online grocery markets and shopping experience across the world. This paper analyses the Australian grocery sector and looks for an opportunity that Ocado Group can utilise if it enters into a partnership business deal with an Australian third party. Presently, Ocado has continued to grow in terms of the number of clients and the partnership deals.
Ocado’s technology is advanced and updated every time, thus it continues to meet the customers’ shopping needs. Also, grocery is among the most prominent retail segments that are going online today, and the ever-growing use of smartphones in shopping is creating new opportunities for this sector. Ocado is in an excellent position to utilize these opportunities for the benefits of its shareholders, customers, and partners. By partnering with world-leading retailers, Ocado has successfully become the most significant player in the grocery retailing market. 90 million (Ocado Group 2018, p. Also, the operating net income declined in 2017 and 2018, as shown in figure 3. An increase in the costs such as administrative and selling costs was a factor behind the decline in the net income in spite of its increase in revenue.
Figure 3: Five Year Financial Summary of Ocado Group For the past five years, the sales and revenue of Ocado have been increasing. However, reports indicate a change in this years’ financial performance of Ocado due to improvement in the technological capabilities of the firm. Apart from that, its increased FDI inflows and a robust domestic demand provides cushion to the Australian economy, especially during the economic crisis. The Australian population is growing fast due to its high fertility rate, and a conducive age structure as well as reasonably favourable immigration policies. In spite of the robust economic status, Australia faces some challenges like carbon emission problems. To understand more about the Australian business environment, PESTLE will be an essential tool. PESTLE Analysis What happens in Australia revolves around six key factors: politics, society, economy, technology, environmental, and legal issues.
uk 2019: Political Overview, para. There are two mainland territories: the Northern and the Australian Capital Territory, which have self-government systems. The power of legislature lies in the hands of the Parliament, which is made up of the Queen and the Two Houses. Notably, the government is very transparent when it comes to changes, thus making is effective, reliable, and highly supported by the citizens. Australia is connected to various international organisations. So, the business has to check the applicable and relevant provisions that may impact their operations. Overall, The political atmosphere of Australia is favorable and reliable for business operations. Economic Position Economically, Australian has been among the most stable for the past two decades, having endured an economic recession for 27 years now.
The “Australian population is 25. 2 million while its GNI per capita is (US$)53,190, and it is under the high-income category” (World Bank Group 2019, p. 835% (World Bank Data 2019). As shown in Figure 5, the GDP growth rate has been fluctuating since 2015. Based on the trend in the graph shown in figure 5, in 2019, the GDP is expected to drop slightly and start picking up from 2020. The trade relationship between the UK and Australia has been stable and reliable for years. According to Gov. Notably, half of the total value of trade between the two countries was service with service trade of travel, transportation, and financial services leading. The second-biggest foreign investment source and destination of Britain is Australia. In 2018, Australia was among the source of foreign investment leading to the creation of more jobs.
Thus, Australia is favorable to invest in any UK firm. Social Overview Current Australia’s population is 25. 6% of the total population. The least number of people are of age bracket 55 to 64 years, thus making approximately 11. 6% of the entire population. The distribution of the whole population is, as shown in figure 7 below. Figure 7: Age Distribution Australia is also a multicultural and multiracial society made up of three social classes. Types of devices used Purchase of goods and services was the among the top two prevalent activities that families who access internet were doing. The purchase of goods and services grew from 60% between 2014 and 2015 to 70% between 2016 and 2017 (figure 9). Figure 9. Reasons for internet use Therefore, Australia is well known when it comes to technological innovation.
It continues to adopt new technology more than other countries with similar standing today. 1), carbon emission continues to rise, and it has become a major environmental problem in Australia. According to Cox (2019, para. 1), emission increase in sectors like transport have cancelled a decrease that was witnessed in the electricity sector, thereby leading to no change in the emission levels. The Australian government has put various policies towards addressing this issue. Also, the green gas emission has been rising since 1991 (figure 10). It is because it will boost the confidence of its investors in supporting the decision to enter into a deal with third parties in Australia. Another opportunity politically is that through “UK Export Finance, the government provides finance and credit insurance to back up its exports to Australia” (Gov.
uk 2019, UK Export Finance). In that case, it may help Ocado in terms of insurance coverage. However, its liberalisation with other countries like China is a threat as it may attract new businesses. Technology is also another opportunity. Australia is good at adopting new technology. Tablets and desktops are among the top two gadgets used by families that access the internet. Besides that, the second most activity by internet users is the purchase of products. It presents significant business opportunity because as many Australians use the internet for shopping, Ocado will be able to serve more customers online and fulfill orders through its CFCs. Rivalry of the Existing Competitors The Australian grocery sector has high competitiveness. The stiff competition is between three key players: Woolworth, Coles, and Aldi.
After several years of price wars, these top three competitors “changed their strategy from price-driven to quality-driven approach to attract their customers”(Azeem et al. 2019, p. The 2018 market share of the Australian grocery sector is, as shown in figure 11. The reason is that Australians appreciate new innovative tech-based services, and goods, which offers Ocado's move an added advantage. However, Ocado has to continue innovating new services and coming up with new tech while in partnership with Australian grocery to avoid its customers defecting to the competitors. Threats of Substitute The threat of substitutes is minimal because Ocado offers a value proposition, which is not exclusively different from the current offering in the grocery sector in Australia. However, a way that Ocado can handle this threat is by emphasizing on making their customers understand the benefits and reliability of their online services.
Also, it can increase switching costs and put effort into focussing on the customer needs than what they are buying. 2019, p. However, Ocado’s capability to identify game-changing innovative ideas on the tech sector and swiftly responding and exploiting any emerging opportunity is essential behind its success within the grocery retailing sector (Mason 2019, p. Hence, Australia a crucial opportunity for Ocado’s business future. References Australian Bureau of Statistics. Household Internet Access. , Mounter, S. and Griffith, G. Food shoppers’ share of wallet: A small city case in a changing competitive environment. Journal of Retailing and Consumer Services, 43, pp. Business. Ocado Group PLC. Available at: https://markets. ft. com/data/equities/tearsheet/financials?s=OCDO:LSE. (Accessed on 04 Nov 2019) Gov. Mason, R.
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