Analysis of UK Retail Sector: A Case Study on Morrisons

This analysis delves into the strategic landscape of the UK retail sector, focusing on Morrisons, the fourth largest supermarket chain in the UK. Utilizing Porter's Five Forces analysis, PESTEL analysis, and value chain analysis, this report examines the competitive environment, external factors, and internal operations of Morrisons. It explores the company's strengths, weaknesses, opportunities, and threats, providing insights into its strategic positioning and future prospects within the dynamic UK retail market.

Analysis of UK retail sector- Case study on Morrisons

Table of contents
Introduction........................................................................................................................2
Overview of Morrison.........................................................................................................3
Porter’s Five Forces Analysis............................................................................................3
Threat of Substitute products and services.......................................................................3
Threat of new entrants.......................................................................................................4
Rivalry among competitors................................................................................................4
Bargaining power of buyers...............................................................................................4
Bargaining power of suppliers...........................................................................................4
PESTEL Analysis...............................................................................................................5
Political...............................................................................................................................5
Economic...........................................................................................................................5
Social.................................................................................................................................5
Technological.....................................................................................................................6
Environment.......................................................................................................................6
Legal..................................................................................................................................7
Value Chain Analysis.........................................................................................................7
Inbound Logistic.................................................................................................................8
Operations Management...................................................................................................8
Outbound Logistics............................................................................................................8
Marketing and Sales..........................................................................................................8
Services.............................................................................................................................8
Conclusion.........................................................................................................................8
References.......................................................................................................................10

Introduction
This analysis is done to find the objectives of Morrison Grocery Company. Some
strategic tools such as Porter Five force analysis, PESTEL Analysis, Value chain,
Inbound and Out bound logistics are used to get the feedback. This report helps to
prove that Morrison holds the fourth largest position in the chain of supermarkets in the
United Kingdom. This company maintains its quality, value and price rate.

Overview of Morrison
Morrison is the founder of the Morrison chain of super markets. Initially it was a public
undertaking but with the advent of time the company gained momentum. Initially the
company was a single store. The company in the year 1958 it started increasing its
market throughout the United Kingdom. The company with its expansion started
innovation in the field of its products and services. The company started global service
accordingly. The application of the company towards the customer base started
increasing gradually. The company started understanding the customer tastes and the
preferences which led to their momentum.
It holds around 25000 square feet of the space in the market and has around 498
stores in the active mode (Haleem and Jehangir, 2017). Gradually it started towards
increasing its business in the form of family business. Initially it is around 10% of the
shares of the company.
Porter’s Five Forces Analysis
It is the analysis which focuses on the competitive environment prevailing in the
society. The application of the porter analysis helps in the formulation of the policies and
thereby implementing the changes in the organization in the long run. There are
different analysis which helps in the determination of the competition that is prevalent in
the field of the company
Threat of Substitute products and services
This is the first porter analysis of the porter theory. According to the force it tries to
identify the treats that are prevailing for the company. Initially the threat of the company
would be minimum due to the promotion it undertakes at the beginning. Normally new
entrant in the would attract new customers. The company at the initial stage would not
be under any competition. The company would go for variation in the product which
would enable it to secure the market in the long run.

Threat of new entrants
The new entrants in the field of the supermarket would be less due to the amount of
investment the supermarket has to provide at the startup. Due to the lack in the
investment policies and the interest being minimum new entrant is absent. This enable
the company to gain ground and diversify its market simultaneously.
Rivalry among competitors
There is a ferocious competition among the best grocery companies. The other major
retailers mainly ASDA, Sainsbury’s, Tesco, Waitrose are trying to increase their share of
the market by reducing their price and improving the quality of their products. The
companies are taking new strategies to promote their products. New technologies
developed by the competitor can be a serious threat of Morrisons. The main competitor
of Morrisons is Tesco which is giving a tough competition to the company. So Morrisons
is catching more strategies and tactics to add more customers. It is proved very difficult
for the company. To get the best position in market, Morrison is trying hard.
Bargaining power of buyers
The bargaining powers of the company are less as the suppliers can go for different
companies at the increase of the hike of the products of the Morrison supermarket. The
bargaining power of the supplier is high as the market is being controlled by the
supplier. This is one of the significant factor in the porters five policy as it market can be
configured therein.
Bargaining power of suppliers
The company’s business is also depending on the supply of raw materials. Suppliers
always prefer overweight retailers to supply raw materials. Suppliers do not like to lose
their business contract with the company. So, Morrisons and other super markets have
the upper hand to set the price, so that they get the lowest price.

PESTEL Analysis
PESTEL Analysis describes a framework of macro-environmental scanning component
of strategic management. It is considered as an external analysis to understand the
present situation of market. It is a strategic tool for understanding market growth or
decline, business position, potential and direction for operation.
Political
As Morrisons is an international company, it operates its business in number of country.
So it is said that Morrisons is greatly inclined by the global political factors. It
establishes its global presence and becomes largest grocery retailer in United Kingdom.
These political factors consist of acts of legislation, tax, rates, minimum wage, and
contrary economic and political stability. Most of the countries in the world inspire the
retailers to begin their business in their countries. The countries want this so that
people get the opportunity of working. Morrisons is opening various stores in different
countries. In this way, Morrisons is giving the chance of employment in different
countries. There is no political issue in this company because of it always cooperates
with the local political parties.
Economic
The government has been reducing the interest rates since 2008 due to the recession.
Food is primary item for every human, so grocery items are always necessary to make
food. For this reason the grocery shop is always getting the customer to buy products.
As a result of recession people eat at home more than eating outside. It is a positive
impact on the grocery retailers. So Morrison and other grocery retailers are always
trying to increase their business. For increasing business the company appoints new
employers. The unemployment rate is decreasing and economic growth rate is
increasing.
Social
Morrisons is a popular food retailer organization in United Kingdom. It has a great
impact on society. People like this company to buy products because of its large

product portfolio and customization. It is highly customer oriented and gives various
facilities to the buyers. The company has good food making skills with strong
distribution network and an efficient supply chain. Fresh food is available in the all
stores of Morrison’s that is the reason of its popularity among people. The company
has its own manufacturing facilities. Morrisons has a vertically integrated business
model which creates a healthy relationship with the people. The company is highly
customer oriented with ‘My View’ features and ‘More Card’ program. The customer has
the opportunity to give feedback about the company in “My View” customer panel. The
customers are actually satisfied with the availability of products and improved services.
‘More Card’ program enables customers to enjoy offers, earn points and save more via
in- store and online shopping.
Technological
Technology plays a vital role for marketing of a company. Morrisons use different
technologies to increase the business. With the help of technologies, the company
reaches to the customers. Morrison uses an Electronic Point of Sale(EPOS) SYSTEM
and Drive Planning System to ensure supply time to time. It has also invented Payroll
System, HR System and a website which shares information about products. Online
shopping has a great impact on the grocery retailer’s business. It is increasing steadily
day by day. Taking the help of technologies, the company stays loyal to the customers.
Morrisons is looking to increase its online presence by building a new mobile-enabled
website and iphone app which help customers to buy items easily and give the
payment. The customers get the opportunities to give online payment which is safe for
both company and customer.
Environment
Morrison has a friendly environment. The workers behave friendly with the customers.
They are very helpful and modest. The company cuts down price of everyday items
lowest for as long as possible. The products that were being produced by the company
during the eve of Christmas was around 500 products with the addition of 100 products

during the holiday season. The products supplied by the company are calorie free which
was around 600 calories. It deals in the products that are healthy and natural in nature.
One of the defining factors of the company is the feedback that urges the company to
deliver accordingly. The company helps in understanding the requirements of the
customers and the tastes and the preferences of the products are changed thereby to
increase the customer base. This element of the company differentiates it from the other
company (De Marchi et al., 2015). This can be considered one of the defining factors in
the global market. The environmental factors of the organization are one of the
significant factors in the PESTEL analysis as determines the external environment in
the simultaneous manner.
Legal
The legal factors can decide whether or not there is a business behind selling a product.
There are some legal factors such as consumer law, discrimination law, copyright law,
health and safety law, employment law, fraud law, pyramid scheme law and import
export law (Sullivan and Gouldson, 2016). Every company has the responsibilities to
maintain these law factors. Consumers are the main strength of a company, so their
safety is the main priority of a company. Morrison does not have any drawbacks about
law. The company is very cooperative with the customers. They give them facilities and
behave well. On the other hand the workers of the Morrison are well treated. Still, no
fraud case has been heard about Morrison’s.
Value Chain Analysis
There are various steps which are followed to make a product and deliver it to the
customers. The total value is made up of delivering the final product to the customers.
This concept was developed by Michael Porter in his book ‘Competitive Advantage’ in
1980. The value chain analysis tool is used to find out the strength and weakness.
Morrison has strong brand portfolio, strong free cash flow, strong distribution network,
strong dealer community (Sausman et al., 2017). These are all the company’s strength.
There are also some weakness such as: the profitability ratio and net contribution are

below the industry average, the marketing procedure is not very good, more investment
is needed in new technologies.
Inbound Logistic
In the inbound logistic, Morrisons leads availability of deliver of products. There is no
issue with supply management. Morrison has a good food distribution centre through-
out the United Kingdom.
Operations Management
The operations management consists of the production of high quality food at
reasonable price. Morrison maintains the quality of food and brand value.
Outbound Logistics
In outbound logistics Morrison offers a ample verities of fresh food with normal value so
that every person is able to buy its products. Morrison remains its price reasonable but
never spoils the quality of the products (Bjursten et al., 2016).
Marketing and Sales
Morrison is good in marketing and sales. The company uses various strategies for
marketing. It provides different advertisement time to time to promote the products.
Morrison also organises promotion programme like “Let’s Grow”, “Collector Card
Scheme”. Atpresent Morrison is using the Sun Media Promotion.
Services
Morrison appoints trained staff to deal with customers. It gives good services to the
customers to establish its position as one of the best retail company. Morrison has
launched its Fresh Food Academy and Fresh Value Food products to give knowledge to
its workers.

Conclusion
Thus it is said that after this analysis we can easily find out the position of Morrison in
the retail industry. Though there are various competitors such as Tesco , Asda, it
establishes its popularity among the people. Morrison always provides fresh products.
The distribution procedure is also very amazing. Morrison is using new technology to
survive in the market. There are also some drawbacks which can spoil the reputation of
the company. So the company should work on these drawbacks. It is considered that
Morrison is popular for its product quality among the people.

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