ACC702 - Strategic Management Accounting Analysis of Morrison’s

This report provides a strategic management accounting analysis of Morrison’s UK, a leading retail player in the UK. It examines the company's strategic framework, particularly in light of a horse meat scandal in 2013 that impacted its reputation. The analysis includes the company's mission, vision, value chain, and Porter's Five Forces. It also delves into the management system, alignment of strategy, and recommendations for investments in R&D and employee training to improve profitability and customer retention. The report utilizes historical information and journals to provide a deep understanding of Morrison’s strategic approach to maintaining its market position and customer trust.

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Strategic Management Accounting Analysis

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Executive Summary
The main aim of the research is to identify the strategic framework and analysis of the
company namely Morrison’s UK. Morrison’s is the leading retail player in the UK that faces
the critical situation in February 2013 regarding Horsemeat freshness. The company’s one of
its store deliver rotten meat to the customer which came into the limelight and it influences
the reputation, customers and market share of the company. The main objective and findings
of the report is to analyze the various strategic frameworks and how a company effectively
integrate the strategies into the management planning which helps to retain its customers and
reputation in the market (Morrison Corporate, 2018). Lastly, it is also find that insightful
recommendations regarding investments in R&D and Employees training will help the
company to generate good profit in the long run.

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Table of Contents
Executive Summary...............................................................................................................................2
Chapter1: Introduction...........................................................................................................................4
Chapter 2: Strategic Analysis.................................................................................................................4
Company’s Mission............................................................................................................................4
Company’s Vision..............................................................................................................................5
Value Chain Analysis..........................................................................................................................6
The Primary Activities........................................................................................................................6
Support Activities..............................................................................................................................8
Porter Five Forces Analysis................................................................................................................9
Chapter 3: Management System.........................................................................................................11
Chapter 4: Alignment of Strategy........................................................................................................13
Chapter 5: Conclusion..........................................................................................................................14
References...........................................................................................................................................15

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Chapter1: Introduction
The aim of the report is to discuss the strategic analysis of the leading retail company namely
Morrison’s UK. Wm Morrison’s is the fourth largest chain of supermarket in UK and
company’s headquarter in Bradford, West Yorkshire, England. The company founded in
1889 with begun its business with egg and butter stall in Rawson Market. Until 2016 the
Morrison’s stores located in North and south of England after the takeover of Safeway.
Currently, the company has 500 stores across England, Wales and Scotland. 2017. The
Company sells the grocery and food products through its own superstores, retailers and
departmental stores (Morrison’s Corporate, 2018).
In February 2013, the company faces a horse meat scandal in its one of its stores that reduces
its market share and company’s goodwill and puts a question mark on the company’s product
freshness. One of its company’s stores delivered the frozen and rotten horse meat to the
customer. The main purpose of the report is to analyze that how a company adopts the
relevant strategies to get a good leading position in the market after this incident. To adopt
various strategies and framework company maintains the trust of the customers by delivering
fresh and quality products into doorstep and these strategies help to increase the profitability
and shareholders’ value in performance management system. The materials and findings for
this report are taken from the historical information and journals of the companies that
provide a deep understanding to the reader and researcher. The main limitations were found
in this report is related to the data and relevant sources are not easily available and there is a
very less availability of time to include all the information in the report.
Chapter 2: Strategic Analysis
Company’s Mission
The company is a leader in supermarkets and retail sector in grocery and food industry in the
UK. The mission of the company is to deliver “Very Best for Less” to the customers. It
indicates that the company’s mission is to deliver the best and superior quality products at
low cost. The company will provide the best quality, services, convenience in its products
through innovative marketing and sales approach with the help of equipment, technologies,
components and materials and contribute to the brand new industries and products for a better
world (FFU, 2017).

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Company’s Vision
The vision of the Morrison is to become the “food specialist for everyone”. The company’s
vision is to deliver the great food that has great value in their daily lives. To achieve this, the
company will improve the process of distribution, packaging and storing so that they can
provide valuable products to their customers (Iijmsbr, 2018).
Morrison’s goal is to focus on the three major areas such as Fresh, Value and Service. Fresh
indicates the company’s vertical supply chain management that sells food which is freshly
prepared in store.
Porter Generic Strategy
(Source: Research Gate, 2017)
The company adopted the differentiation and cost leadership strategy to perform well in the
strong competitive retail market.
Morrison’s built its own manufacturing factories to save the manufacturing cost. The
company directly supplies the product to its own manufacturing units or factories. The
company has 15 distributions centers or points and use its own transportation or logistics by
24 hours to deliver the fastest and fresh food to its stores. The company employed 3200
employees that provide the 35 million of fresh packs of fruits and vegetables every week for
sale in all the stores of the company. The company lower down its costs in production,
overheads, design system that lowers down per unit of cost to produce the product which
directly benefits to its customers (The Guardian, 2017). The company work on low-profit
margins and high volume of sales that increases the revenue and turnover of the company.
Additionally, the company lowers its costs through extra investments in facilities, equipment
and skills of employees. The company positioned itself that “I am your new cheaper
Morrison’s” at 1200 products and items in the stores across the stores and online. This

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campaign started with the name of DLKW Lowe that aims to capture the maximum market
share in the country. The main strategic goals of the company are to lower down the cost and
deliver quality products to the customers.
Value Chain Analysis
The value chain analysis consists of different activities
The Primary Activities
The major activities of Morrison’s value chain analysis include inbound logistics, operations,
outbound logistics, marketing and sales services
 Inbound Logistics
The company’s inbound logistics is strong due to its own manufacturing systems and in-
house stores that reduce the supply chain management lead time reduced and it enhances the
freshness of the products in-store and reduces the waste and cost of food. The company also
focus on the First in First out (FIFO) methods and Last in Last out Method (LIFO) to
improves the inventory management and cost and also reduces the human errors in the
system. The company owns the modern fleet and transport methods to ensure fast and safe
delivery of materials round the clock. There is also a good relationship with its suppliers
throughout the country that ensures the timely delivery of materials at any cost and any time.
Economies of scale due to huge operations of the company around 525 stores in the country
and it are the major element of value creation for Morrison’s (BBC, 2018).
Operations
Morrison’s operations are categorized into different segments
1) Retail Stores: this is the major business of the Morrison’s UK. The company has more
than 80 million customers made through different Morrison’s shops in various
strategic locations of the country. The scope of Morrison’s retail operations is wide
and extensive. The company sell and operates its stores through the following
channels (Hitt, Ireland & Hoskisson, 2012).
a) Supermarkets: In the supermarket chain, the company sells its grocery and food
products at a larger extent. The availability and timings of the stores are flexible
and varieties of the items are more in supermarkets and it presents the main areas
of the city.

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b) Grocery Shops: In these shops, the company sells the limited number of
groceries and food items according to the design, size and demand of the stores. It
is located in the main residential areas and offices so that the customers can
purchase its daily needs products easily. It is operated through a franchise model
(Vogel & Güttel, 2013).
 Outbound Logistics
The outbound logistics of the company is based upon the cost-effectiveness and flexibility.
The company offers several home delivery options to the customers through its online
purchases from its company’s website. The company charges the GBP 1 subject to
availability of slots. The company runs the Delivery Saver plan that offers unlimited free
grocery delivery for one month and free next day “click and collect plan”. These offers are
applicable for the customers who purchase minimum of GBP 40 and GBP 4 will charge on all
grocer orders under GBP 40 (Hill, Jones & Schilling, 2014).
(Source: Hill, 2017)
 Marketing and Sales
“Delivers fresh and best at little prices” is the main marketing communication message of the
company. The main marketing and sales strategy of the company to provide fresh and quality
products to its customers that create value for them. Currently, the aim of the company is to
restore the stakeholders trust towards the brand its brand image. The company improves its
brand image through mouth publicity and personal selling concept as the customers improved
its brand image by experiencing the quality products at low cost. The company also used the

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TV commercials and nonelectronic sources like magazines, newspapers and pamphlets.
Morrison's also sponsored the various events and activities at peak seasons that increase the
visibility of the brand due to more audience participated in the events at peak seasons (Eden
& Ackermann, 2013).
 Services
It is an important and last part of the activity that increases the value of the product and
ensures the successful distribution, feedback and customer response. Once the products are
purchased by the customers the feedback and services regarding the product are an important
aspect of the company to enhance its value. The company adopted the low-cost strategy and
differentiation strategy by launch its Fresh Food Academy and Fresh Value products (Hitt &
Duane Ireland, 2017).
Support Activities
Morrison Support activities refer to the company’s procurement, human resource
management, technology and infrastructure
 Procurement
Procurement is related to the purchase of products and materials from its suppliers and
reduces the cost of distribution and logistics. The company has a good relationship with its
suppliers and they always committed to deliver the quality service to the company. Moreover,
the company uses the electronic point of system and SAP ERP to make the operations
efficient and smooth.
 Human Resource Management
In the retail market, the competition is high and the employee turnover is also high due to the
sake of good incentives, facilities and promotions offered by the other retail players in the
market. The company employed the skilled and experienced executives’ at every level of
management so that they can lead and handle the team effectively at al functional levels of
management. The company launched the training and development program namely Fresh
Food Academy for employees to enhance their skills (Ginter, Duncan & Swayne, 2018).
Moreover, company introduces the employee forum policies where they can raise their issues
and concerns with a particular department. The company also provides competitive pay
structures, benefits and perks to talented employees.

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 Technology
The company used the Electronic Point of Sale (EPOS) system and Drive planning system to
ensure the supply in time and more efficient. The company also used the electronic Payroll
System, HR activities System and websites that provide the overall information about the
products, services and offers that clearly inform the overall management and its customers
(Wheelen, et al., 2017).
 Infrastructure
Morrison’s used the vertical supply chain business model with the help of its experienced and
skilled management. The company’s sound financial structure and good relationship with its
suppliers help to get the primary support activities. The core competencies of the company
are vertical market integration, unique promotions through sponsorship and CSR activities
that enhance the visibility of the company in the market. The company promote its products
through different campaigns like Sun Media Promotions, Collector card Scheme and Let’s
Grow Campaign helps to attract and retain its customers that enhance its revenues and sales
in the industry (Ward, 2012).
Porter Five Forces Analysis
The threat of New Entrants (Weak)
In the retail Industry it very difficult for the new player to enter into the market due to tough
competition, huge resources and set up, strong market research and good capital structure is
required for the company to beat the leading players in the market. Morrison’s is already a
leading player in the UK retail market and it is very difficult to give the completion the brand
retail player. The company already have strong supply chain management, in-house
distribution and manufacturing systems and innovative products and services at low cost
makes the dominant position in the market and threat for new entrant for Morrison’s very low
(Keupp, et al., 2012).
Bargaining Power of Suppliers (Moderate)
The company has a strong relationship with its suppliers and the company’s own distribution
and manufacturing systems increased the bargaining power of suppliers. The company builds
its efficient supply chain with multiple suppliers. The company’s business mostly depends
upon the suppliers so that they can provide the best services and rates to their suppliers to

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ensure continuous services. The company purchases some of the raw materials from the third
party manufacturers at the time of peak seasons and high demands.
(Source: Evans, Stonehouse & Campbell, 2012)
Buyer Bargaining Power (Strong)
Customers remain strong in the retail industry as they have the many alternatives to get the
same products and quality at low prices from its competitors. In this scenario, the company
has the pressure to sell the products at a low cost to the customers to maintain its profitability.
The companies continuously provide the new offers and discounts to its customers and
streamlined the process to retain its customers. In this manner, it increases the bargaining
power of customers and pressure on the company.
The threat of Substitutes (High)
The threat of substitute is high n the market as there are many big players in the market like
Tesco, Sainsbury, ASDA, Lidl, Alda and Netto provides the same products and service at
competitive prices and offers good discounts on bulk purchasing and different verities of
products. It also provides different services to buy customers such as online and offline
channels (Lasserre, 2017). The company retains their customers due to fresh products at low
prices. But still, the pressure to increase its customer base is high on the company.

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Rivalry among existing competitors (High)
The competition in the retail sector is very high and many leading players provide the
exceptional services to their customers at any cost. The companies also promote its products
and services in a different manner to gain the maximum market share. The company needs to
increase its market size and differentiation to compete in this industry and building a
sustainable differentiation so that the company competes better in the long run (Renz, 2016).
Chapter 3: Management System
Financial Goals
Strategic
objectives
Parameters Future Goals Action Plan/Implementation method
Increase its
competitiveness
in the market by
improving its
sales in the
remote areas as
well
Increase sales in
the remote market
to 5%
January 2019 The company review its sales plans and
tie up with local suppliers and small
shopkeepers to sell its quality products
to its customers and deliver value for
them.
To increase the
cost savings
Decrease costs by
3%
February 2019 To improve the in-house distribution
facilities and find local solutions to sell
products that benefit each store’s
community. The company opens the
mini-stores at petrol stations and nearby
traffic areas so that it reaches every
customers mind.
To generate good
revenue
Increase revenues
to 10%
Sep 2019 The company diversify its presence in
the local and remote areas and reduces
the transportation and logistics cost by
stock its materials in stores and sell
fresh quality products at low prices
helps to attain the objectives of the
company.
Customer Centric Goals
Strategic objectives Parameters Future
Goals
Action Plan/Implementation method
To attract more
customers in every
area
To build 30%
new
customers
March
2019
The company will partner with local merchants
and shopkeepers and stock its materials to mini
stores for sale at low prices in remote areas to
build new customers
Increase the
satisfaction level of
To increase
by 80%
January
2019
The company effectively monitors the
feedbacks of the customers like delivery

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customers problems, fresh products are not available at all
stores and stock availability issues for bulk
orders. The company set up the team who only
handles the customers’ feedback in a week and
manages the resources in a company.
Growth Prospectus
Strategic
objectives
Parameters Future Goals Action Plan/Implementation method
Provide training to
all staff on
software and
gadgets
Staff gets 100%
training on all
devices and
gadgets
July 2019 The company aims to provides one-
stop shop and give them more on their
expectations so the company install
the robotics and AI on high-value
stores so that customers can easily
address the queries and provide mobile
charging facilities and gaming zone at
the time of long Queue
Give appropriate
training to front
staff and cash
counter employees
Ensure 100%
training to their
cash counter
employees and
front office staff
January 2019 The company provides training and
certification to the front office
employees regarding good customer
service skills
On the job training
and certifications
for the experienced
employees in a
year
The company
provides on the job
training and
certifications to
40% experienced
employees in a
year to upgrade
their skills
January 2019 The company provides the educational
offers to and executive courses online
at less cost so that maximum
employees can enroll in the training
and increase their knowledge in core
areas.
The company
sends the
executives for
Global retail
annual convention
seminars
Every year
company sponsor
one senior leader
to participate in
annual convention
December 2019 Every year company sends their
executives for Global Retail Annual
Convention to gather the knowledge
and strategies adopted by the leading
retail organizations in the world and
implement important knowledge in the
process of management.
It has been identified from the planning and designing of the company’s goals and objectives,
the company recognize the three important Key performance indicators that need to be
strategically prioritized due to below reasons.
KPIs Reasons
Increase the satisfaction level of
customers by 80%
The customer is the main area of focus of any business so
it is important for the company to satisfy their customers
at maximum level at any cost otherwise the company