Ocado

By: David E. Bell and Jose B. Alvarez and Damien P. Mcloughlin

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Synopsis: In 2015, U.K.-based Ocado was the world's largest pure player in the online home-delivery grocery business and was gaining a growing share of the highly competitive U.K. grocery market. Ocado had made heavy investments in technology, including a highly automated warehouse operation, intelligent software for efficient order delivery, and a customer-friendly online interface. Ocado's customer base had expanded beyond the wealthy to include middle-income consumers; even with a delivery charge, grocery shopping through Ocado was, in many cases, as affordable as shopping in a retail stores. In 2015 the company was developing a strategy for its Smart Platform, a model in which Ocado would lease its software, hardware, and integration services to brick-and-mortar grocery retailers seeking to build online businesses. Ocado's management believed the Smart Platform, which they planned to market internationally, had the potential to disrupt the global grocery retail market.