Impact of External Environment on Morrisons: PEST Analysis and Porter's Five Force

This report analyzes the impact of external environment on Morrisons through PEST analysis and Porter's Five Force. It examines political, economical, social, and technological factors and the intensity of competitor rivalry.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION
MAIN BODY
PEST ANALYSIS
PORTER’S FIVE FORCE
CONCLUSION
REFERENCES

INTRODUCTION
There are many external factors that effect the firm's productivity and profitability.
 Morrisons is one of the leading retail company in UK.
 It provides drinks and food items at stores and also available on the online platform.
 This report shows the impact of the external environment on Morrisons.

PEST Analysis
Political factor- These factors includes tax policies,
tariffs, trade reforms, etc. It also includes the
government interference and their influence on the
company.
Economical factor- These factors includes inflation,
interest rates, tax rates, growth and decline, etc. and
these factors gave negative impact on the Morrison as
economical factors influence the economy of the
country.

cont.
Social factors- It includes population growth rate, health and safety, cultural norms, etc. It
also includes social organizations as well as consumers that affect the demand and supply of
the products of Morrison.
Technological factors- These factors includes new and advanced technologies that are
introduced in the market and also influence the business. It also includes the social media
platform mainly the online shopping websites

Porter's Five Force
Threat of new entrants (Low)- Morrison introduced new products and also provides free
online services to attract the customers.
The bargaining power of buyers (Moderate)- Buyers want quality products at low prices and
always want discount and offers and for this purpose they bargains a lot this puts pressure on
Morrisons profitability.
The bargaining power of the suppliers (Moderate)- There are various suppliers of raw
material in the market. Morrisons buy the raw material for the manufacturing of their products
from these suppliers.

Cont.
The threat of new substitutes (High)- As the new substitutes and the competitors are
introduced in the market so Morrison have a threat of new substitutes or products on the same
prices as Morrisons have.
 The intensity of competitor rivalry (Moderate)- Morrisons is facing a number of rivals in
the market. Morrisons examine and analysis the intensity of the existing competitors and try to
expand its business by reaching and attracting new customers daily

CONCLUSION
 From the above report, it can be concluded that there are several external factors that affect
the growth, goodwill, profit percentage, prices of the products, sales as well as the success
of the company or organization.

REFERENCES
Books and journals
Hole, Y., Snehal, P. and Bhaskar, M., 2019. Porter's five forces model: gives you a competitive
advantage. Journal of Advanced Research in Dynamical and Control System. 11(4). pp.1436-1448.
Khalid, H. and et.al., 2020. PEST (political, environmental, social & technical) analysis of the
development of the waste-to-energy anaerobic digestion industry in China as a representative for
developing countries. Sustainable Energy & Fuels. 4(3). pp.1048-1062.
Kurnianto, A.M. and et.al., 2019. Marketing Strategy on the Project Planning of Retail Business for
Garage Shop. International Journal of Multicultural and Multireligious Understanding. 6(1).
pp.217-228.