Academic Rationale

Lambert and Davidson (2013) states that social media is referred as actions, manners between the people of societies who have gathered online in order to share knowledge, advice through chatting media including information. For the training determinations social media practice would be stately from dissimilar variables, the subsequent segment would bang on the notions of social media custom, features, kinds, and organizational performance along with the relationship among them (Robson et al. 2015).

The study aims to identify whether there is a positive impact on Ocado to develop their online capabilities after partnering with Morrisons.

• What is the impact of online presence on Profitability for Ocado?
• What is the impact of online presence on Liquidity for Ocado?
• What is the impact of online presence on Financial Leverage and efficiency for Ocado?

• Impact of online presence on Profitability for Ocado
• Impact of online presence on Liquidity for Ocado
• Impact of online presence on Financial Leverage for Ocado
• Impact of online presence on Efficiency for Ocado

In the recent scenario, social media has been considered a popular tool that are being used in large numbers worldwide. Some of the organization develops and uses the advantage of social media in order to ensure that their social media page remains updated for all time to maintain their consumer satisfaction. In the report, the study showed that all over the world there are billions of citizens who come under the social media-using category. The access in social media was found for reading the blogs available online, altering of video clips, customization is done on personal profiles of social media. Even some of the author gave social media a definition from operational performance perspective at distinct levels. According to distinct levels, authors meant different meaning in accordance to their feature, need of the study, industry and reason of research (Bruton et al. 2015).

Social media comprises web along with the mobile-based technology that encourage operators to interconnect with every further by generating and allocation user-created pleased. Additional than that an amount of the chief fashionable social media stages has twisted into a combination of a numeral of these groups, though the key social media categories.

Social Networks:

Social network is considered as a stage of site available online including services that provide support to the user in order to transfer and being connected to other user holding same interest. This gives the user to create their own provide and to connect to the other user. Sharing is considered as mutual transmission including gain of data, experiences, opinions, thoughts, principles related to something that are equally in collective like services along with products among the users at the time of using social media. The procedure of allocation evidence leads for an improvement in the positive attention-set among the clienteles such as insight of originality or bounciness. My Space, Facebook including LinkedIn are the middle-of-the-road general example of a social network website. (Lambert and Davidson 2013).

Blogs:

Blogs has been now days as a mini news updates and is widely spread among many people. It is known as content management system that makes the work easier in order to publish short articles named as posts.  These are also operated as journals available online. These are the sites providing the important supportive document to the user in order to publish articles for their constant user and others. Much organization uses blogs to support in different manners. In the study, it was found that the internet accessory had evaluated the blogs in an out manner as it is liberated from conventional and commercial-streamed media that would help and permits users to transcribe their thoughts in a mineral clear style. Besides Phillips, Zigan, Silva, and Schegg, (2015) states that the increasing celebrity of blogging is significant now that every operator with Internet arrival can naturally generate a blog with every of the multi free tackles obtainable. Users who are related to sharing their view on a precise topic or life in general are able to create more often than not blogs. Sound-known blogging places such as Word Press including Blogger (Ma et al. 2015).

Research Question

Online rating sites:

These sites help the operator to provide the vital tool alter the views in regard to hotel, precise, product, eating place, and service in favor of other operator interested to official visit the site to get the complete view of the stages of facilities to assume.  Social media advertising is connected to affiliation marketing; Administrations must transfer from the thought of exasperating to sell to manufacturing influences with the clienteles. Phillips, Zigan, Silva and Schegg (2015) clarify the occasion upsurge as, a communal drift in which individuals use knowledge to get the belongings they essential after each other, slightly than from outdated establishments like corporations. This also occur exclusive e-commerce sites, such as Amazon including eBay since operators be probable to assess and checked the remarks concerning a creation or service preceding to creation of acquisition in sites such as Zagat, Google places and Trip Advisor.

Multimedia:

These sites run chiefly on the distribution including spreading the media like pictures, graphics picture, videos including PDFs not as usually as allocation text. These sites enable the operator to upload the materials of multimedia. An acquainted typical in hypermedia places is the competence to produce a tag connected with a explicit information; a tag is considred as an illustrative word which enable the users to derive across a specific content. Operators will be able to generally put down explanations and share insides with their networks and domestic. Sound acknowledged example such as Last.fm, slide share and instagram. (Sinkovics, Sinkovics and “Bryan” Jean 2013).

As social media growth rate is astronomical, it had a marvelous impact on commercial and upon its marketing.  It helps in developing the tactics for business. The social media sites help in holding the attention of different consumers and on the other hand constructing brand image. These social systems permit commercial to use includes viewing many tactics and creating a profile of branding such as sweepstakes, contests and fan pages. Social media even helps in viewing the preference of people. This helps in taking the decision regarding the product stressed on the preference of the users. Business Process Performance is the competence with which corporations alter the obtainable participations into productions traditionally; commercial process presentation is examined by founding a set of Key Performance Indicators associated with every development of the corporation (Terjesen, Couto and Francisco 2016). The supervision board sets goal morals for each KPI and likens these goals to genuine and past morals. Numerous approaches for gauging Business Process Performance exist, together with the Balanced Score card, the self-valuation, the outdated regulatory tactic process presentation dimension schemes workflow based observing and numerical procedure controller. Eccles, Ioannou and Serafeim (2014) stated that organizational performance is the alteration of contributions into productions for attaining convinced consequences. With respect to its gratified, presentation notifies about the relative between negligible and actual cost cheap, among actual cost and comprehended output effectiveness and among production and accomplished product success. According to Hvidman and Andersen, (2013) organizational performance expresses of three specific spheres of the organization results such as performance from financials like income, return on investment and assets, performance of market product such as sales and market share and returns from shareholders. Further, there were two methods of measuring the organizational performance could be measured from fiscal and non- fiscal category (Saxton and Waters 2014). 

Research Objective

The research has followed evaluation of the online presence as per the secondary research analysis. This has been further conducted with the use of secondary resources such as annual report of the company and information published on the company website. The research technique is associated with quantitative representation the financial ratios such as financial leverage ratio, profitability ratio, liquidity ratio and efficiency ratios. The observations of the study have been evaluated by tabular and graphical representation of financial information which shows the impact of online presence (Quinlan et al. 2018).

Sequential Activities/ Period	Week 1	Week 2	Week 3 &4	Week 5 & 6
Forming the Idea	ü
Formulation of the research design		ü
Collection of the requisite data		ü	ü
Interpretation of the results			ü
Publishing the report				ü

Particulars		2009	2010	2011	2012	2013	2014	2015	2016	2017
		$m	$m	$m	$m	$m	$m	$m	$m	$m
Profit for the year	A	23.2	7.2	-0.5	-2.4	-12.5	7.2	11.9	12.0	1.0
Revenue	B	402.0	515.7	598.3	678.6	792.1	948.9	1107.6	1271.0	1463.8
Total Assets	C	136.6	302.0	361.7	448.3	498.1	538.2	591.6	700.6	894.5
Total Equity	D	-32.2	171.8	361.7	448.3	202.4	218.2	241.9	262.4	270.7
Net Profit Margin	E= A/B	5.77%	1.40%	-0.08%	-0.35%	-1.58%	0.76%	1.07%	0.94%	0.07%
Return on Equity (ROE)	F=A/D	-72.19%	4.20%	-0.14%	-0.54%	-6.18%	3.30%	4.92%	4.57%	0.37%
Return on Assets	G=A/C	16.99%	2.39%	-0.14%	-0.54%	-2.51%	1.34%	2.01%	1.71%	0.11%

Table 1:Profitability Ratio changes from 2009-2017 in Ocado

 (Source: Ocadogroup.com. 2018)

The overall assertions of profitability ratio show that post partnership of Ocado with Morrisons on 2013, there has been a considerable increase in net profit, revenue generation and total equity of the company. This is evident with company owning losses in 2013 with an amount of -12.5 to 7.2 in 2014 as a result of improvement in operational performance due to online activities. 

The graphical representations clearly reveal that all the bars are mostly negative before the partnership of Ocado with Morrisons. However, after the partnership of the company with Morrisons the company have shown promising improvement in terms of return on equity and net profit margin.

Particulars		2009	2010	2011	2012	2013	2014	2015	2016	2017
		$m	$m	$m	$m	$m	$m	$m	$m	$m
Current Assets	A	37.0	186.2	144.3	138.1	179.6	147.0	136.5	700.6	894.5
Current Liabilities	B	79.0	74.4	99.5	117.6	159.0	168.0	196.0	290.9	257.2
Inventory	C	14.7	18.6	14.3	17.5	23.9	27.6	29.9	39.1	42.9
Prepayments & Other Assets	D	4.4	3.6	6.3	6.2	5.1	6.6	10.7	11.6	12.9
Cash & Cash equivalents	E	13.0	124.6	92.1	89.6	110.5	76.3	45.8	50.9	150.0
Current Ratio	F=A/B	0.47	2.50	1.45	1.17	1.13	0.88	0.70	2.41	3.48
Quick Ratio	G=(A-C-D)/B	0.23	2.20	1.24	0.97	0.95	0.67	0.49	2.23	3.26
Cash Ratio	H=E/B	0.16	1.68	0.93	0.76	0.69	0.45	0.23	0.17	0.58

Table 2:Liquidity Ratio changes from 2009-2017 in Ocado

 (Source: Ocadogroup.com. 2018)

The table represents that there has been a considerable improvement in the current assets of the company which shows an improved utilization of the operating funds available in hand. This improvement can be clearly depicted during 2017 and 2016. However, in 2009 it had current assets of only $ 37m. This is evident with current ratio of 2.41 in 2016 and 3.48 in 2017. Similarly, the quick ratio has shown improvements from 0.97 in 2012 to 3.26 in 2017. 

The liquidity ratio of the company can be clearly seen to be increasing in terms of current ratio, quick ratio and Cash ratio in 2016 and 2017. The overall assertions clearly depict that the inclusion of online activities by the business such as use of social media, YouTube and online marketing have contributed to increased sales for Ocado. The decision of the company to partner with Morrisons have clearly contributed to the improvement in short-term funds available for meeting the operating requirements.

Particulars		2009	2010	2011	2012	2013	2014	2015	2016	2017
		$m	$m	$m	$m	$m	$m	$m	$m	$m
Total Assets	A	136.6	302.0	361.7	448.3	498.1	538.2	591.6	700.6	894.5
Total Equity	B	-32.2	171.8	172.9	205.7	202.4	218.2	241.9	262.4	270.7
Total Liabilities	C	168.8	130.2	188.8	242.6	295.7	320.0	349.7	438.2	623.8
Debt-to-Equity Ratio	D=C/B	-5.25	0.76	1.09	1.18	1.46	1.47	1.45	1.67	2.30
Debt Ratio	E=C/A	1.24	0.43	0.52	0.54	0.59	0.59	0.59	0.63	0.70
Equity Ratio	F=B/A	-0.24	0.57	0.48	0.46	0.41	0.41	0.41	0.37	0.30

 Table 3:Financial Leverage Ratio changes from 2009-2017 in Ocado

(Source: Ocadogroup.com. 2018)

The table of financial leverage ratio have inferred a linear incremental trend for total assets and total equity of the company. Therefore, Ocado has received a substantial gain in terms of increasing the total assets and equity through better online presence. Moreover, in terms of debt equity ratio it can be seen that in 2009 the debt equity ratio was 1.24 which shows the dependency of the company on long-term borrowings. However, on 2013 onwards the debt ratio showed a considerable improvement with 0.59. This trend continued for three consecutive years.

The graphical representation of the financial leverage ratio shows that the reliance of the company on long-term borrowings has been stagnant from 2013 to 2017. Despite of this some instance of increase in debt capital, Ocado has compensated the same with increasing profits in the same time period with a better online presence.

Particulars`		2009	2010	2011	2012	2013	2014	2015	2016	2017
		$m	$m	$m	$m	$m	$m	$m	$m	$m
Total Assets	A	136.6	302.0	361.7	448.3	498.1	538.2	591.6	700.6	894.5
Fixed Assets	B	90.3	100.0	172.9	205.7	202.4	218.2	241.9	262.4	270.7
Revenue	C	402.0	515.7	598.3	678.6	792.1	948.9	1107.6	1271.0	1463.8
Trade & Other Receivables	D	14.7	18.6	37.9	30.8	45.2	43.1	60.8	59.4	66.8
Total Asset Turnover Ratio	E=C/A	2.94	1.71	1.65	1.51	1.59	1.76	1.87	1.81	1.64
Fixed Asset Turnover Ratio	F=C/B	4.45	5.16	3.46	3.30	3.91	4.35	4.58	4.84	5.41
Receivables Turnover Ratio	G=C/D	0.04	0.04	0.06	0.05	0.06	0.05	0.05	0.05	0.05

Literature Review

Table 4:Efficiency Ratio changes from 2009-2017 in Ocado

(Source: Ocadogroup.com. 2018)

The improvement in efficiency ratio after partnership can be clearly depicted with increasing total asset turnover from 2014 to 2017 and fixed asset turnover in the same year.

The improvement in the efficiency ratio is clearly evident with the increasing bars for total asset and fixed asset from 2013 2017.

Particulars		2009	2010	2011	2012	2013	2014	2015	2016	2017
Earnings per Share	A	NA	NA	NA	NA	NA	1.240	2.010	1.960	0.160
Dividend per Share	B	NA	NA	NA	NA	NA	1.630	1.371	1.810	0.030
Dividend Pay-out Ratio	D=B/A	NA	NA	NA	NA	NA	131.45%	68.21%	92.35%	18.75%

Table 5:Market Value changes from 2009-2017 in Ocado

(Source: Ocadogroup.com. 2018)

Before the partnership of Ocado with Morrisons the company was not able to provide dividend to the shareholders. However, from 2014 to 2017 the company is able to pay dividend due to increasing profit.

Conclusion

The overall assertion is clearly showing that there is a positive impact on Ocado to develop their online capabilities after partnering with Morrisons. This impact can be clearly seen with the improvement in ratio such as profitability ratios, financial leverage ratios, market Value change ratio and liquidity ratios. 

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