Business Strategy Analysis: Morrison Supermarket Chain Report

This report provides a comprehensive analysis of Morrison, a major UK supermarket chain. It begins with an introduction to business strategy and its application to Morrison. The report then delves into the impact of the macro environment on Morrison, utilizing PESTLE analysis to examine political, economic, social, technological, legal, and environmental factors. A stakeholder analysis identifies key groups and their influence on the company. The internal environment is assessed through SWOT analysis and the VRIO framework, evaluating Morrison's strengths, weaknesses, opportunities, and threats, as well as its valuable, rare, inimitable, and organized resources. The report further evaluates the market using Porter's Five Forces model, analyzing the bargaining power of buyers and suppliers, threats of new entrants and substitutes, and the intensity of rivalry. Finally, Ansoff's growth vector matrix is applied to explore potential strategic directions for Morrison, including market penetration and development. The conclusion summarizes the key findings and recommendations for Morrison's strategic development.

BUSINESS-
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Impact and influence of macro environment on organisation and its business strategies......1
TASK 2............................................................................................................................................4
Assessment of internal environment and capabilities............................................................4
TASK 3............................................................................................................................................6
Evaluation of a given market by applying Porter's Five Force Model...................................6
TASK 4............................................................................................................................................9
Applying of theories, concepts, models to understand and interpret strategic directions
available to a company...........................................................................................................9
CONCLUSION..............................................................................................................................11
References......................................................................................................................................12
Books & Journal............................................................................................................................12

INTRODUCTION
Business strategy is set of competitive rules and norms that are adopted by organisations
for attracting customers, strengthening performance, getting competitive advantage and then
achievement of objectives and goals of the company. It basically outlines what should be done
by the company and way in which various task have to be planned and initiated are discussed in
planning of business strategy (Aubry, and et. al., 2012). The following report considered in this
report is Morrison. This is the fourth largest chain of supermarket of UK. The headquarters of
this company are located in Bradfort, England. This organisation was founded in the year 1899
by William Morrison. This report discusses about impact and influence of macro environment on
business and stakeholder analysis. The different models for Morrison discussed in report are
Porters model, VRIO framework, SWOT analysis and PESTLE analysis.
TASK 1
Impact and influence of macro environment on organisation and its business strategies
 Mission:- To provide customers and clients valuable products by best value for money
on weekly shopping.
 Vision:- To become food specialist for all people.
 Objectives:- This company has the objective to attain success in market by providing
good quality of products to people.
 PESTLE analysis: This tool is helpful in providing detailed information about
Morrison’s external factors that affect business. PESTLE analysis is helpful in
understanding different macro factors that impacts business. Below mentioned is the
external analysis of Morrison -
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 Political:- There are various factors that affect business operations of the company.
Political elements of country affects business strategies and operations of the company.
Morrison faced supply chain disruption prevailing in UK (Burgess, and Radnor, 2013).
This company is planning to enter foreign markets and while doing this Morrison has to
deal with lots of complexities.
 Economic:- Companies have the opportunity to invest in emerging economies as this is
helpful in growth of the company (Cacciolatti, and Lee, 2016). Morrison faced problem
of recession and this contributed to decline in sales and profit of the company. Recession
situation had a serious impact on sales and profits of Morrison. In order to overcome
from such situation, Morrison has adopted new strategies. The organisation was not able
to manage prices of products. Many employees lost jobs.
 Social:- Social factors affects business operations and their profits. Each and every
country follows different culture and lifestyle. Morrison ensures that it is selling products
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which are not offending any country’s religion or culture. Morrison analysed
requirements of people and started business home furnishing in the country where they
are having presence.
 Technological:- Morrison emphasises on giving various experiences to customers.
People have high demands from Morrison so they have to adopt new techniques and tools
for achieving organisational objectives and goals. Cognitive intelligence and artificial
intelligence have been adopted by Morrison.
 Legal:- . Morrison is affected by labour laws and other regulations given by different
countries. Morrison performs all business operations by following legal rules and
regulations given by countries.
 Environmental factor:- It is not easy for Morrison to sustain in market for longer time
by harming environment. Morrison ensures that it is not causing any harm to
environment.
Stakeholder Analysis
Stakeholders are those people who are affected by operations of the company. In order to have
good reputation and image in market, it is essential to have loyal stakeholders
(Cserháti, and Szabó, 2014) . The stakeholder analysis of Morrison is mentioned below –
Stakeholder Effect on Morrison
Customers
Customers of Morrison are loyal towards brand
as this company offers quality products to
people since years.
Suppliers
It is important for Morrison to build long term
relationship with suppliers for smooth
functioning of the company.
Governments
Government is an essential stakeholder which
has to be treated effectively by the organisation
(Eason, 2014). Morrison has to adhere different
rules and laws to build good reputation among
customers.
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shareholders
Shareholders are another important stakeholder
that a company can have. In context of
Morrison, shareholders provide investments for
doing different business operations and
functions.
Employees
These are another stakeholder of the
organisation and Morrison thinks that
sharing growth and profit with
employees is beneficial for the
company. Morissons provide bonus,
money and incentives to it’s employees
for motivating them to work hard and
achieve organisational goals and
objectives.
From the above stakeholder analysis, it is concluded that stakeholders are an essential factor for
company and loyal stakeholders are important for better functioning of the company(Hoque,
2013) . Morison is having big supermarket chain and it is essential to keep satisfied and loyal
stakeholders for company's growth.
TASK 2
Assessment of internal environment and capabilities
SWOT analysis of Morrison:
Strength Weakness
 Morrison is a well reputed organisation
and this company is providing quality
products and services to people since
years.
 This company has a vast area of
network of suppliers.
 There are less supermarket of Morrison
as compared to other supermarket
chains.
 They do not have effective strategies
for market their products effectively.
 There is standard portfolio of
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 Morrison has adopted integrated
approach in their supply chain and
manufacturing.
Morison’s products.
 Morrison is facing some controversies
and issues that are associated with
quality of products.
Opportunities Threats
 Morrison has opportunity of expanding
it’s business in foreign markets.
 This organisation can use new trends of
market such as e-commerce, such
promoting and marketing of products.
 Morrison has threat of various entry
barriers faced in entering foreign
markets.
 Morrison has to follow all rules and
regulations while doing business in
foreign markets.
 Morrison has short of diversification
strategies.
VRIO analysis: This framework is adopted by organisations for evaluating weakness and
strength of the company. This analysis is basically on four aspects like value, rarity, inimitable
and organization (Kohtamäki, and et. al., 2012). There are four resources of Morrison such as
human resource, global presence, cost strategy, differentiation strategy.
 Valuable: Companies have valuable resources that are used for attaining organisational
objectives and goals. Global presence of this company provides opportunity for reaching
potential customers and making customers aware about products of Morrison. Cost
strategy is strength of Morrison that is used for occupying distinct position in market.
Morrison uses another strategy i.e. differentiation strategy in which company offers
different features and different customer like kids zone, café, restaurants etc. It enables
Morrison to get differentiation advantage.
 Rare: Global presence is not a rare concept. Differentiation strategy of Morrison is
unique feature of this organisation. Also, Cost strategy is adopted by Morrison for
offering products to customers at affordable prices. Human resource of Morrison is
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strong department that provides effective training and development programs to it’s
employees. This is also a rare characteristic of this organisation.
 Imitable: Global presence and human resource are two strong factors of Morrison.
Differentiation strategy and cost strategy are two different features which other
supermarket organisations cannot copy.
 Organization: All resources have to be organized by the company to ensure smooth
functioning. Human resource, global presence and cost strategy resources which are
present in different organisations. Morrison must focus on differentiation strategy.
This is the characteristic which has helped company in gaining a competitive advantage
in market.
Resource Valuable Rare inimitable organized
Human resource yes yes
Global presence yes
Differentiation
Strategy
yes yes yes yes
Cost strategy yes yes yes
TASK 3
Evaluation of a given market by applying Porter's Five Force Model
Porter’s model is used by organisations for analysing forces present in the business
environment that influences business operations and functions. This is useful model that helps in
assisting companies for making good market analysis.
Bargaining power of buyer: Customers are the biggest asset of the organisation.
Morrison has to attract customers in order to increase sales and profit of the company. Customers
of Morrison require quality products to be offered to them (Lee, and Smith, 2018). The
management of Morrison believes that customers are satisfied when they are provided quality
products. The marketing managers focuses on marketing approach. This is helpful in identifying
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demands and needs of customers. Customers of Morrison posess high bargaining power as there
are many competitors in supermarket industry.
Bargaining power of supplier: There are many suppliers of different products offered by
Morrison. This company follows a low pricing strategy which means that they have to maintain
good relationship with their suppliers. Good relationship with suppliers is very important as it
reduces bargaining power of suppliers. When there is high bargaining power then, Morrison can
cause threat for company for minimising profit and sales. This is helpful in maintaining healthy
relationship with their suppliers as it ensures benefit of organisation as well as supplier.
Threats of new entrant:- Morrison is a well established organisation and it wants to
expand business in foreign markets. As Morrison is dealing with supermarket chain so it has
many competitors in market. So it has to make effective strategies for remaining in market and
earning profits.
Threat of substitute:- Morrison has to ensure that it is not substituted by any other
service. This can be done by using tools and techniques for innovating products and services
(Lee, 2014). Some of competitor of Morrison are IKEA, Wal-mart, etc. that are involved in
supermarket service.
Rivalry within market:- Morrison works for attaining competitive edge in market.
Morrison adopts effective strategies at initial stages of positioning. Morrison has to make strong
strategies for competing with other competitors in market.
Above mentioned were some of the aspects on which porter's five force model that
affects business operations of Morrison.
Ans-off's growth vector matrix:-
It is a strategic management tool which company uses to plan their future development
and growth strategies. Ansoff matrix basically consists of four different strategies which is used
to support in overall functioning of a business. MORRISON has also used this model to analyse
four strategies and then according to that select the most appropriate strategy which can be
adopted by the company. Below four strategies from point of MORRISON are discussed below -
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Market Penetration:- This is a strategy which is used by many companies in this they
focus on using existing products and they try to expand themselves in the existing market where
company is presently operating (Linn, Sanden, and Piekkari, 2018). Existing customer base is
used in this strategy. Quality or low price these are two key features on which company makes
efforts to gain attention of their existing customer base. As popularity of the product increases
because of either price or quality standards being offered there is increase in sale of the products.
In case of MORRISON also, this company is managed to adopt penetration strategy as they are
involving in high quality and at prices which re affordable by its target customers (Milovanovic,
2015). The design which this brand is offering in its products and affordability in terms of price
had made it achieve a distinct position in market.
Market Development: - This strategy of porter deals with selling existing products but
they want to expand into a new market or target new geographical areas. This strategy helps
company in doing global expansion. Entering into completely new markets is not always very
easy as it involves lot of research and investment by the company (Morton, Wilson, and Cooke,
2015). MORRISON has faced lot of difficulties whenever they have tried to expand themselves
to abroad. They have successfully expanded their global customer base by understanding and
identifying their needs and able to successfully cater them.
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Product development: - Another strategy given by porter in this model is product
development where companies are willing to introduce new product but in the existing market.
Main focus of this strategy is on a complete new product development, but the customer base is
existing ion this case. With the passage of time MORRISON has been able to successfully
expand their operations and functions in different parts of world (Pasquinelli, 2014). There has
been a tremendous growth of company this has been possible because of profitable growth being
experienced by this company in recent years.
Diversification: - This is an effective strategy which companies generally use when they
are planning to do expansion of their business to other countries (Rasula, Vuksic, and
Stemberger, 2012). This strategy is used when a new market is targeted by company and at same
time they are ready with a new product idea. Diversification is also a very popular strategy which
can be used by companies when they are planning to expand, in context of MORRISON
company is involved into using this strategy whenever they are willing to explore new customer
segment and plus company have new products ideas with them.
TASK 4
Applying of theories, concepts, models to understand and interpret strategic directions available
to a company
Generic model of porter: Morrison is an organisation that runs supermarket chain and offers
different products at the same place. The generic model of Porter has basic three major
components that gives right direction to the organisation in dealing with current situation of
market. The three components of this model are helpful for company to know how to target
customers effectively. A strategic plan is developed by company for getting competitive
advantage in market.
Cost Leadership: as per this strategy, an organisation is aiming to achieve leadership
position in market by creating competitive advantage. Morrison is emphasising on becoming the
cost leader in reference of prices offered for products. This is helpful in providing strong
competition to other supermarkets.
Differentiation: - According to this strategy, companies adopt some new innovation in
their product or service to attract more number of customers. In context of Morrison, It focuses
on providing distinguished feature to their customers. Morrison has given additional services like
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restaurants, playing area for kids, café. Due to this, Morrison is able to build competitive
advantage in market.
Focus:- There are basically two kinds of focus strategy adopted by Morrison, one is
differentiation focus and next is cost focus (Ritter, and Andersen, 2014). Morrison uses
differentiation strategy for focusing on narrow segment of market. When a small segment of
market is emphasised, it helps in achieving needs and demands of market in an appropriate
manner.
Cost focus is adopted by Morrison for focussing on price of products and services. It
focuses on decreasing cost of products. This company focuses on minimizing cost in order to
maintain profit margin and sales. In this way, Morison is able to increase the sales and profit of
the company.
Strategic management Plan
This management plan is defined as an overview of objectives, tactics and strategies of
the organisation. These strategies are helpful for achieving mission as well as vision of the
company. In context of Morrison, strategic management plan is developed by top level
management which is mentioned below -
Mission: Mission of Morrison is to become a cost leader in supermarket chain by offering
quality products at very affordable prices to their target customers.
Vision: “ To Create better customer experience by providing high quality products”
Objectives: This company wants to provide better products to it’s customers at affordable price.
The main objective is to achieve customer satisfaction.
Extensive marketing: A special marketing team is created in Morrison for forming strategies and
attracting customers for innovating products and services offered to customers.
Market research: Morrison conducts strong and effective market research for identifying needs
and demands of customers (Rowlinson, Hassard, and Decker, 2014). This helps in reaching
potential customers and selling products to them. This research is helpful in planning of
company's overall strategies associated to new business plan.
Tactics: To achieve set objectives, Morrison adopts tactics of providing increased value to their
customers. Also they ensure to use latest technology in business operations and functions.
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