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Part 3: Analysis and Presentation3.1 SWOT Analysis:Strengths:i.Broad range of productsii.Contract with Waitroseiii.Customer propositionWeaknesses:i.Dependence on UK marketii.Loss makingOpportunities:i.UK online retail industryii.Non foodThreats:i.Future acquisitionsii.Competitorsiii.Fraud STRENGHTS9
i.Broad range of products:In addition to its current area of strategic focus, the company intends to investigate growthopportunities by improving the customer offering continually through maintaining and improving thecustomer experience; increasing its core product range; and continuing to offer value to customers(Annual Report 2009, Ocado limited).Ocado sells more than 20,000 different products, the vast majority of which are sourced throughWaitrose, a leading high quality UK supermarket. Approximately 4,300 of the products sold by Ocadoare Waitrose-branded products. Ocado’s product range includes a small but expanding range of Ocadobranded products (Ocadogroup.com, Strategic Overview).Choices of the different range of products enable the customers to buy the products that match theirlifestyles and are within their budget. Also the availability of every type of product on one channelincreases the chances of sale because customer did not want to go elsewhere if he find everything onone place. It helped consumers to spend less without compromising on choice or quality. ii.Contract with Waitrose:The Company’s reputation is based at least in part on its relationship with Waitrose and its ability to supply Waitrose branded products. If Waitrose ceased to supply the Company with products or if Waitrose were to suffer reputational damage which impacted on the Waitrose brand there could be an adverse effect on the Company’s financial position and future prospects. The Company has a successful symbiotic relationship evolved over 10 years and has recently agreed a new branding and sourcing agreement until 2020. The Company is not dependant on the Waitrose supply chain as 85% of items sold are now sourced directly from suppliers.In May 2010, a new 10 years deal was signed with Waitrose (Annual Report 2009, Ocado Ltd).There were some rumours about Ocado and its 10 years contract with Waitrose. Previous contractsigned for 10 years were with Waitrose was about to end and if this contract will not renewed it cancause big problems for Ocado because in 2010 Ocado is going to listed on London Stock Exchange.But in May 2010 deal with Waitrose was signed for 10 years in which there is a non-competitionagreement with Waitrose and with Waitrose likely to extend its delivery services to highly lucrativeM25 region.10
iii.Customer proposition:Ocado offers delivery of grocery products to customers centrally picked from a single, state-of-the-art,highly automated warehouse (the customer fulfilment centre or ‘‘CFC’’) (Ocadogroup.com, StrategicOverview).