Strategic Management Practices for Morrisons: An Analysis

This report analyzes the strategic management practices of Morrisons, the fourth largest chain of supermarkets in the UK. It includes a case study approach, a recovery plan, and a risk management strategy. The report also demonstrates an understanding of Porter five forces model and its practice with real-world examples.

Strategic management

Contents
INTRODUCTION...........................................................................................................................1
MAIN ANALYSIS .........................................................................................................................1
Case study approach ...................................................................................................................3
A recovery plan ...........................................................................................................................5
Risk management strategy ..........................................................................................................6
CONCLUSION ...............................................................................................................................7
RECOMMENDATIONS ................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management can be understood as a continuous planning, monitoring, analysis
as well as assessment in relation to suitable necessities which are required by an organisation for
attaining their goals and objectives (Akyuz and Gursoy, 2020). It provides overall direction to
employees through developing their plans as well as policies which are formulated to accomplish
pre-determined objectives. It also covers allocation of resources for successful implementation of
plans and policies. Main purpose of strategic management practices is to identify as well as
understand specified organisational objectives. In order to have better understanding of strategic
management practices, Morrisons is taken into consideration. Morrisons is fourth largest chain of
supermarket in UK which was established in 1899.
This project report highlights an understanding of strategic management practices that are
considered relevant for organisations for accomplishing their objectives. This project report also
demonstrates an understanding of Porter five forces model and its practice with real world
examples.
MAIN ANALYSIS
Strategic management is considered as important as it aid decision-makers into getting
equipped with management tools as well as anticipate changes which helps in directing
organisational activities in a strategic manner (Alieinykov and Et. Al., 2019). It is essential for
businesses to maintain a long-term success and essentially involves formulating a business
strategy which is streamlined for achievement of pre-determined objectives. It principally
enables business outcomes, creation of customer value and competitive differentiation. It is
imperative for business organisations to assess their strengths and weaknesses in order to
formulate as well as execute the strategies in an effective manner.
Porter five forces can be understood as a strategic tool which is used by business
organisations to assess their market competitiveness as well as attractiveness in a strategic
manner (Barbosa, Castañeda-Ayarza and Ferreira, 2020). This practice aid organisational
managers to assess competition which is presented by varied establishments in relation to
specified industry. By ascertaining market competitiveness, organisational managers can frame
strategies accordingly and willing to secure a competitive advantage. Managers of Morrisons use
this model for identifying the location of power holding company or organisations who are
1

raising competition for them. It also aid them in identifying and understanding the corporate risk
in an effective manner. Varied elements of Porter five forces model in accordance with
Morrisons are mentioned below:
Competitive rivalry- This force is concerned with number of competitors and level of
competition organisations can present in respect to specified industry (Barca, 2017). It is
considered as major determining force for measuring competitiveness in market. It is imperative
for business organisations to assess their competitors especially who are offering similar product
range for same type of customers. In regards with operating business activities in an effective
manner, organisational managers needs to consider their practices in relation to marketing,
advertising as well as diversity of products of competitors. In relation to Morrisons, managers are
required to assess their competitive rivalry in respect to big brands who presents competition for
them such as Tesco, Sainsbury's and Walmart. Managers of Morrisons working on their strategy
that is to invest their resources for improvising their product specification and securing a
competitive advantage.
Threat of new entrants- This force is concerned with obstructions which are acting as a
barrier of new competitors in a new market (Gans and Ryall, 2017). These new competitors can
also effect the operations of established organisations by engaging their customers towards them.
These barriers to entry in respect with a new industry essentially encompasses of large
investment at initial level, government regulations as well as difficulty in regards with
distribution channels. In relevance with grocery industry, this threat is high as initial investment
is not so large for new companies. There are few legislations which are needed to be followed in
entering into this industry. However, in relevance with Morrisons, they are established
corporation and should strategise their policies which will help them to present tough
competition to new entrants as well as existing ones.
Bargaining power of suppliers- This force is concerned with number of suppliers in
respect to market inputs present in industry. Bargaining power of suppliers can dominate the
market as well as can create a problematic relationships in regards with dependency (Henry,
2021). It is imperative for business organisations to assess the influence and power of suppliers
in an adequate manner while negotiating with them in relation to prices. In relevance with UK
grocery industry, bargaining power of suppliers is low as there are large number of providers in
market. In context to Morrisons, they look for new suppliers with distinctive as well as
2

innovative products for catering the dynamic needs of their customers. They also supports varied
British brands in reaching to customer through their supermarkets.
Bargaining power of customers- This element is essentially concerned with power as
well as influence of customers over the products or services of an organisation working in a
specified industry (Hill, 2017). This power can be raise to higher terms if differential
organisations are manufacturing standardised products or services which are almost identical in
their approach. In relevance with UK grocery industry, bargaining power of customers is high
due to low switching cost and identical products in market. In context to Morrisons, managers
have introduced their enhanced innovative services through the help of machine learning and
artificial intelligence in an effective manner. It is imperative for managers to Morrisons to offer
innovative products and services to their customers which will help them to engage them in a
strategic manner.
Threat of substitute goods- This force is concerned with fear of alike products which are
offered by different organisations in order to cater the needs of same market segment (Hitt and
Duane Ireland, 2017). In context to UK grocery industry, threat of substitute commodities is
high as there are numerous establishments which are providing similar products and services to
customers. It is imperative for managers of Morrisons to develop their products in an unique and
innovative ways in order to curb the threat of substitute goods taking their place. It is desirable
for managers of Morrisons to ascertain the organisations which produce and sell similar products
in a strategic manner.
From the above analysis, it has been assessed that Porter five forces model is considered
as significant for assessing competitiveness as well as attractiveness of industry in an effective
manner. Top management of Morrisons use this theoretical model for analysing varied
formulated strategies in regards with external forces in an effective manner. This strategies such
as securing a competitive edge, supporting suppliers and developing innovative products in
regards with catering diverse as well as dynamic needs of their customers. These strategies are
considered as essential for them to systematically adopt practices in relation to strategic
management (Hitt, Ireland and Hoskisson, 2019) .
Case study approach
Business environment is dynamic and is changing on a fast instance which create varied
issues for establishments and curbing them to gain success. Organisational performance is
3

critically based on the efficacy of strategies which are formulated by decision-makers (Keding,
2021). In relevance with Morrisons, it is a leading organisation in grocery industry which uses
varied innovative techniques and platforms which help them to gain competitive advantage over
their competitors. Varied strategies which are formulated by Morrisons are majorly consisted of
gaining competitive advantage, serve their customers in a better way, integrate with local
suppliers, simplify the procedures, using digital technology and many more. Managers of
Morrisons believe in asking for feedbacks and take critical action in regards with making
improvisations in their products or services. They have also provided easy online as well as
home delivery options for their customers in an effective manner. They also make strategies for
supporting the communities and societies in an effective manner through provide support to food
banks. Approach of managers of Morrisons is cost conscious as they always try to discover the
ways whereby they act as responsive to customers.
They have also introduced more flexible remote working for their employees in order to
improvise their productivity and performance. They also use digital technology in order to
provide easy and accessible services to their customers in an effective manner. They are making
customer experience excellent through introduction of loyalty application known as More (About
Us Strategy. 2021). Employees are also provided with headsets in order to enable improved
communication which will reduce the chances in relation to repeated efforts.
Their strategies also encompasses of maintaining a hygiene culture through making
collaborations with touch point cleaning, sanitiser dispenser as well as more number of workers
who are considered as responsible for maintenance of hygiene. They believe in pursuing
opportunities in regards with maintaining their innovative practices and modifications in their
processes as and when necessary (Lynch, 2018).
These strategies needs to be formulated in such a way that it help managers of Morrisons
in securing a competitive edge. These strategies have assist them in indulging the practices to
provide more convenient experiences to their customers through using digital platforms.
However, in order to execute these strategies in relevance with induce collaborative
practices with suppliers in an effective manner. Managers of Morrisons are facing issues due to
shortage of lorry drivers at UK which has pushed up the prices this year in market (Morrisons
warns driver shortage will raise prices. 2021). This practice has essentially create obstructions in
the supply chain management of Morrisons. Shortage of lorry workers is due to Brexit agreement
4

as well as global pandemic, changes in tax rates has also make workings of lorry workers more
expensive. Morrisons have ben addressing gaps in their shelves due to this problematic situation.
Because of this situation, inflation prices are rising in grocery retail industry.
Managers of Morrisons have developed their strategies to support local integration as
well as maintaining strong relations with their suppliers. However the issue of shortage of lorry
drivers and rise in their prices posed as an issue as well as disturb their supply chain
management.
A recovery plan
A recovery plan is a descriptive document which is designed in a structured approach
which describes how an establishment can quickly resume their workings after an unplanned
circumstance (Makadok, Burton and Barney, 2018). Main purpose of this recovery plan is to
explain in a comprehensive manner regarding the consistent actions that are required to be taken
after a mishappening in business operations in an effective manner. In a nutshell, it help to
respond effectively after a crisis a faced by businesses. It consisted of information in relation to
planning and executing strategies in regards with business operations. In context to Morrisons,
they are facing issue of shortage of lorry workers and sudden hike in their prices, for solving it,
managers have designed a recovery plan.
At first, managers of Morrisons have to identify their issue and its severity on their
business operations. Issue of disruption in regards with supply chain management is faced by
Morrisons which needs to be solved in a strategic manner.
Secondly, they have to analyse the issue with pertaining market environment in an objective
manner. It is imperative for them to evaluate this issue which help them in tracking it for solving
it in a strategic manner.
After evaluating it, managers of Morrisons have to implement varied alternative solution
which can help them to curb their issue. They can collaborate with other suppliers from
differential country. It incurs huge cost to them however, through this they can fill the gaps in
their shelves and provide products to customers. This practice can help them to gain competitive
advantage as their competitors are also facing the same issues.
It is imperative for managers of Morrisons to monitor their success or failure in a
strategic manner. At initial stage, this solution can cost high for them but later on, this will help
them to engage and retain their customers in an effective manner. Managers of Morrisons ought
5

to monitor their recovery plan in accordance with the issue and solution in an effective manner.
They should review their recovery plan on a continuous basis which help them to solve varied
issues in an effective manner.
Risk management strategy
Risk management can be understood as a procedure which is used to identify, evaluate
and prioritize the risks through coordinated as well as economical resources which is needed to
minimize the probable chances of unforeseen events in a strategic manner (Meyer, Neck and
Meeks, 2017). Main aim of risk management practices is to ascertain the probable issues before
their occurrence as well as try to grab opportunities as and when they occur.
In order to assess and manage their risks in an effective manner, managers of Morrisons
review continuously their challenges gather updated information in a strategic manner. They are
member of Supplier Ethical Data Exchange (SEDEX) as well as use their platforms for assessing
their risk in an effective manner (Morrisons. 2021). Their risks management strategy is
formulated through collaborating with their external partners in managing the issue of
maintaining their supply chain in a strategic manner.
For managing their risks in a rational manner, managers of Morrisons maintains a
separate list of countries as well as regions whereby they can not source raw ingredients and
finished goods is restricted. They also have prepared the list of those countries whereby worker
rights are strict and robust. They have to assess varied information in regards with their decision-
making services from external sources. Their collected data sets aid them in making compliance
with their supply chains which help them to concentrate on their collaborative action (Newburry,
Deephouse and Gardberg, 2019). They can hire an independent assessment team to assess as well
as prioritise their commodities as well as geographies in relation to highest rank.
For meeting the risk of low raw ingredients in respect to beef and meat, they are
providing their sustainable plan which help them to recognize and support the farmers. This
scheme will provide them livestock premiums, green discounts, free environmental advice as
well as subsidised audits through concentrating on herd health as well as protecting their family
farming. Managers of Morrisons are planning to provide varied services to farmers under this
scheme in a strategic manner such as free advice in relation to carbon emission, tree planting as
well as landscape assessment. A range of discounts in regards with their products or services
help them to improvise sustainability of their farms in an effective manner (Phillips and
6

Moutinho, 2018). They will review and monitor their programme in accordance with any
coming risk on business operations of Morrisons. Their initial assessment of risks have enabled
them to develop a map which highlights varied inherent issues that are related to commodities as
well as geographies.
When their issues are occurred in accordance with their supply chain management,
managers of Morrisons have shown support to them through a meaningful improvement plan. In
order to manage the problems faced by suppliers, managers of Morrisons have developed a
hotline known as Tell Us which enables distributors to raise their concerns and talk directly to
their internal audit team (Morrisons. 2021). Their losses as well as other concerns are solved
through technical and legal team depending on their case.
Apart from their own workings and profits, they also work for providing a safe workplace
to the supplier and supports them in regards with human rights in a strategic manner. They
essentially collaborated with non-profit organisations and human rights sector for developing the
strategies as well as protecting their suppliers (Valeri, 2021). This practice led them to showcase
their ethical workings which help them to gain competitive advantage in a strategic manner.
CONCLUSION
From the above mentioned information, it has been concluded that strategic management
is considered as an ongoing procedure which essentially encompasses of varied methods which
are needed for accomplishing organisational objectives. Porter five forces is a tool which is used
by establishments in assessing competition in market in a strategic manner. By analysing varied
elements in regards with Porter five forces, organisational managers can formulate strategies in
relation to strategic management. Strategic management is considered as beneficial for business
organisations in adopting a proactive approach rather than reactive. It aid them in analysing the
competitor's analysis in order to make strategies which help them to gain a competitive edge.
Risk management strategies are considered as important for business organisations as it help
them to run their business functions on a smooth basis. Recovery plan is prepared by
organisational managers in accordance with any circumstance which is considered as
mishappening for operations.
7

RECOMMENDATIONS
It has been recommended to managers of Morrisons to formulate their strategies in such a
way which aid them in gaining competitive advantage in an effective manner. It is imperative for
managers of Morrisons to enhance their supplier programs in a directed manner which leads
them achieve their pre-determined objectives. It has been advisable to managers of Morrisons to
review their recovery plan on a constant manner. It is also advisable to them to analyse their risk
management strategy on a timely basis which helps them to gain competitive advantage in
strategic manner. They ought to plan for alternative solution in regards with the issue of shortage
of lorry workers and rise in their prices. In order to fill the gaps in their shelves and maintain
their supply chain management in an effective manner. It has been recommended to managers of
Morrisons to evaluate their varied plans and strategies in relation to approaching risks in a
strategic management.
8

REFERENCES
Books and Journals:
Akyuz, G. A. and Gursoy, G., 2020. Strategic management perspectives on supply
chain. Management Review Quarterly. 70(2). pp.213-241.
Alieinykov, I. and Et. Al., 2019. Development of a method of fuzzy evaluation of information
and analytical support of strategic management. Eastern-European Journal of Enterprise
Technologies. 6(2). pp.16-27.
Barbosa, M., Castañeda-Ayarza, J.A. and Ferreira, D. H. L., 2020. Sustainable strategic
management (GES): Sustainability in small business. Journal of Cleaner
Production. 258. p.120880.
Barca, M., 2017. Economic foundations of strategic management. Routledge.
Gans, J. and Ryall, M. D., 2017. Value capture theory: A strategic management review. Strategic
Management Journal. 38(1). pp.17-41.
Henry, A., 2021. Understanding strategic management. Oxford University Press.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Hitt, M. A., Ireland, R. D. and Hoskisson, R. E., 2019. Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Keding, C., 2021. Understanding the interplay of artificial intelligence and strategic
management: four decades of research in review. Management Review Quarterly, 71(1),
pp.91-134.
Lynch, R., 2018. Strategic management. Pearson UK.
Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory contributions
in strategic management. Strategic Management Journal. 39(6). pp.1530-1545.
Meyer, G. D., Neck, H. M. and Meeks, M. D., 2017. The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Newburry, W., Deephouse, D. L. and Gardberg, N. A., 2019. Global aspects of reputation and
strategic management. In Global aspects of reputation and strategic management.
Emerald Publishing Limited.
Phillips, P. and Moutinho, L., 2018. Contemporary issues in strategic management. Routledge.
Valeri, M., 2021. Organizational Studies: Implications for the Strategic Management. Springer
Nature.
Online:
About Us Strategy. 2021. [Online] Available through:
<https://www.morrisons-corporate.com/about-us/strategy/>
Morrisons warns driver shortage will raise prices. 2021. [Online] Available through:
<https://www.bbc.com/news/business-58498427>
Morrisons. 2021. [Online] Available through: <https://www.morrisons-corporate.com/morrisons-
sustainability/ethical-trading/risk-assessment/>
9