Strategic Analysis of Wm Morrison: Internal and External Environment, Competitive Forces, and Value Net Model

This report analyses the internal and external environment of Wm Morrison, a supermarket company, using SWOT and VRIO frameworks, value chain analysis, PESTLE analysis, Porter's five forces, and the value net model. The report highlights the company's strengths, weaknesses, opportunities, and threats, and evaluates its competitive forces and value net model. The report concludes that the company should work with effective strategies to sustain and grow in the market.

Strategy Enterprise and
Innovation
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Table of Contents
Introduction ....................................................................................................................................3
Analysis of internal environment....................................................................................................3
Value chain Analysis..............................................................................................................5
Analysis of external environment....................................................................................................6
Analysis of competitive forces within the industry.........................................................................8
Strength and limitation of porter's five forces........................................................................9
Game Theory: Value Net Model...................................................................................................10
Conclusion ....................................................................................................................................11
References.....................................................................................................................................12
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Introduction
Strategic analysis of the company is the process that include the research of a business's
environment within which they operate. With the help of company's internal and external
environmental for developed the understanding of recognition of the future opportunities of
growth (Chaika, 2021). To complete this report the chosen organisation is Wm Morrison, a
supermarket company. It is the fourth largest chain of supermarkets in United Kingdom and its
headquartered is in Bradford, UK. At present company is dealing in food and drinks, clothing,
petrol, books and many more retailing service products or services to their customers. This
report highlight the analysis of internal resources and capabilities of the chosen company.
Furthermore, key drivers of external environment and its impact on the company will be
analysed in the report. In last, evaluation of porter's five forces and its impact on competitive
forces that make an impact on the company's activity will be analysed.
Analysis of internal environment
To analyse internal environment of the company, SWOT and VRIO are two framework
that helps in internal resources and capabilities to gain the competitive advantages. SWOT help
Morrison to strengthen its management framework that enable the brand to make benchmark and
compared with the competitors (Morrisons SWOT Analysis, 2021).
SWOT Analysis
 Morrison has built their expertise strategies for entering into the new market that make
them successful at most of times.
 Morrison has the strong cash flow into their operations which provide a significant
resources in company to expand the new projects.
 Over the years, company has built the reliable distribution channel that create the
majority in potential markets (Khrystyn and et.al., 2021).
Weakness:
 Comparing to the other companies, Morrison has the higher attrition rate this leads to
spend more within the company by comparing to its competitors on the training and
development sessions.
 The structure of Morrison, is not very good, so it leads to higher inventory management
in the both in-house and in channels.
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Opportunities:
 The new market development will lead to the competitors for the growth in advantages to
make enable Morrison’s for increasing competitiveness to the other competitors.
 New online channels help the company to expand their customer's base and gain more
opportunities.
 New and trending customers can develop the new market for Morrison’s that provide a
great opportunities for organisation and build a new customer segment (Li, 2021).
Threat:
 New technologies used by the competitors could be lead to serious threat for the
company as a long or medium term future.
 Rising pay level can lead the serious issue which are used to make pressure to gain
profitability of Morrison’s.
 In last, intense competition that put downward on profitability of the company and
decline the sales (Luo and Witt, 2021).
VRIO Framework
VRIO framework is strategic analysis that helps in designed the tools uncover and
protect the resources that make the long term competitive advantage. It is an acronym of
valuable, rarity, limitability and organization to evaluate the criteria of an organisation's
resources and different capabilities (The Morrison Company, VRIO, 2019.).
Resources Value Rare Imitable Organisation Competitive
advantage
Brand Image Yes Yes Yes Yes Long term
competitive
advantage
Technology
advancement
Yes Yes Yes Unused
competitive
advantage
Customer's
network and
Yes Yes Competitive
equality
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loyalty
Supply chain Yes Competitive
dis-balanced
 Value: When analysing for the valuable factors of Morrison, it is analysed that the
company have valuable brand image, different technology advancement for the growth in
market. Furthermore, customer's network and supply chain are the valuable resources of
the company.
 Rare: It is determined that the company, has their brand image as the rare resource
which can't be copied from any other company. Another resource is customer's network
and technology advancement are helpful for gaining effective management technique for
the growth in value creation factors (Mellahi and et.al., 2021).
 Imitable: While determining the imitable factor, is it analysed that brand image and
technology advancement are the factors of the company. That allow the organisation to
developed the sustained image in market and enhance the chance of sustainability in the
long term perspective.
 Organisation: Lastly, organisation factors that include the resources that only affect the
certain value of the company. In Morrison, only brand image is the resource that
understand the value of organisation and needed to be improvised in long term
perspective.
Value chain Analysis
It is based on the principles that an organisation exist to create the value for their
customers. In context to Morrison, the company either use downstream or upstream or both
distribution channel. The primary activities which Morrison involve are inbound logistics,
operations, outbound, marketing and services. As these are helpful to analyse the value of their
internal and primary sources. On the contrary, the company use firm appropriate infrastructure,
HRM department, Technology department and procurement. These services help the company to
support the primary analysis of the company.
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Analysis of external environment
In order to analyse on external environment of the company, it is important to use the
framework of Pestle analysis. The micro environment of the company include the external
customer of the company, competitors and suppliers (Mitropoulos, 2021).
 Political factors: These factors are tend to be altered by the influence of government
includes under this category. They may include the environment regulation, employment
law, tax policy, trade restriction and etc. Tax factors make an threat by cost of doing
business but also provides the opportunities for long term sustainability.
 Economic factors: The Company has major economic factors such as interest rate,
inflation and growth of economy across the world. Interest rate factors make opportunity
which are associated towards the growth and development if the company opted right
business strategies (Shaulska and et.al., 2021).
 Social Factors: The culture and social influence on the business may vary from the
country to country. Different lifestyle and health consciousness social factors make a
direct impact on the company as it include safety, demographics, population and cultural
aspects of the company and become the opportunity for the company. The usage of non-
sustainable products are decline which become the threat to the company.
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Illustration 1: Value chain model, 2021

 Technological factors: It is analysed that technology is one of the most important factor
that may be make a competitive environment for the high growth in market. Morrison
should innovate their products and services that become more compilable within the use
of technologies in market. The opportunities for the company is to use effective UK’s
government support and new growth into the market which leads to new productive
technologies into market.
 Legal factors: The Morrison Company include different legal factors that are associated
towards the certain laws and regulation that might impact on their business operations.
The threat for the company is pollution liabilities or having sustainable manufacturing
(Wang and Chomiak, 2021).
 Environmental factors: Sustainable and infrastructure factor make opportunity for the
company by giving company's strategy and provide the growth in retail industry by using
effective environmental strategies (PESTLE analysis with Mind Mapping, 2021). It have
their own threats which is related to difference in climatic change, pollution issues and
slow growth in the world’s economy.
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With the help of above mind map, it is determined that with the help of this tool different
information are captured on one page without losing a clear and concise structure. Mind
mapping helps in reducing the time needed and prepare the work in most effective and simple
structure (Yi, Li and Zhang, 2021).
Analysis of competitive forces within the industry
With the help of competitive forces, the impact of main competitive forces are used and
influenced for the entrepreneurial activities within the industry. Morrison Company used porter's
five forces that reflect the competitive environment of retail industry (Structure of porter’s five
forces analysis, 2021). Within the industry, the business make profitable approaches in
dependent upn the following forces:
 Competitive rivalry: The competition among the different helps for industry where the
companies work hard for maintain the power within the market. The competitive of
Morrisons are basically on the diversifying nature of the company (Zakrzewska-
Bielawska, 2021). Morrison has the high competitive rivalry in the market.
 Threats of new entrants: Most of the organisation plays a significant role in analysing
the treat to new entrants. There are different barriers which are faced by the companies
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Illustration 2: PESTLE analysis with Mind Mapping, 2021

that are related to industrial and legal aspects. There are different factors that are
associated to the different levels which are related to make a raw materials, barriers and
cultural aspects. Morrison has low threat of new entrants in the market.
 Threats of substitute: The Morrison Company provide different substitute products that
are available in the market in better prices. The use of substitute products are dangerous
as companies are not able to make constant threat in the market which is replaced. Threat
of the substitute are too high in the market of Morrison’s (Tedaldi and Giovanni, 2021).
 Bargaining power of suppliers: The main trick to establish a new source of competitive
method is to recognize the sources and make effective competitive forces. The supplier
of the company are the raw material providers like Chippindale Foods. They are the
suppliers to make concentrated for industry, heavily relying for the industry and high
cost for switching. The company should try to increase their suppliers and achieve
different conceptual data in different formats.
 Bargaining power of customers: The buyer have strong bargaining power on the
company as they can easily influenced with suppliers and make operations in the
marketing (Atiku and Abatan, 2021). The Morrison has low buying power as they have
large customer base and cost of switching is very low.
Strength and limitation of porter's five forces
Strengths Limitations
This model is helpful in gauging the high
competition and help the company to earn
good profit.
This factor ignore the other factors as well
which show the limitation of the model in
market.
Many of the industries require huge
investment, so this model helps the company
to helps in planning and provide a systematic
activities in their business model.
Another limitation is that no industry will be
perfectly fit with all the points which are
considered into the market.
It helps in dealing with external factors and
deal with the supplier and buyer of the
company.
This model is not useful for all the type of
industry to make technology, consumer taste
and other factors consist different factors.
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Game Theory: Value Net Model
The value net model is developed by Adam Brandenburger and Barry Nalebuff in 1996.
This model actually identify the key players of the company and helps the management team to
predict the behaviour with more accuracy (The Value Net Model, 2021.). This model include
four main type of players within the business, this includes:
 Customers: The people who wants to buy the products or services of the company.
 Suppliers: They provide the resources to an organisation for completing the production
of the company.
 Competitors: They offer the same products or services in the market and gain the
market share.
 Complementary: They are the one who provide a product or services that can be linked
to the products and make them more attractive to their customers.
In the context of Morrison, it can be said that this value net model is applied with the
PART Approach. That is used as an acronym for players, added value, rules, tactics and scope.
These steps are explained below:
Step 1: Identifying the player: Morrison try to identify their players who can easily
influence the decision making process of the company. Customers, suppliers of raw material,
organic food suppliers and the international customers are the major players of the company.
Step 2: Calculate the added value: Adding value within the organisation can be done
by the Morrison by measure the each individual of an organisation. Morrison's use USP model to
make something unique for their players.
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Illustration 3: The value net model, 2021

Step 3: Defining the rules: Every company have their own rules and responsibilities that
are helpful for measuring the success in future. Morrison's try to help the organisation by
implementing rules that limit the organisation's growth.
Step 4: Identifying the tactics: Each player of the organisation have their own
perception that make a foundation to your business. Morrison try to find out these tactics by
make credibility perceptual mapping and make better understanding with their views.
Step 5: Define the scope: This is the best way to understand the boundaries of the game.
But these boundaries can be extended by linking other markets or identifying any other goals.
Morrison try to redefine their boundaries and rules that allow the company to expand their
market at international level and applied to the success of the company.
Conclusion
From the above report, it has been analysed that company should work with effective
strategies that help them to work and sustain them in market. Furthermore, it is analysed that
internal and external environment help the company to determine new strategies and make high
growth in the market. In last, it is determined that porter's five forces are able to provide a
competitive growth and analyses of the company and provide a direction for make strategies to
develop into the market.
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References
Books & Journals
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algorithm. Information Systems and e-Business Management, pp.1-18.
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International Business Studies, pp.1-14.
Mellahi, K., Meyer, K., Narula, R., Surdu, I. and Verbeke, A. eds., 2021. The Oxford handbook
of international business strategy. Oxford University Press.
Mitropoulos, S., 2021. An integrated model for formulation, alignment, execution and evaluation
of business and IT strategies. International Journal of Business and Systems Research,
15(1), pp.90-111.
Shaulska, L., Kovalenko, S., Allayarov, S., Sydorenko, O. and Sukhanova, A., 2021. Strategic
enterprise competitiveness management under global challenges. Academy of Strategic
Management Journal, 20(4), pp.1-7.
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Frontline Services With Robotic Technologies. In Handbook of Research on
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Yi, L., Li, T. and Zhang, T., 2021. Optimal investment selection of regional integrated energy
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Zakrzewska-Bielawska, A., 2021. Ambidextrous Strategy: Antecedents, Strategic Choices, and
Performance. Routledge.
Tedaldi, G. and Giovanni, M., 2021. The role of Engineering-to-Order machinery manufacturers
in future Cloud Manufacturing supply chains: a business case and a strategic
perspective. Production Planning & Control, pp.1-13.
Atiku, S.O. and Abatan, A.A., 2021. Strategic Capabilities for the Sustainability of Small,
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Online
Morrisons SWOT Analysis, 2021. [Online]. Available through:
<http://fernfortuniversity.com/term-papers/swot/1433/1363-morrisons.php>.
PESTLE analysis with Mind Mapping, 2021. [Online]. Available through:
<https://www.ayoa.com/imindmap/blog/pestle-analysis-with-mind-mapping/>.
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<https://caserighted.com/the-morrison-company/>.
The Morrison Company, VRIO, 2019. [Online]. Available through:
<https://embapro.com/frontpage/vrioanalysis/18790-morrison-rfid>.
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The Value Net Model, 2021. [Online]. Available through:
<https://www.mindtools.com/pages/article/value-net-model.htm>
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