Impact and Influence of Macro Environment on Organisation and its Business Strategies

This report discusses the impact and influence of macro environment on organisation and its business strategies. It explores the various factors such as political, economic, social, technological, legal, and environmental that affect business operations. The report focuses on Morrison, a leading supermarket in the UK, and discusses the strategies used by the company to manage these factors.

BUSINESS-
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Impact and influence of macro environment on organisation and its business strategies......1
TASK 2............................................................................................................................................7
Assessment of internal environment and capabilities............................................................7
TASK 3..........................................................................................................................................10
Evaluation of a given market by applying Porter's Five Force Model.................................10
TASK 4..........................................................................................................................................11
Applying of theories, concepts, models to understand and interpret strategic directions
available to a company.........................................................................................................11
CONCLUSION..............................................................................................................................14
References......................................................................................................................................15
Books & Journal............................................................................................................................15

INTRODUCTION
Business strategy is defined as the set of competitive regulations which are developed
within the organisation for doing effective work and increasing the profits earned by the
company. There are various organisations which are working for or attracting customers and
increasing cooperative advantage for sustaining in market for longer period. Business strategy
for planning is known of initiation taken by companies to run the business properly and maintain
productivity and efficiency of functioning. The following report is based upon Morrison which is
one of the largest supermarket within UK. This organisation was founded by William Morrison
in 1899 and the headquarters are situated in Bradford London. in this report, there is description
of impact and influence of external as well as internal factors on performance of company.
Different models are used for explaining these factors such as SWOT analysis, driver
framework, porter's model and pestel analysis.
TASK 1
Impact and influence of macro environment on organisation and its business strategies
 Mission:- To provide customers and clients valuable products by best value for money
on weekly shopping.
 Vision:- To become food specialist for all people.
 Objectives:- This company has the objective to attain success in market by providing
good quality of products to people.
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PESTLE analysis:
Pestel analysis - this is a business tool which is used for or collecting details about external
factors that can impact business performance. This is basically concerned with the macro
external factors which a company considers before entering into new markets. Pestel analysis of
Morrison is mentioned below
Political factors - there are different elements which affect business activities and operations as
per the laws and regulations given by government. All the organisations working in in different
countries have to adopt the norms and regulations given by that country so that there is no
problem while conducting business operations. In context of Morrison, this company has to face
supply chain disruption within UK after the brexit scenario. When operating business in foreign
markets, Morrison is is facing a lot of challenges and has to deal with various complexities.
 Positive impact - business operations and activities within Morrison are affected by the
import duty and there is need of managing inventory in different countries like China,
UK and Asia.
 Negative impact – various rules and regulations are present which affect business
activities and operations of Morrison and these have to be managed properly as there is
continuous increase in export charges.
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Economic factors - these are known as various economic factors like inflation rate, deflation
rate, economics of sale that affect the business activities directly. In case of Morrison, at the time
of recession this company faced decline in profit and sales. Recession affected performance of
Morrison badly.
 Positive impact - Morrison uses diversification of products for managing the the presence
of company in foreign countries.
 Negative impact - Morrison was affected by the the increased labour cost in UK. It has to
pay more money to the labour as there was minimum wage rise of 4.4% in UK labour
cost.
Social factors - this affect business activities and operations and also these factors include
lifestyle and culture adopted by customers. As a supermarket organisation, Morrison has to
ensure that it is not providing any product which is against the culture of the region in which it is
serving. The current demands and needs of customers are evaluated properly for managing the
business functions in effective manner.
 Positive impact - Morrison is a a organisation that uses diversification of products. This
attracts customers and also profit and sales are also enhanced.
 Negative impact - the main problem which Morrison has to face due to the social factor is
thatthere is continuous change in demands and requirements of customers which has to
be managed properly.
Technological factors - these are known as the technological elements which are related to new
and latest advancement of technology that can be used for implementing the business activities.
Morrison has to use latest technologies for managing the achievement of goals and objectives.
This organisation is using cognitive intelligence as well as artificial intelligence.
 Positive impact - by using new technology, there are lot of chances within Morrison to
increase the sales and profit of company. Morrison has adopted various technologies for
attracting customers by using latest techniques for payment.
 Negative impact – there is requirement of investment for using the new and latest
technologies.
Legal factors – these are known as legal regulations and rules which are given by law of
different countries in which the company is operating. It is important for Morrison to do all the
business activities and operations by following t norms and regulations given by law.
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 Positive impact - by adopting all the regulations and norms given by food retailing
commission then it is easy to to becoming loyal to customers by providing them quality
products. Also, the organisation is able to manage good image in market by adopting
different regulations and rules.
 Negative impact - in case of workplace discrimination, Morrison is strictly punished if
any work for employee files complaint against them.
Environmental factors – these are known as the environmental regulations and norms which
are followed by the company for managing success within market. It is insured by Morrison that
it is adopting all the environmental laws and putting some efforts for managing the harm to
environment.
 Positive impact - Morrison is taking initiatives for providing good environment it.it has
stopped giving plastic packaging instead it is providing paper bags.
 Negative impact - if there is need of installing high techniques and processes for
environment issues then there is requirement of lot of investment..
There are different factors in the business environment which have to be properly managed
by Morrison in order to do success within the business environment and achieve success. There
is proper analysis of macro as well as micro factors which are used for expanding business and
managing the operations of company in different countries. while conducting business functions
in different countries, there are various challenges as well as opportunities which have to be
managed properly.
Ans-off's growth vector matrix:-
Ansoff growth vector matrix
this is defined as a strategic management tool that a organisation uses for developing good
strategy and planning in order to grow the market. There are basically four different stages that
are used by any company for managing the business functions. According to answer of growth
matrix, there are four strategies which can be adopted by Morrison and these are discussed below
 Market penetration - according to this strategy, the company has opportunity for
focusing upon expanding the market share by promoting existing product of company in
already existing market. This strategy does not require lot of funds and investment as
product is already known to the customers. There is presence of existing customer base
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that can be used effectively within this strategy. Morrison can work upon two key
features which are quality and low pricing of product for working in the market and
increasing the existing customer base. The penetration strategies used by Morrison for
managing the quality of product which is provided at affordable prices to target
customers.
 Market development - according to this strategy, there is selling of existing product in a a
new geographic area. This organisation is helpful for increasing the global expansion.
This strategy requires lot of research and investment before launching the product in new
market. There is requirement of conducting various market researches in order to know
whether this product will attract the customers of new geographical area.
 Product development - according to this strategy, organisation is launching a new
product in the existing market. The main focus of this kind of strategy is to managed a
new product development and increased the customer base. Morrison can experience
tremendous growth if it has used this strategy properly.
 Diversification - according to this strategy, the companies have the opportunity for
expanding business in different countries by using diversify products. According to this
strategy, Morrison is able to manage his work properly by exploring the new customer
segment and providing a new product Idea within that market.
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Stakeholder Analysis
Stakeholders are defined as those individuals on which business operations and activities
have a great influence. It is important for Morrison to manage goodwill and good reputation
within market so that there is no problem within the stakeholders. Stakeholder analysis of
Morrison is mentioned below-
Stakeholder Effect on Morrison
Customers
Customers of Morrison are loyal towards brand
as this company offers quality products to
people since years.
Suppliers
It is important for Morrison to build long term
relationship with suppliers for smooth
functioning of the company.
Governments
Government is an essential stakeholder which
has to be treated effectively by the organisation
(Eason, 2014). Morrison has to adhere different
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rules and laws to build good reputation among
customers.
shareholders
Shareholders are another important stakeholder
that a company can have. In context of
Morrison, shareholders provide investments for
doing different business operations and
functions.
Employees
These are another stakeholder of the
organisation and Morrison thinks that sharing
growth and profit with employees is beneficial
for the company. Morissons provide bonus,
money and incentives to it’s employees for
motivating them to work hard and achieve
organisational goals and objectives.
How analysis determines strategic management decisions of Morrison
Morrison is a leading supermarket organisation within UK and it is expanding the
market share by adopting new and latest technologies within the organisation. There are a lot of
opportunities and strategies used by the companies for increasing profits. The decision of
stakeholders is important for managing the functioning of company.
TASK 2
Assessment of internal environment and capabilities
SWOT analysis of Morrison:
Strength Weakness
 Morrison is a big supermarket chain
within UK. It provides high quality
products and services in different
countries.
 This company has maintained an
 Morrison is facing huge competition as
there are various other supermarkets
dealing within UK.
 They do not have effective strategies
for market their products effectively.
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effective supply chain network.
 This organisation has chosen integrated
way for managing the supply chain
network.
 There is standard portfolio of Morison’s
products.
 This organisation is facing some
controversies related to some products.
Opportunities Threats
 There is opportunity for market
expansion in different countries.
 Morrison can use new ways of
marketing the products and services. .
 There are various threat for new entry
within foreign markets.
 Morrison is a company that has to adopt
rules and regulations of the country in
which it is operating functions.
VRIO analysis:
The VRIO framework is used by different organisations in order to know what are the strength
and weakness and how they can be worked upon for enhancing profit. For concept within this
model which are value, variety, in imitation and organisation. In context of Morrison, there are
various resources within this company such as global presence, human resource, differentiation
strategy and cost strategy.
 Valuable - in context of this factor, It is seen that companies are having valuable
resources which are very for achieving the organisational goals and objectives in
specified time frame. cost strategy is a big strength that Morrison is having in order to do
good business and it managed the success with n market. Moreover, differentiation
strategies another strength which Morrison is having. This provides great differentiation
advantage from other companies to Morrison.
 Rare - the differentiation strategy used within Morrison is known as unique feature which
this organisation is having. On the other hand, global presence is not considered as a rare
concept.the cost strategy of Morrison is helpful for providing offers to customers which
they can choose as they are at affordable prices. Also, human resource management of
Morrison is very effective and in this company, there are various training and
development sessions which are undertaken on regular basis.
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 Imitable – human resource management and global presence of Morrison can be imitable
by other companies. These two factors are imitable by other companies by using the
management which Morrison is using.
 Organisation - it is important for the company to manage the smooth running of all
business activities. These are helpful for managing the effective functioning in order to
manage the smooth running and functioning of all activities. Global presence, cost
strategy and human resource are the three resources present within Morrison for
managing bi working of company properly. There is need to focus upon differentiation
strategy as it is the unique feature which this company is using.
Resource Valuable Rare inimitable organized
Human resource yes yes
Global presence yes
Differentiation
Strategy
yes yes yes yes
Cost strategy yes yes yes
Resource based view
According to the resource based view, a company is able to use the company resources
in effective manner and managed a functioning of company properly. there are two types of
resources within Morrison which are tangible and intangible. the tangible resources of Morrison
consists of physical assets which the companies having like factories, machines, inventory, etc.
on the other hand, intangible resources include good reputation of company within market
customer relationship, supply chain management relation, etc. The different type of resources
involved in the Morrison include the following –
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Resources
Financial Morrison is having these resource in the form
of money and retained earnings.
Human These consists of skills and abilities of
individual. Employees working in Morrison
are skilled and talented and they have
capability to attain organisational goals in
given time
Physical This include plant and equipment and
geographic location. Morrison is operating in
different countries and main headquarters are
situated in UK
Organisational These includes reporting structures and
relationships. Morrison is ensuring that it is
maintaining healthy relationship with
customers
TASK 3
Evaluation of a given market by applying Porter's Five Force Model
The porter five forces model is used within organisations in order to analyse a competitive
advantage of company within market. It is Very important for the organisations to analyse what
are the actual needs of company and how its sources and business can be used for maintaining
competitive advantage. The different stages of photos poses modelling contact of Morrison is
mentioned below-
 Bargaining power of buyers - in case of Morrison, bargaining power of buyers is high as
there are number of supermarkets present market which can be used by customers.
Customer known as important aspect of the company. It is concluded that Morrison has
to ensure that it is providing effective services and products to customers so that they will
be attracted towards buying the products and services from Morrison.
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 Bargaining power of suppliers - Morrison has low rate of bargaining power of suppliers
as there are number of suppliers within market. The main motive of Morrison is to
maintain good relationship with the suppliers so that it is easy to manage the buying of
products and raw materials. That is maintaining good relationship as it helps in
minimising bargaining power. It is important that a good relationship is developed within
the organisation suppliers.
 Threat of new entrants - the supermarket industry is very competitive as there are a
number of companies which are successful and of drink supermarket services to the
customers. Hence, it is essential for Morrison to maintain the competitive advantage by
offering new services and products. on the other hand, threat of new entrants is very low
as the supermarket industry requires huge amount of investment and it is not possible to
maintain the good reputation of company within few years. It takes a lot of time to
develop good relation with customers.
 Threat of substitutes - Morrison is a company which is working effectively within the
supermarket industry and has gained good reputation in market. It has been working upon
increasing customer satisfaction since many years. moreover, there are some competitors
of Morrison like Walmart, as the, Tesco which are also working effectively in the
supermarket industry.
 Competitive rivalry - the competitive advantage within market is key factor that helps a
company to grow. Morrison has developed strong strategies and plans in order to do
effective work. This company can use various competitive strategies for developing the
competitive advantage. Main objective of all organisation is to increase the customer
satisfaction level by providing quality products.
TASK 4
Applying of theories, concepts, models to understand and interpret strategic directions available
to a company
Porter's generic model consists of four strategies that can be used by Morrison for doing
effective work. This include cost leadership, differentiation, focus strategies. Morrison is defined
as a big supermarket organisation that is providing quality services and products since many
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years. There are basically three components within this model which are used for analysing the
present market situation. This model is useful for analysing the position of customers effectively
and managing the competitive advantage.
 Cost leadership – according to this strategy, there is requirement of developing
competitive advantage within market. This strategy states that there are two factors
increasing profits and reducing costs which are helpful Ford company in order to manage
the competitive advantage. There is need for Morrison to work for leadership position
within Market by using different effective strategies.
 Differentiation strategy – these are the strategies which includes developing of products
and services different from the competitors. Morrison has to undergo effective market
research in order to provide effective services and products to customers. there is need of
using new innovations and technological advancement for managing the profit of
companies.
 Focus - there is need for the organisations to use focus strategies in order to maintain
competitive advantage within market. This consists of managing the needs of customers
in proper manner and analysing the low cost. There are two ways of cost focus strategies
which include differentiation strategy and cost focus. Morrison is using differentiation
strategy in order to focus upon narrow market segment.
Bowman model
According to the Bowman strategic model, there are different strategic positions that a company
or product has within the competitive position in market. This model is used within Morrison for
analysing the variety of options and opportunities which is company is having for working upon
perceived value and price. The main purpose of strategic clock is to manage the strategic position
of company within market. The different stages of a company within competitive advantage are
described below
 Low price and low value added - according to this, there is no competitive position for a
business and it is a bargain basement strategy.
 Low price - this strategy consists of cost minimization which is very effective for success
of any company. Organisations develop profit margins on each product but these are low
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 Hybrid - according to this stage, there are some factors of low price and product
differentiation. There is need of good added value by combination of affordable prices
and product differentiation.
 Differentiation – main objective of differentiation strategy is to provide high added value
products to customers and managing the branding of company.
 Focused differentiation - this is related with positioning of product at high price level by
managing perceived value. It is very important for the company to analyse the positioning
strategy and maintaining premium prices by selected target segment.
 Risky high margins - these are known as the strategies associated with high prices and
not offering perceived value. Risky high margins are part of an competitive strategy.
 Monopoly pricing – this consists of market of monopoly and it states that there is only
one company business that is offering the service or product.
Strategic management Plan
This is defined as the plant developed by management of organisation which demonstrate
strategies, tactics and overview of company. These strategies are able to provide effective
working of company and focusing upon resources as well as priorities of company. Strategic
management plan of Morrison is explained below –
 Mission statement - to become the best supermarket chain across the world.
 Vision statement - to enhance the customer satisfaction level by providing effective
services and quality products
 Aim and objective - to improve the competitive advantage within Market by using new
innovations and technologies
 Extensive marketing - this includes managing different strategies for attracting potential
customers
 Market research - Morrison has to conduct good market researches in order to evaluate
what are the requirements and needs of customers.
 Tactics -Morrison is using different tactics for increasing the customer value and using
latest technological advancement within business operations.
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CONCLUSION
It is analysed from the above discussion that competitive advantage is one of the most
important factor for any company to sustain within market for long period. There are different
models like SWOT analysis, porter's five forces model, porter's generic model and pestel
analysis which are used for evaluating external and internal performance within the company.
Ansoff matrix is used for achieving the knowledge regarding various strategies that can be used
by company for managing the functions.
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Online
Morrison's SWOT and PESTLE analysis, 2019. [Online] Available
through:<https://www.swotandpestle.com/morrisons/>
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