Analyzing Macro and Internal Environment for Morrisons

This report analyzes the macro and internal environment of Morrisons, a leading supermarket chain in the UK. It explores the impact of political, economic, social, technological, legal, and environmental factors on the company. The report applies frameworks like PESTLE analysis, Ansoff Matrix, Resource-based Review, McKinsey 7 S Framework, and VRIO Model to evaluate the competitive forces and capabilities of Morrisons. It provides insights into strategic planning and decision-making for the company.

Business Strategy
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Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Apply appropriate frameworks to analyse the macro environment for a given organisation.
................................................................................................................................................1
TASK 2............................................................................................................................................5
P2 Using appropriate frameworks analyse the internal environment and capabilities of a given
organisation............................................................................................................................5
TASK 3..........................................................................................................................................10
P3 Apply Porter's five force model and evaluate the competitive forces of a given market
sector of an organisation.......................................................................................................10
TASK 4..........................................................................................................................................12
P4 Apply a range of theories, concepts, model, interpret & devise strategic planning for a
given company......................................................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
Business strategy refers to the set of competitive moves and actions that the business used in
order to influence their customer by formulating and implementing the major poles and
initiatives taken by the organisation on the behalf of stakeholders. As wants to grow their
business in order to attain the higher profitability and productivity ensuring the effective
strategies and action plans (Zucchella and Previtali, 2019). Morrisons is the chosen organisation
for this report, it is the fourth largest chain of supermarket in the United Kingdom and it's
headquarter is in Bradford, West Yorkshire, England. The company is founded in 1899 by
William Morrison. This report will cover the framework to analyse the external environment and
also understand the internal environment. Moreover, it will apply the Porter's five force model to
evaluate the competitive forces in the given market sector and also will apply the theories and
concepts and model for strategic planning.
TASK 1
P1 Apply appropriate frameworks to analyse the macro environment for a given organisation.
External environment consist of various factors like political, economical, social,
technological, legal and environmental in order to take the approiate decision with the
consideration of making the best use of their available resources. Macro environment have the
direct impact on the working of the company. With the use of PESTLE Analysis, Morrisons also
understand the external business environment that is discussed below:
PESTLE Analysis
It is the framework of measuring the impact of macro factors on the organisational
performance there are certain factor that is involved in this analysis that is explained as follows:
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Figure 1, Scanning the Environment: PESTEL Analysis,2016
 Political factor: These are the factors which includes the political stability, foreign trade
policy, trade regulation, trade restrictions. It is important for the morrisons to comply
with the rules and regulation of the government so that they can easily upgrade their
business in the international market.
 Economical factor: These these are the factors which includes the interest rate, inflation,
exchange rate, unemployment rate and many more factor that have the direct impact on
the performance of the company. As every organisation work towards the economic
growth and development so that they can establish a good brand image in the market.
Morrisons is the leading company in the rattling industry which is operating their
business in the international market so company can contribute in the growth of the
economy by attaining the higher profitability (Tiwari and et. al., 2021).
 Social factor: These are the factors which is concerned with the socio-culture factors that
are education level, purchasing power, career, buying choices of the customer and may
more factors which is enhancing the marketing and development of the company.
Morrison’s is focusing on giving the education and heath of consumers in United
Kingdom.
 Technological factor: These are the factors which includes the innovation and the
advancement in their products and services so that they can meet the competitive
advantage in the market. Morrison’s is investing in technology that help them in reducing
the wasted effort and cost making the business to get effectiveness in their business.
 Legal factor: These are the factors which includes all the laws and policies that is
imposed by the government of the United Kingdom. Morrison’s is complying with the
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food safety and legal standards like FSA targets and they have undertaken the 1000
ethical trade audits in 2016 to ensure integrity (Suriyanti and et. al., 2020).
 Environmental factor: these are the factors which are concerned with the safety and
protecting the natural resources and the environment so that sustainable business can be
operated. Morrisons have the emissions to reduce carbon 30% by 2025.
Ansoff Matrix
It is considered as a strategic planning technique that is useful to give a systematic
framework which help the senior manager employee and executive to determine their future
strategies. It is also known as the product/market expansion grid technique that is is used to
measure the the business strategy for the success. Ansoff matrix is developed by the famous
mathematician and manager J.Igor Ansoff. There are four business strategies that are involved
by the morrisons in order to understand this model are explained as follows:
Figure 2,CIMA E2: ANSOFF’S MATRIX,2016
 Market Penetration: It is the strategy which focuses on increasing the sale of the
existing product in the existing market. It include the type of business whom aims to
increase their market share can follow the market penetration strategy. Morisons uses this
strategy when they want to improve their market share by complying with the effective
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promotional activities and distribution channel so that they can attract the large pool of
customers.
 Product Development: it is the strategy which focuses on developing a new product by
and to in the effect of market research so that they can understand the latest trends in the
market by which they can meet the changing demand of the potential
customers (Ransbotham and et. al., 2017). Morrisons Ken do the product development as
to implement research and development expansion which leads to increase their product
range.
 Market Development: It is the strategy which focuses on entering in the new market
with the existing product this is the successful market strategy as it help in providing the
innovative technique and leverage to enter in the new market so this can benefit the
Morrison to expand their business in the new locations.
 Diversification: This is the strategy that concentrate on entering the new market with the
new product so this is the risk is strategy because the company needs to do the the market
research and product testing so that they can launch their new product in a target market.
Stakeholder Analysis
Figure 3,Stakeholder Analysis,2020
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 High power, high interested people: These are the stakeholders who are actively take
part in the operational activities that having high power and high interest which includes
the type of stakeholders are CEO, top level management and board of directors within the
organisation.
 High power, less interested people: these are the stakeholders who are having higher
power and rule the whole organisation but they are having low interest in the operational
activities (Park, Park and Hirachi, 2018). These are the satisfied stakeholders, but they do
not take interest as they become bored early. This includes investor, partners, and
suppliers.
 Low power, highly interested people: these are the stakeholders who are having low
power and high interest and give their best effort in order to get the profitability within
the organisation. The stakeholders are very supportive and helpful as during the whole
organisation which includes employee and leaders.
 Low power, less interested people: These are the stakeholders who is having low car
and less interest in the business that is not much actively take part in the functional
activities. Workers and lower level of employees are are considered in this type of
stakeholders.
TASK 2
P2 Using appropriate frameworks analyse the internal environment and capabilities of a given
organisation.
In order to understand the internal environment and its capability, it is important for every
organisation to use the appropriate Framework that can help in getting the actual situation in the
internal business environment (Papaioannou and et. al., 2018). Morrisons required to adopt
certain Framework that can help them to evaluate the internal environment and their capabilities
for the future development of an organisation. There are some framework and models that are
being used by the Morrisons are explained as follows:
Resource based Review.
It is the most effective strategy that help in formulating the various strategy so that the
business can understand the competitiveness in the market. Resource based view theory is
developed by B Wernerfelt during 1980s
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Importance of resource-based view.
There are various factors which evaluate the importance of resource-based view strategy
as this is helpful in gaining the substrate level and competitive advantage in the large market.
This approach is also considered that resource allocation and their analysis that is important for
the cross functional and their use of resources. Morrisons is using this model as it helps in
creating the visibility for the effective and approach resource allocation so that they can meet the
competitive advantage by which Morrisons can make the best use of their resources.
Figure 4, Resource-based Review, 2013
Resource based view analysis.
This is strategy is helpful for every organisation as it spread the awareness about why the
organisation need the competitive advantage in which the organisation adopted the specific
analytical method for evaluating the strength and weakness of the company by which they can
also evaluate the performance of the employees. For more understanding, there are various type
of assets resource based view which is explained as follows:
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 Tangible Assets: These are the assets which includes subsequent resources of the
organisation which includes machinery, goods, capital, infrastructure, and other type of
equipment that are han easily acquired by the competitor in an ideal asset that gives the
less competition advantage for a long period of time (Ostaev and et. al., 2019).
 Intangible assets: These are the resources which do not have the physical appearance as
they are intelligible by nature. The type of assets our brand image, trademark, intellectual
property and other intangible assets which affects the competitors.
McKinsey 7 S Framework
Figure 5, Mckinsey 7s Framework Style Skills Systems Structure,2021
 Strategy: It is the first stage of this model demonstrate the organisational plan that
mainly focuses on maintaining and gaining the more competitive advantage as compared
to their rivals. Morrisons must focuses on effective strategy that can help them to obtain
more possible outcome which contribute in organisational success and the search
strategies comes under the hard element of this model.
 Structure: With the effective use of this strategy it identifies that how company can
organised and their various departments and function so that they can run the business in
an effective manner (Namada, 2020). Morisons must follow the appropriate
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organisational structure by which every employee a delegated to their senior in order to
have better communication and coordination within the organisation.
 System: it is important for every organisation to follow the specific system that can help
them to regulate is department in an efficient manner. Morrisons use the strategic plans
and procedures so that employee can have the the delete asked to do and complete them
within a given period.
 Shared value: It is the aspects which represent the core values of an organisation which
includes business ethics at workplace and corporate culture within the organisation.
 Style: It is the strategy which define the leadership style that is adopted by an
organisation. Morrison Singh using a participative leadership style in which they can take
the valuable feedback and suggestions from their employees in order to get innovation
within the organisation.
 Staff: In this aspect the organisation focuses on their employees so that manager and
leader can effectively improve their capabilities and productivity by giving the required
training sessions so that they can contribute in getting the better outcome within the
organisation.
 Skills: With the help of the strategy the organisation identify and evaluate the skills and
capability of the employees so that they can perform the specific task in an appropriate
manner (Liu and et. al., 2019). Morrisons required to follow the specific technique by
which take and enhance the skills and competencies of their employees to comply with
the current situation in the large market.
Mckinsey 7-S framework is the strategic approach that is help in improving the
organisational structure and procedures and also considered the activities and functions within
the organisation so that the leader and the manager can appropriately delegate the authorities and
responsibilities to their subordinates. The main consideration of this model its to improve the
performance level of the company with the well being as well. Morisons uses model as it is the
strategic organisational tool that helps in identifying the impact of internal factors on the
productivity of the company.
VRIO Model
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This is the model which function like analytical tool that help and identifying the specific
detail that is used in the decision-making process of an organisation. It also help in getting the
substance level competitive advantage so that company can earn more revenue and reduce the
chances of competition. Mercedes using this model to develop the various competitive strategy
that is based on the resources and the strength that help them in gaining the competitive
advantage. This model is explains the fourth step which can help in analysing the whole market
situation by which the Morrisons can get the competitive advantage.
Figure 6,Discover Own Competitive Advantage using VRIO Analysis, 2020
 Valuable: it is the element in which value of the company can be evaluated in an
generalized. Morrisons evaluate the various opportunities that are available in the internal
and external business environment and also focus is on reducing the various threats that
are associated in the external environment. Such competencies help the business for for
the development and also make them understand about the market situation. As for this,
Morrisons local product are considered as a valuable resources as they are highly
differentiated. The valuable resources of this model to determine the necessary portion of
the employees need to be highly potential so that they can increase their productivity and
efficiency in comparison to their rivals.
 Rare: these are the resources which are acquired by few organisation as they are
considered as the rare items of the company. Both rare and valuable resources give the
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temporary competitive advantage in the business enterprises (Lee and Jung, 2018). It is
analysed that such organisation which consider the same resources and using the same
capabilities will leads to to fail in meeting the competitive advantage. So companies can
utilise their resources and implement the strategies in order to get the effectiveness in
their organisation.
 Inimitable: It is the elements which require the resources that ensure the difficulty in
imitate and this can help in providing the competitive advantage. Resources hard element
that are difficult to images when the companies using the expensive resources, so it is
difficult for other organisation acquire them. Hence, company must ensure the resources
which gives the competitive advantage that is valuable rare and hard to imitate.
 Organized: It is considered as the business firm that is well organised which help in
gaining the value in order to support their employees, culture, process and structure of the
organisation (Kabir, 2019). Hard element which is difficult to imitate and can retain the
value for a longer period of time so company can get the long-term competitive
advantage in the large market.
TASK 3
P3 Apply Porter's five force model and evaluate the competitive forces of a given market sector
of an organisation.
It is the technical framework understanding and analysing the current situation in the
marketplace in terms of competition. This model is considered as holistic strategy that help in
analysing the sustainable competitive advantage in the large market. Morrisons new release
model in order to understand the competitive advantage in the industry so that they can examine
their future action plan and strategy in order to get the higher profitability and productivity
within the organisation. Various aspects of this model is explained as follows:
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Figure 7,DRIVE BUSINESS STRATEGY & COMPETITIVENESS WITH PORTER’S FIVE
FORCES,2017
 Threat of new entry: When a new form in entering in the retail industry the forces is
new business bring the innovation and put something different or unique by which attract
the large group of customers (Games and et. al., 2020). Morrisons focusing on adopting
some strategy by which they can read the competitive advantage by getting innovation in
their production services and providing the product on affordable prices and having a
proper coordination and cooperation among the employees. They also emphasize on
spending the money on research and development process so that they can understand the
market requirement.
 Bargaining power of suppliers: The bargaining power of the supplier is low as there are
large number of suppliers in the retail industry. Morrisons also operate their business by
having a large chain of supplier in order to take the raw material and other required
resources for their further production. Strong suppliers use their negotiation to get the
more profitability but the company is having more option to switch to the another supply
who is giving the raw material on affordable prices.
 Bargaining power of buyers: There is a hypothesis of bargaining power as there is a
huge competition in the retail industry by which the buyer can easily switch to another
brand according to their taste and preference (Hadaya and Gagnon, 2017). Morrisons
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setting their price pocket friendly and offer various discounted rate by which they can
attract the large group of customers and ensure they do not switch the brand.
 Threat of existing rivals: There is a high force of competitive firms for the Morrisons.
As there are lot of competitors in the large market which can affect the profitability and
productivity of the company. Every organsiation is using the innovative and advance
technique in order to get the Effectiveness in the business so that they van meet the
competitive advantage in the large market, so it is important for the firm to use the
innovative technique.
 Threat of substitutes: There is a moderate force of substitute for Morrisons. Is there the
leading company with the strong brand image but some are introduction of the new
product with the same expectation and prices can take their learn customer away from
their brand and company can suffer in laws and their profitability so it is very important
for them to make the effective price strategy and quality of the products.
It is analysed from the above discussion that there are various driving forces that is a huge
impact on the functionality of business. These forces of various factor is having high as
Company is having huge threat of entry of new firm, Bargaining power of the buyers, bargaining
power of the suppliers so company must understand the various operational activities in an
appropriate manner so that they meet the competitive advantage in the large market.
TASK 4
P4 Apply a range of theories, concepts, model, interpret & devise strategic planning for a given
company.
Every organisation must apply diversified range of concepts and theories so that they can
support the business drivers and their strategy in order to make the effective planning for the the
growth of the business. Morrisons is using the specific model and theories that can help them to
analysed and interpret the strategic planning and the theories which are being adopted by the
persons is explained as follows:
Generic Strategies
This is the model which help in maintaining the product and services within the
organisation so that they can perform in an appropriate manner in order to attain the higher
profitability. This model is developed in 1985 by Michael Potter and this mainly includes the
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four specific strategies that help to follow the appropriate strategy according to their business
environment (Fernandes, 2017). This is the scientific model which is helpful for the company as
it happened identifying the requirement of the organisation and gain the competitive advantage.
This model easily in the performance of their employees so that they can establish a good brand
in the market. Four strategies of generic are explained as follows:
Figure 8,Porter’s Generic Strategy PowerPoint Template, 2017
 Cost Leadership: this is strategy is used to obtain the market share in the specific market
by keeping their price nominal. The main aim of the company is to reduce the price of the
product by eliminating the unnecessary cost and resources that is affecting the operating
cost of the company (Falcão, Ramalho and Nobre, 2020). Morrisons considered the
capital of technology as this is unnecessary driver and focused on the high level of
performance with the best utilisation of their potential employees in order to get better
results.
 Differentiation: the main consideration in such organisation is to offer the unique and
attractive products so that they can get their large number of customers in order to
increase their sale and meet the competitive advantage. It includes the effectiveness of
child development and market testing so that the company can understand the current
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trends in the market and then developed the new product that can meet the changing
demand of the customer. What is the statistical method that involves various features like
durability and analysis of promoting the product in order to gain competitive advantage,
Also emphasising on making their brand recognisable in the market. Unique products
reflect the high quality and the value of the product by which the demand for such
product is higher with the extra feature that can create more value with the product.
Morrisons need to pay more attention on superior products and its quality by analysing
the market condition.
 Cost focus: it is the strategy that is concerned with the effective price in strategy in the
small organisation (Drobyazko and et. al.,2019). It helps in developing the low-cost
advantage but only in small market segment and they generally of the product that can be
easily considered by the organisation. For example, household product and budgeted
food. This would help the small firms to operate their business in an approximate manner.
 Differentiation focus: It is the strategy that is concerned with the differentiation of
product and services with the effective marketing strategy of the company. In this
strategy, the organisation developed using product but only in small market segment a
main concentration of the strategy is to fulfill the needs and wants so that they can offer
the product and services according to the customer preferences.
It is evaluated from the Morrisons needs to use the differentiated strategy which can help
them to offer the attractive and unique product so that they can attract the large group of
customers in order to increase their sale and profitability. Does also help in creating a strong
brand image in the market have taken their day-to-day operation in an effective manner.
Bowman's Strategies
This is the strategy which is developed by two popular economist Cliff Bowman & David
Faulkner. The main consideration of this model is to spread the violence about the establishing
effective market position as compared to their competitors (Centobelli and et. al., 2020). The
strategy which considered the specific market a model that can evaluate in the position in the
market. In this strategy, which help in maintaining the specific position of the organsiation so
that Morrisons can achieve the highly competitive advantage in the large market by which they
can improve their performance level by which the company can establish the good brand image.
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CONCLUSION
It is concluded from the above report that business strategy play an important role in
improving the functionality of business. This report also very well various business strategies
that are helpful for development of business. It is also analyses the external factor Framework
that is impact on the organisation. There is a positive impact of political and technology as the
companies complying with the government rules and policies in the innovative and unique
product by doing effective market research. Moreover, the report also explains the porter's five
force model which help the company to in stablished their product by using the effective
marketing strategy. DRC suggested to use the market penetration so that they can good brand
image in the market by increasing their market share.
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