Global Business and Strategy

This report discusses the external and internal analysis of a global business, Morrison, and identifies suitable competitive advantages for the organization. It also provides strategic recommendations based on the analysis. Topics covered include PESTLE analysis, Porter's generic model, and the impact of political, social, economic, technology, environmental, and legal factors on the business.

GLOBAL BUSINESS AND
STRATEGY
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Table of Contents
INTRODUCTION...........................................................................................................................3
External and internal analysis of business..............................................................................3
Organization sustainable competitive advantage...................................................................7
Strategic recommendations based on above analysis and discussion....................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Global business refers to international trade whereas a worldwide business is
organization doing business all around the world (Peng, 2016). It defined as economic or
corporate activity that takes places across several nations. Global business develops different
kinds of strategies in order to sustain for longer. Strategies help companies to hold the leading
position within specific sector effectively. The present report is based on Morrison, it has large
supermarkets chain that they operate efficiently. Company is considered as fourth biggest chain
of supermarkets in UK, they are able to earn profit rather than its competitors. It explains internal
and external analysis of business, identify firm suitable competitive advantages and justifies
strategic suggestions based on analysis.
External and internal analysis of business
PESTLE Analysis-
PESTLE analysis is the best framework it helps in identifying the significance external
factors that affect growth and success of retail sector and companies operating under it. Here,
this analysis is conduct in order to identify the several factors that impact on Morrison operations
and overall business.
Political factor-
The government within nation is likely to change in few years, the government of UK is
also reformed and it bring range of modifications in policies as well as regulations that impact on
retail sector the most. All it happens because of Brexit that is the major political action and
reason behind change in regulations. The trade procedure or policies related to this is also
changed that affect business of Morrisons (Wright, Smith and Hellowell, 2017). Due to this
political activity, it gave rise to change in customers behaviour towards some commodities. The
rise of taxes makes major impact on company that governed by government for supermarkets
which affect profitability and productivity as well. Change after Brexit in taxation policy bring
series of problems for retail industry and its companies. The high rate of taxation has the power
to demotivate Morrisons from increasing their profit. They have to deal with this issue
throughout taking appropriate actions legally.
Economic factor-
Current stage of economic cycle, foreign exchange rate, changes in inflation rate and
interest rate and demand for employment after Brexit are the economic factors that affect retail
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industry and organizations working under it since for so long. Due to Brexit, many people loss
their job, they cannot be able to live life and fulfil the needs of their family members (Cappelli,
Montobbio and Morrison, 2018). By considering the high level of unemployment in nation,
government take significant action they put pressure on retail firms to employed residential
people in their companies, that affect employment policies and rules of Morrison. The high rate
of unemployment in UK mean that the supply of jobs is greater than demand. Local people are
willing to work for lower income which lower costs of company. It would make positive impact
on organization, gave opportunity to hire those people who are willing to work for lower wages
is save the cost of business.
Social factor-
Changes in consumers preferences, attitudes, belief and values that majority of people
hold in community affect the way company manufacture their products or services for people. In
simple term, social factors that impact organization is direct reflection of society that firm
operates in. it just not affects operational function but also make impact on marketing activities
that is quite expensive for Morrison to change according consumers preferences (Steven and
et.al., 2017). Changes in buying behaviour and preferences of clients make major impact on
business success, without considering all aspects company cannot be able to sustain for longer.
Changes happen when the new trends in market will occur that change the current preference of
people effectively. But these changes are not good for firm, it affects production procedure and
marketing actions regarding products that consume a lot of time and required depth research.
Market research activity require more investment and efforts that directly impact on financial
budget of business and existing planning.
Technology factor-
Technology quickly dismantle competitive landscape and price structure of retail industry
in short amount of time. Thus, the advancement of technology makes positive impact on
Morrison food production and packaging system (Innes and Morrison, 2017). It allows to pack
the food items without human resource, it also increases the operational efficiencies rather than
before. Technology advancement strengthen the delivery procedure and give power to supply
products to consumers within short term period that create good image of business in mind of
people. In simple words, the wider technologies shifts happing in industry is focusing on
computer and information technology with internet business leading way. Due to advancement,
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organization grab the opportunity for using specialized trucks and equipment specially
manufactured for supermarkets. Deep freezer trucks are one of the latest technologies that
enhance the power of business to assurance exclusive quality and taste they offer to its
consumers.
Legal factor-
These factors define need of company to operate under legislations and laws that
beneficial in developing an effective code of conduct and framework. These laws include
employment law, future legislations, consumer protection and competitive law that affect
business performance and practices within retail sector. Changes in existing employment law put
pressure on Morrison to restructure their employment policies and strategies that is quite
effective for workers, but it affects business profitability and financial budgeting (Hyman, 2019).
In Employment act 2019 government make some changes that drive towards employee safety
and privacy at workplace. According to these changes Morrison have to deal with many
problems, they had to improve HR practices which consume time as well as money. It caters
basic working conditions and terms for workers through core provisions that provide additional
protection. All these changes require a lot of efforts and human resource to gather more data
about Employment law and its affect.
Environmental factor-
Rise of environmental and ethically conscious consumers who rapidly demand companies
to adopt practices such as use of recycled materials and paper packaging instead of plastic is
recent trends that influence Morrison business within retail industry (Jones and Morrison-
Saunders, 2016). Environmental concern of UK government and people are now international
problem, Mintel investigation reflecting that more consumers are now focusing enough about
environment safety that they are prepared to practices its economic power to stop purchasing
services and products from organizations that do not make contribution in environmental safety
and show environmentally friendly credentials.
SWOT analysis-
Strength-
Morrison have much strength for their progress that’s why firm is progressing so fast,
they are able to provide quality food products to its consumers. Organization key strength is
offering value for price to their target market (Lebo and Morrison, 2015). Providing good and
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fresh quality food goods at low cost is positive point that plays vital role in consumer retention.
Company has wider number of stores in almost every state, maintained by strong distribution
network that assure that business goods is available simply to target market in effective manner.
They are able to offer low cost products, the lower costs framework of company help it sell their
goods at low price, making it affordable for people. Organization have wider asset base, which
give it with better solvency. By having the skilled workforce Morrison strengthen their power
they are able to serve its services or goods in large area, that happen only due to talented
applicants in workplace.
Weaknesses-
The success of business is depending on availability of resources which they have, due to
lack of effective online presence the enterprise suffers a lot. It creates major problem for
organization, that affect consumer base and sales (Haleem and Jehangir, 2017). Because of
company lack of online presence & convenience outlets, the decline in clients spending occur
which make negative impact on Morrison business growth as well as longer term success within
marketplace. Less consistency in consumers satisfaction is also issue for organization. As
compare to TESCO and its competitors’ company has limited geographical reach that affect
negatively. Lack of appropriate financial planning is another problem at Morrison regarding cash
flows that impact on financial budgeting. Company lead to certain circumstances where there is
not quite enough cash flow as needed lead to unnecessary unorganized borrowing. The firm also
have low stage of current resources compared to recent liabilities; it creates fluidity issues for
business operations.
Opportunity-
Technology developments or advancements give one of the best opportunities for
Morrison as they can take benefit form this and increase profit margin rather than. It comes with
range of benefits among several departments (Morrison, 2016). Operations in company will be
automated to decrease costs, it allows better data to be gathered on consumers and enhance on
marketing efforts. With the help of advanced technology firm is able to implement within overall
business and increase operational efficiencies that support to gain competitive advantages as
well. Company can use technology or new software to conduct research which make them able
to gather relevant & proper information about current trends in market and preferences of people.
They can use digital technology enhancement give chance to build strong and effective online
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presence that attract potential and new clients towards company, as it allows increase
profitability. With the help of collecting data, production management manufacture products
accordingly.
Threats-
Increasing competition within retail sector posses’ threat for Morrison, it put negative
impact on company revenue and market share. Due to high competition in market, organization
had to deal with major problems that affect business position. In simple words, rises in
competition lead to reduced profit for company, they can loss its market share which is not
suitable for business, they cannot be able to sustain for within marketplace. There are several
struggles that Morrison face due to competition within retail sector as it has negative affect on
growth of company. The competitors of firm try too hard to win greater share by cutting costs,
lowering price, improving efficiency and innovating by either making new services and products
or improving upon old ones. Competition tends to provide customers better product at lower
prices. Furthermore, it gives people chance to switch to another brand who can offer the better-
quality goods, it possesses threaten for Morrison.
Organization sustainable competitive advantage
Suitable competitive advantages are Morrison attributes, capabilities and assets that is
quite difficult to exceed and duplicate; and offer favourable or superior long-term position over
competitors. It needed for organization to thrive in current international environment, value
investors search for business that are bargains. Without effective suitable competitive benefits
business will not be able to recover from whatever triggered stock to become a bargain. There
are different types of sustainable competitive advantages available for company which they can
use for increasing profitability. It defines through suitable framework;
Porter’s generic model-
Porter’s three generic strategies focusing on making strategies that support to gain
competitive benefits from three various bases. The two-common kinds of competitive advantage
joint with scope of actions for which Morrison seek to achieve them, it led to three generic plans
for achieving above average performance in retail sector; differentiation, cost leadership and
focus, the focus strategy is divided into two variants, differentiation focus and cost focus.
Cost leadership-
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In this strategy, company sets out to become lower costs producer in this sector, sources
of cost benefits are depending and varied on structure of retail industry (Hunjra, Faisal and
Gulshion, 2018). They include purist of economies of scale, preferential access to raw materials,
proprietary technology and other factors. Cost leadership is developing competitive advantages
by having the low cost of operation in organization. It often driven by business efficiency, scale,
learning curve, size and scope. It is one of the best strategies that Morrison can use to gain
competitive advantage in market and become a leader in market.
Differentiation-
In Differentiation strategy, a company seeks to be different or unique in their sector along
some dimensions that is broadly valued by consumers (Shen and et.al., 2015). It chose one or
more attributes that customers in retail sector perceive as essential, and uniquely positions
themselves to match those requirements. When Morrison use this strategy, they rewarded for
their uniqueness with premium price. It makes organization products unique in existing market
and allow building consumers loyalty. Furthermore, by using this strategy firm has to make their
products as exclusive as possible, creating it more good-looking than competitors do.
Cost focus-
When Morrison adopt this strategy, they can be led to cost advantages in their target
segment (Uluskan, Godfrey and Joines, 2017). The third strategy of porter, is focus, it rests on
choice of narrow competitive scope within sector. Focuser choice segment in industry and tailors
their strategy to offering them to exclusion of others. This strategy has two alternates, such as
cost focus and differentiation focus. When firm use this strategy, they have to select to target a
clear niche market, through comprehension needs of consumers, they can assure that costs
remain lower.
Differentiation focus-
It is one of the focus variants that help Morrison to lead competitive advantages and gain
benefits within market place that is suitable for business (Sidhu and Mather, 2017). This strategy
focus organization seeks differentiation in their target market. It includes strong brand loyalty
among existing customers, it is very essential to assure that Morrison products within their
supermarket remains unique in price and quality in order to sustain for longer and to stay ahead
of possible competition.
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Strategic recommendations based on above analysis and discussion
From above analysis, it has been summarized that Morrison face several issues due to
political, social, economic, technology, environmental and legal factors. In order to deal with
these major problems company has to take appropriate action. They are highly recommended to
follow the rules and pay taxes according to changes in previous. To retain consumer for longer
with business, company suggested to understand its consumer preferences. Through
comprehension of people, their lifestyles, beliefs in community and segment of society Morrison
can be achieve its business objectives. It would help produce and design goods and marketing
messages that lead to organization becoming success.
To reduce the impact of changes in Employment policies and make business progressive,
Morrison are recommended to modify their employment structure. Company must hire local
people and provide all facilities that prevent workers from harm. They have to implement all
changes in employment policy, offer training opportunity that help applicants to enhance their
current skills and develop the new one.
To become a leader in retail sector and gain competitive advantages, company is
suggested to adopt cost leadership. They must target broad market and offer lowest price with
this strategy. Organization keep costs lower that help to retain consumer, it allows to attract the
new ones. Company apply this strategy effectively as they have substantial investment capital at
its disposal, low costs and efficient logistics when it comes to labour and raw materials.
Firm must adopt low pricing strategy; it helps them to keep competition out by being low
cost provider. It supports to build brand loyalty and consistently retained people.
CONCLUSION
From above, it has been concluded that company is facing different problems after
making changes in government policies, legal factors and technology as well. With the help of
taking appropriate decision after considering the current environment within retail sector,
Morrison is capable to gain competitive advantages. Furthermore, by adopting new technologies
within their business organization enhance their operational and functional efficiencies.
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REFERENCES
Book and Journals
Cappelli, R., Montobbio, F. and Morrison, A., 2018. Unemployment resistance across EU
regions: the role of technological and human capital (No. 1831). Utrecht University,
Department of Human Geography and Spatial Planning, Group Economic Geography.
Haleem, F. and Jehangir, M., 2017. Strategic Management Practices by Morrison PLC, UK.
Analysis, Lessons and Implications. Middle East Journal of Business. 12(3).
Hunjra, A.I., Faisal, F. and Gulshion, F., 2018. The Impact of Cost Leadership Strategy and
Financial Management Control System on Organizational Performance: An Empirical
Investigation of Pakistani Service Sector. The Lahore Journal of Business, Forthcoming.
Hyman, R., 2019. Unions and employment in a market economy: strategy, influence and power in
contemporary Britain: by Andrew Brady, London, Routledge. 2019. 209 pp., ISBN: 978
1 138 48987 5.
Innes, M. and Morrison, B., 2017. Projecting the future impact of advanced technologies: Will a
robot take my job?. InPsych: The Bulletin of the Australian Psychological Society
Ltd. 39(2). p.34.
Jones, M. and Morrison-Saunders, A., 2016. Making sense of significance in environmental
impact assessment. Impact Assessment and Project Appraisal. 34(1). pp.87-93.
Lebo, Z.J. and Morrison, H., 2015. Effects of horizontal and vertical grid spacing on mixing in
simulated squall lines and implications for convective strength and structure. Monthly
Weather Review. 143(11). pp.4355-4375.
Morrison, M., 2016. SWOT analysis made simple–history, definition, tools, templates &
worksheets.
Peng, M.W., 2016. Global business. Cengage Learning.
Shen, H and et.al., 2015. Mesenchymal stem cells for cardiac regenerative therapy: optimization
of cell differentiation strategy. Stem cells international. 2015.
Sidhu, S. and Mather, G., 2017. How to increase the sales revenue using focus differentiation
strategy.
Steven, R and et.al., 2017. Using a choice experiment and birder preferences to guide bird‐
conservation funding. Conservation biology. 31(4). pp.818-827.
Uluskan, M., Godfrey, A.B. and Joines, J.A., 2017. Impact of competitive strategy and cost-focus
on global supplier switching (reshore and relocation) decisions. The Journal of The
Textile Institute. 108(8). pp.1308-1318.
Wright, A., Smith, K.E. and Hellowell, M., 2017. Policy lessons from health taxes: a systematic
review of empirical studies. BMC public health. 17(1). p.583.
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