Unit 32 Assessment: Analysis of Morrisons' Macro and Internal Environment, Strategic Management Plan

This report analyses Morrisons' macro and internal environment through PESTLE, Stakeholder, SWOT, VRIO analysis and Porter's Five Forces model. It also proposes a strategic management plan for global expansion using Bowman Clock and Ansoff Matrix.

Unit 32 Assessment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Analysing the macro environment of Morrison through Pestle and Stakeholder Analysis.........3
Evaluation of Internal Environment of Morrison by using Swot and Vrio analysis...................5
Porter's Five Forces of Morrison to improve competitive edge and market position..................7
Strategic Management Plan.........................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10
Books and journals.....................................................................................................................10
Online.........................................................................................................................................10

INTRODUCTION
Morrisons is the fourth largest supermarket chain in the United Kingdom. The company
is headquartered in England. This report will analyse the macro environment of the company
through pestle and stakeholder analysis of the company, Internal environment of the company is
evaluated through SWOT and VRIO analysis of the company. Porter's five force model will
outline the company's competitive edge. Lastly the report will draft a strategic management plan
for the company.
TASK 1
Analysing the macro environment of Morrison through Pestle and Stakeholder Analysis
Pestle Analysis
Factors affecting the macro environment of the company through PESTLE analysis -
 Political: The government legislations levied cause a huge impact on food retailers.
Brexit has caused many uncertainty in policies and regulations and also affects trading
with non EU markets.
 Economical: Brexit caused inflation and significant fluctuations in currency. The rise in
oil prices and other products made the customers budget tighter which affects company's
sell (Pestle analysis of morrisons, 2022). The company's good relations with local
suppliers help in maintaining fair prices as it does not have to import high quantity of
products which are now available at hiked prices.
 Social: The consumers are now educated and prefer good quality and healthy products.
Morrison's own branding of eggs, fresh meat and milk helps it achieves customer
satisfaction.
 Technological: Investment in new technology and artificial intelligence and continuous
research and development lead to low cost and efforts making business efficient and time
saving and improvement in in-house system and software.
 Legal: It has to comply with food safety and legal standards , employment laws ,
consumer protection laws and many other such laws to avoid lawsuits. There have been
some changes in such policies and laws after Brexit , so thorough study and adequate
changes will be done accordingly.

 Environmental: It reduced operational carbon emissions , plastic usage for packaging
and delivery and poly cartons were replaced by returnable bins. Glass pints usage
increased instead of plastic bottles.
Stakeholder Analysis
Stakeholders are those who have interest in a company and can affect or be affected by
company's operations. They are generally categorized based on their level of interest/need ,
power, influence, support/attitude (Roy and et.al., 2019). The different groups of stakeholders on
the basis of the caused on them are:
Primary stakeholders — Those who are the most affected,
Secondary stakeholders- The intermediaries those who are indirectly affected
Tertiary stakeholders — The least affected.
The most common presentation is where two-dimensional matrix is used showing the level of
power and interest.
POWER-INTEREST MATRIX
High Power KEEP SATIFIED
 Customer
 Government
MANAGE CLOSELY
 Owners
 Investors
Low Power MONITOR
 Employees
 Creditors
KEEP INFORMED
 Trainer/Developer
 Suppliers
Low Interest High Interest
In the above table, the stakeholders are divided in groups based on their power and interest.
Here, power flows vertically where power is high on top and low on bottom and Interest flows
horizontally where it is low on the left and high as it moves to the right.
In the top left grid is the group that the company has to satisfy which has high power but low
interest which includes customers, government.

In the top right grid is the group that closely manages the organization's affairs and also has high
power and high interest which includes owners, investors.
The bottom left grid shows the monitor group that has low power and also low interest. This
includes employees and creditors.
The bottom right grid shows group of people who have low power but high interest like
trainers/developers and suppliers.
Evaluation of Internal Environment of Morrison by using Swot and Vrio analysis
Swot Analysis
Strengths Weaknesses
 Excellence in food making skills.
 The distribution network of Morrisons
is dynamic.
 The company has efficient supply
chain.
 With the 'MyView' features and 'More
card' programmer company constantly
focuses on being highly customer
oriented.
 Large product portfolio with
customization.
 The geographic presence is limited.
 Response to changes are not taken
timely.
 Brand label recall is poor in customers
also company do not have much
concern with loyalty program to boost
customer brand loyalty (Swot analysis
of morrisons, 2025).
Opportunities Threats
 Creation of global presence for
becoming largest retailer for grocery
and expanding at international level.
 Company can tap the market of
growing needs for organic products.
 Company can cater the needs of private
labels rising demand.
 Smaller companies can be acquired
 Change in rules and regulations in
related sector.
 Highly competitive market.
 Technological risks are high.
 Physical retail stores can face issues
due to rise in e-commerce businesses.

through strategic partnerships for
growing the business.
VRIO Analysis
Resources Value Rare Imitation Organization
Human Resource    
Financial Resource    
Technology    
Brand Awareness    
Customer Loyalty    
VRIO analysis is the extended version of Morrison company's pestle analysis. The
company use VRIO analysis for understanding its resources, competitive edge, value proposition
and the value of organization in the market. The valuable factors of the organization are analysed
through VRIO model (Ariwibowo, Saputro and Haryanto, 2021). Efficiency of the supply chain,
maintenance of value chain, technology, etc. are the value factors that are offered to the company
and these value factors in turn makes organization efficient to offer similar value to consumers
through its products.
It analyses the factors that are rare within the Morrison. It allows organization developing
to have competitive edge over the industry through its capabilities. The analysis of value factors
highlights the areas through which organization can build its market based on the factors that
create value.
Determination of imitable factors is also done through VRIO analysis. The factors that
can be imitated by competitors are outlined for the analysis. Absence of imitable factors provide
competitive advantage to the firm.
In organization factors all the factors that are included in the resources and functions of
the Morrison and add value to the company are evaluated.

Porter's Five Forces of Morrison to improve competitive edge and market position
The porter's five forces for Morrison company is used to reflect the competitiveness in
environment of the industry. Porter's five forces is a strategic tool used for avoiding or
minimizing the risk to the least (Bruijl, 2018). The risk is for losing the competitive edge that the
company holds.
Risk is crucial to avoid or minimize for ensuring in long run the profitability of the
products. Close grip on the vision of the company helps to attune the investments and strategies
with innovation. Following are the five forces:
Competitive rivalry
The competition between existing firms in an industry identifies the attractiveness of the
industry. In a lucrative industry all the firms try hard to compete with each other for maintaining
the power within the industry. Diversity, inside sector development and entrance related barriers
are the factors on which competition of Morrison company is based. A detailed analysis of
strengths and weaknesses, policies and strategies, brands and products offered by the competitors
is done for analysing competitive rivalry.
Threats of new entrants
Morrison tries to create obstacles for new entrants to the industry to prevent their entry in
the industry. The new entrants can be organizations that are new companies, or they can be
existing companies trying to diversify their existing business. The barriers created by the
company are industrial and legal (Tomar, 2020). Size and reputation of the companies that are
planning to diversify their business in the industry also plays a vital role. The other factors are
cost involved for entry, access to raw materials, culture and tech standard barriers that plays
strong role in affecting the market entry decision by new entrants.
Threats of substitute
Substitute products means the alternative products that consumers can purchase in place
of Morrison company's products. Costumers tend to shift towards alternatives available in the
market if they are available at better prices to them. So its very necessary for the company to
have a close knowledge of pricing policies of their competitors (Saarikko, Westergren and
Blomquist, 2020). The products that the company is offering should be technologically advance
and innovative and available at better prices with the best quality to avoid the substitute selection

by the consumers. The substitute products are dangerous for the company as they imply constant
threat of being replaced in the market.
Bargaining power of suppliers
Suppliers possessing high bargaining power have negative impact on the company as they insist
on charging high rates from the company forcing it to compromise on quality and quantity of
product being offered to the customers. Bargaining power of the suppliers is more if:
 The number of suppliers are less and the number of firms dependent is large.
 The suppliers are not relied on industry for their profits.
 Cost of shifting to other supplier is high for the company.
 The distance between firm and manufacturing unit of supplier is more, resulting in high
transportation costs.
 Highly differentiated product being offered by supplier. Absence to close substitute to the product of supplier.
Bargaining power of customers
There is high influence of buyers with high bargaining power over the profitability of the
company. The power of buyers is more or less based on their interest in the product. High
product interest means low bargaining power of the buyer. On the other low interest in product
on the customer side results in high bargaining power in the hands of buyer. Morrisons company
customers are deemed to have strong bargaining power especially because the industry is price
sensitive.
Strategic Management Plan
The strategic plan recommended for Morrison is focussed on creating global presence of
the company. In order to achieve the mission of entering global market certain objectives are set:
 Establishing five super markets in France by the end of 2024.
 Acquiring 25% of total grocery retail market share in France market. Increasing market share to 15% in United Kingdom.
Bowman Clock Model
It is a strategic tool providing options to position within a market based on price and
perceived value (Weston and Nnadi, 2021). The bowman clock model comprise eight positions:
 Low price and low value added: Products are low in price and quality.
 Low price: Products are offered at lowest possible price and produced in bulk.

 Hybrid: Offering differentiated product and low price.
 Differentiation: Focussing on differentiating products.
 Focused differentiation: Offering high value products at high prices.
 Risky high margins: High price point without added value consciousness.
 Monopoly pricing: Single company controlling product and pricing.
 Loss of market share: Company is exiting market.
It is recommended for the company to use hybrid position. Hybrid position will be
beneficial for the company as it ensures the competitiveness of price and promotes the value
added aspects of the product.
Ansoff Matrix Model
Firms use Ansoff Matrix model to analyse and plan growth strategies. The matrix
highlights four strategies that can be used with the perspective to grow (Yin, 2016). The four
strategies are:
 Market Penetration: Focus is on increasing sales of the products company already deals
in and in the existing market.
 Product Development: Focus is to introduce new products in the existing market.
 Market Development: Through this strategy focus is on entering completely new market
but with the usage of existing products.
 Diversification: Focus is on entering new market with the new products being introduced.
It is recommended for Morrison to use market development strategy. It is beneficial for
company as this strategy will help in improving the quality of products, acquiring new
customers, increasing revenue margins and building organizational resilience with generation of
more sales.
Monitoring and control
To monitor and control the strategic management plan for growth and expansion the
company is following benchmarking methodology. Benchmarking is a tool that is systematized
for allowing determination of organizational performance and activities based on certain
standards that are benchmarks for doing activities (Mears and et.al., 2017). Morrison will choose
the company standard or the competitor to compare its results.

CONCLUSION
Based on the above report the external and internal environment of Morrison have been
evaluated using PESTLE and Stakeholder Analysis and SWOT and VRIO Analysis. The Porter's
Five forces model has been used to discuss the competitive edge of the company. Lastly the
report has proposed a strategic management plan for making the company a global company for
this the report has used bowmen clock model and Ansoff matrix.
REFERENCES
Books and journals
Roy, K., and et.al., 2019. India’s response to adolescent mental health: a policy review and
stakeholder analysis. Social psychiatry and psychiatric epidemiology, 54(4), pp.405-
414.
Weston, P. and Nnadi, M., 2021. Evaluation of strategic and financial variables of corporate
sustainability and ESG policies on corporate finance performance. Journal of
Sustainable Finance & Investment, pp.1-17.
Ariwibowo, P., Saputro, F. B. and Haryanto, H., 2021. Analysis of Strength & Weakness, Using
the Concept of Resource-Based View with the VRIO Framework in Sharia
Cooperatives. Jurnal Manajemen Strategi dan Aplikasi Bisnis, 4(1), pp.279-294.
Bruijl, G. H. T., 2018. The relevance of Porter's five forces in today's innovative and changing
business environment. Available at SSRN 3192207.
Tomar, D., 2020. Porter’s competitive forces model and SWOT analysis to
payments. International Journal of Information, 10(2), pp.45-49.
Yin, N., 2016. Application of AHP-Ansoff matrix analysis in business diversification: The case
of Evergrande Group. In MATEC Web of Conferences (Vol. 44, p. 01006). EDP
Sciences.
Mears, L., and et.al., 2017. Mechanistic fermentation models for process design, monitoring, and
control. Trends in biotechnology, 35(10), pp.914-924.
Saarikko, T., Westergren, U. H. and Blomquist, T., 2020. Digital transformation: Five
recommendations for the digitally conscious firm. Business Horizons. 63(6). pp.825-
839.
Online
Pestle analysis of morrisons. 2022. [Online]. Available through:
<https://corporatefinanceinstitute.com/resources/knowledge/strategy/pestel-analysis/>
Swot analysis of morrisons. 2025. [Online]. Available through: <https://howandwhat.net/swot-
analysis-morrisons-morrisons-swot-analysis/>