Internal and External Analysis of Morrison's: PESTLE and SWOT Analysis

This report provides an internal and external analysis of Morrison's using PESTLE and SWOT analysis. It covers the impact of macro environmental factors on business activities and function. The report recommends the use of strategic tools and frameworks to achieve long term growth and success in the market.

Principles of
Marketing

Table of Contents
INTRODUCTION AND BACKGROUND....................................................................................1
MAIN BODY...................................................................................................................................1
Internal analysis......................................................................................................................1
External Environmental Analysis...........................................................................................3
SWOT Analysis......................................................................................................................4
CONCLUSION and RECOMMENDATIONS...............................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION AND BACKGROUND
Marketing is an agile, holistic and data driven procedure which connects brands with
their targeted customers in order to drive and gain positive business results. In addition to this, it
is about fulfilling the needs and requirements of customer in a manner that leads to increase in
sales, profitability and productivity of an organisation. It is significant for an organisation to
develop an effective marketing so that they can reach to large number of customers easily and
enhance its market presence as well (Hockenberry, 2019). Understanding the positioning of an
organisation and the developments in its competitor’s organisation is significant in order to
develop strategic market plans and to attain competitive edge at marketplace.
The food retail industry of UK is regulated and the entry barriers is high as developing
effective outlets and efficient supply chains is expensive that resulted in heavy duty on
supermarket chains that is Morison’s, Tesco, Aldi and so on. For the present study, Morrison’s is
taken into consideration. It is the fourth largest chain of supermarket which was established in
year 1899 and headquartered in UK. The company has around 497 outlets globally which shows
it has high market presence and share as well. The present report will cover external as well as
internal analysis of Morrison's by using various frameworks that is Pestle analysis, Swot analysis
and so on.
MAIN BODY
Internal analysis
McKinsey 7S model is a strategy tool that helps to analyse organisational design of a
company (Razmi and et. al., 2020). This model depicts how an organisation can achieve
effectiveness and efficiency by focusing on 7 major elements that are staff members, shared
values, skills and their styles, and structure, strategy and system of the organisation. McKinsey
7S framework ensures that the competitiveness and performance level of Morrison’s is
maintained.
 Strategy: Morrison’s have a clearly defined and communicated business strategy, so that
stakeholders and employees of the organisation put their efforts to achieve the objectives.
Morrison’s guides and provides direction to the stakeholders, employees and staff so that
they work according to planned schedule. Morrison’s focuses on consistently changing
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customer demands and trends so that their needs can be fulfilled and competition can be
avoided. Flexibility and adaptability of the organisation help it to respond and adapt
quickly to the changing consumer patterns across various locations.
 Structure: Morrison’s have a flat organisational hierarchy that supports progression and
learning within the organisation. The company has high coordination among the
departments that provides better team collaboration and teamwork within the
organisation. Morrison’s have a hybrid structure that combines centralisation and
decentralization of power to make effective decision making within the organisation.
Morrison has developed a very integral communication method so that employees can
communicate between and at different levels of management.
 System: Morrison’s have a very in place and systematic organisational structure that is
departmental including finance, marketing & sales, supply chain management, human
resource, operations and strategic leadership. The departmentalisation has allowed the
organisation to have better control on various tasks and responsibilities by proper
monetary and evaluation of performance within the organisation (Mokhtar, 2021). The
departments work in coordination and proper processes are followed within all the
departments so that internal processes can be aligned and better results can be obtained.
 Shared values: The core values at Morrison’s are trust, accountability, transparency,
honesty, creativity and inclusion. The company ensures that all its business operations
and activities are highly ethical and moral that follows its benchmarking and redefined
standards. Morrison’s have a very viable and accessible corporate culture that alliance
with the values of the organisation so that organisation performs effectively and
efficiently.
 Style: Morrison’s leadership and management are based on participative leadership style
and democratic management so that the employees can interact with their leaders and
take part in decision making. This form of leadership is very much effective and efficient
because the employees are highly valued and that improves their performance at the
work. The suggestions, feedback, and ideas of the employees are accepted by the leaders
and managers that also focus on improving the performance of teams for achieving
objectives and goals effectively and efficiently.
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 Staff: Morrison’s has a sufficient number of employees working across its global outlets,
which are highly skilled and have gone through proper training and development so that
they can achieve better results for the required jobs (Faturrohman and et. al., 2018).
Morrison employs a large number of people who have required capabilities and capacities
to handle the organisation and functions of the business at various levels.
 Skills: Morrison’s had skilled workforces that works with high skills and capabilities and
are recruited on the basis of qualifications and merit. The employees are hired, trained
and acquainted according to their task requirements so that they have sufficient skills to
perform their jobs. Company provides regular training and development by internally and
externally managed growth and development opportunities so that the employees are
highly competitive.
External Environmental Analysis
It is stated that growth of an organisation is highly depend on the development that take
place externally as it has direct influence on the functions and activities of an organisation. In
addition to this, it is significant for an organisation to conduct external analysis as it help
developing effective strategies and also assist to deal with the changes that take in external
environment in an effective manner. For this, PESTLE analysis is applied in order to reflect on
the present market state of respective organisation and the industry as well.
PESTLE Analysis
PESTLE analysis is defined as a framework which is used by an organisation to analyse
the influence of macro environmental factors on business activities and function (Alanzi, 2018).
Along with this, it also helps to gain insight about the area which requires being focus by
company for dealing with external happenings and circumstances. The PESTLE analysis of
Morrison’s is discussing below:
 Political factor– It is analysed that Morrison’s is still facing the impact of Brexit and
COVID-19 global pandemic which directly leads shortfall in inventory, disruption within
supply chain and increase in price as well. On the other side, the government of UK is
supportive and help companies to expand its business operations globally which have
positive impact on the performance of Morrison’s.
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 Economical factor – It is determined that Morrison’s faced issue in the initial days of
local pandemic as the overall economy was put in lock-down. After the relaxation in the
government restrictions, there was growth in sales take place mainly in snacks (Gupta
and et. al., 2019). Moreover, Morrison’s has more funds to implement future operations
and sustain at marketplace as compare to its rivals as its buyout for around 6.4 billion
pounds.
 Social factor – It is analysed that Morrison’s was found as not paying minimum wages to
its employees and promise for the high pays, this issue affect directly on its brand image
in a negative manner. On contrary, the organisation always focuses on fulfilling the
requirements and demands of customers due to which is productivity and performance
has maintained at marketplace.
 Technological factor – Morrison’s always focuses on using innovative and new
technologies so that it can provide high customer experience and satisfy their
requirements which have positive impact on its performance level. Along with this, it is
using AI system in its outlet which is one its major competitive advantage as compare to
rivals. Furthermore, it is analysed that using of new technologies rapidly arise high cost
to company which sometimes decline its revenue level.
 Legal factor – The Company is facing issue as it has caught the public and legal heat as
compare to its competitors. The legal issue is not paying fair compensation to its lower
level workers and did not maintain the equal pay policy which develop negative mind-set
of staff members towards brand and decline their productivity as well (Gheibi and et. al.,
2018).
 Environmental factor – In context to sustainability, Morrison' is better as compare to its
rivals as it has gained various official recognition and honours from authoritative bodies
on its imitative of declining consumption of plastic. Moreover, it also focusses on aiming
zero carbon emission by year 2035 that affect positively on its brand image and
performance.
SWOT Analysis
It is referred as a strategic tool that is applied by a company in order to analyse the
strengths and weaknesses so that an effective strategy will be develop in order to overcome with
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it (Landmann and et. al., 2020). In addition to this, it also assists an organisation to improve its
performance level which is vital in order to gain growth and success at marketplace. The SWOT
analysis of Morrison’s is discussed below:
Strengths
 It is analysed that Morrison’s offer
large number of products which help
company to increase its customer base
level and profitability.
 High network of supply as well as
distribution in all over the world.
Weaknesses
 One of the major weakness of the
company is non-satisfied employees
because of which its performance and
productivity is declined.
 The supply chain has impacted because
of Brexit and COVID-19 which is not
easy to recover.
Opportunities
 Morrison’s has the opportunity to enter
into the new market and increase its
market share and presence.
 The use of Artificial intelligence and
automation help company to execute
activities in a proper manner.
Threats
 The major threat of company is its
rivals such as TESCO, ALDI and many
more.
 The company is facing legal issues
which negatively impact on its brand
image (Liu, 2020).
CONCLUSION and RECOMMENDATIONS
From the above report it can be recommended that marketing activities of a company can be
improved with the help of proper macro and micro analysis of the business aspects. It is
recommended that the organisation can use certain tools and frameworks of macro and micro
factor analysis to identify effective strategies that the organisation can follow to achieve greater
performance. It has been identified in the report that the McKinsey 7S model that consists of 7
elements like staff, shared values, skilled, style, structure, strategy etc. can be used to improve
market share and market growth of the organisation. Moreover the report has presented PESTLE
analysis that can be used by the organisation to identify the macro environment factors that affect
the activities of business and understand how to deal with the challenges in the extrinsic
environment. Finally SWOT analysis of the organisation has been provided that can be used by
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the organisation to improve its performance and achieve success at the marketplace by using its
strength and opportunities. These frameworks and strategic tools can be used by the organisation
to achieve long term growth and success in the market.
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REFERENCES
Books and Journals
Alanzi, S., 2018. PESTLE Analysis. Project Management.
Faturrohman, F. and et. al., 2018. Application of RBV Theory and McKinsey 7’S Model on
Start-up Company. Scientific Journal of PPI-UKM, 5(1), pp.1-6.
Gheibi, M. and et. al., 2018. Controlling air pollution in a city: A perspective from SOAR‐
PESTLE analysis. Integrated environmental assessment and management, 14(4), pp.480-
488.
Gupta, A. and et. al., 2019. British Airways-A SWOT and PESTLE Analysis-The impact of
Europe 2020 policy. NOLEGEIN-Journal of Corporate & Business Laws, 1(1), pp.1-11.
Hockenberry, T., 2019. Marketing isn't just for products and services. The Journal for Quality
and Participation, 41(4), pp.17-19.
Landmann, E., and et. al., 2020. Customer integration through virtual reality implementation: a
SWOT analysis in the area of production systems. In Augmented Reality and Virtual
Reality (pp. 253-266). Springer, Cham.
Liu, R., 2020, December. Research on the Export Development of Small and Medium-sized
Enterprises Cross-border E-commerce: Based on SWOT analysis. In 2020 International
Conference on Big Data Economy and Information Management (BDEIM) (pp. 112-115).
IEEE.
Mokhtar, S.H., 2021, March. McKinsey’s 7S: A framework for sustainable environmental
analysis. In IOP Conference Series: Earth and Environmental Science (Vol. 685, No. 1,
p. 012005).
Razmi, J. and et. al., 2020. An assessment model of McKinsey 7s model-based framework for
knowledge management maturity in agility promotion. Journal of Information &
Knowledge Management, 19(04), p.2050036.
Online
More than 1,100 Morrisons staff could strike over pay dispute, warns Unite as balloting starts,
2022 [online] available at https://www.business-live.co.uk/retail-consumer/more-1100-
morrisons-staff-could-22180716
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