Case Study

Tesco and Ocado: Competing online models

7 pages
January 2018
Reference: IMD-7-1975

The online grocery market in the UK is one of the largest in the world. It has many players, but two of the most dynamic are Tesco and Ocado. These two companies have taken markedly different approaches to executing and fulfilling online grocery orders from customers. Tesco has an extensive network of stores and primarily uses these stores as picking locations to prepare and ship customer orders. Ocado has no retail stores, and uses highly automated distribution centers to prepare and ship customer orders. This case describes the UK online grocery market and the two companies; it invites students to consider the differences in the approaches, in which ways they offer advantages to the company and to customers, and ultimately which one is better suited to the UK online grocery market.

Learning Objective
  • The objective of this case to develop an appreciation and understanding of the different benefits, costs and constraints of supply chain distribution models.
  • By contrasting two companies that have very different supply chain approaches to competing in the same market, the case leads students to make connections between a company’s supply chain strategy and its customer value proposition
Keywords
Supply Chain, Omnichannel
Settings
Europe, United Kingdom
Ocado, Tesco, Information Technology, eCommerce
2017
Type
Published Sources
Copyright
© 2018
Available Languages
English
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Tesco and Ocado: Contrasting online grocery supply chain models
By Ralf W. Seifert and Richard Markoff
Case reference: IMD-7-2553 ©2024
Summary
E-commerce as a share of retail continues to grow, accelerated by the pandemic. This is particularly true of the online grocery market. As one of the largest online grocery markets in the world, the UK has many players, but two of the most dynamic are the market leader – Tesco – and Ocado. These two companies have taken markedly different approaches to executing and fulfilling online grocery orders from customers. Tesco has an extensive network of stores and primarily uses them as picking locations to prepare and ship customer orders. Ocado has no retail stores and uses highly automated distribution centers to prepare and ship customer orders. This case describes the UK online grocery market, the two companies and invites students to consider the different approaches: In what ways do they offer advantages to the company and customer and, ultimately, which one is better suited to the UK online grocery market?
Reference IMD-7-2553
Copyright ©2024
Copyright owner IMD Copyright
Organization Ocado, Tesco
Industry Information Technology, eCommerce;Consumer Goods, Food and Beverage
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications