Case Study

Tesco and Ocado: Contrasting online grocery supply chain models

9 pages
February 2024
Reference: IMD-7-2553

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?

Learning Objective
  • Develop an appreciation and understanding of the different benefits, costs and constraints of supply chain distribution models.
  • Contrast two companies with very different supply chain approaches to competing in the same market.
  • Understand the clear connections between a company’s supply chain strategy and the customer value proposition.
Operations, Supply Chain, Omnichannel, eCommerce
Europe, United Kingdom
Ocado, Tesco, Information Technology, eCommerce, Consumer Goods, Food and Beverage
Published Sources
© 2024
Available Languages
Related material
Teaching note, Video
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