Business Strategy Report: Macro and Internal Analysis of Morrison's

This report provides a comprehensive analysis of Morrison's business strategy. It begins with an introduction to business strategy and then delves into the impact of the macro environment on Morrison's, utilizing PESTEL and SWOT analyses. The report then examines Morrison's internal capabilities using the McKinsey 7S model and VRIO framework. Furthermore, it applies Porter's Five Forces model to assess the competitive landscape and explores Porter's generic strategies. The report aims to understand the strategic direction of the organization, offering insights into its strengths, weaknesses, opportunities, and threats. The analysis includes critical evaluations of both the macro environment and internal capabilities, providing a holistic view of Morrison's strategic positioning and potential for competitive advantage. The conclusion summarizes the key findings and recommendations based on the analysis.

BUSINESS STRATEGY

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO1..................................................................................................................................................3
P1 Applying appropriate frame works and analysis of impact and influence of macro
environment.................................................................................................................................3
M1- Critical analysis of macro environment...............................................................................5
LO2..................................................................................................................................................5
P2- Internal environmental& capabilities....................................................................................5
M2 Critical analysis of internal capabilities................................................................................7
LO 3.................................................................................................................................................7
P3. Porter’s five forces model.....................................................................................................7
LO4..................................................................................................................................................8
P4. Porter’s generic strategy........................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy refers to long term plan of company that is created by the company in
order to reach the desired and common goals which outline its future state where it want to reach.
This includes companies objectives and goals, type of products and services which it plans to
build in near future and for the customer it wants to sell which defines its target market that will
help company in making huge amount of profit. Morrison is the fourth largest chain of
supermarket based out of UK which provides wide variety of products and services ranging from
clothing, home ware, electrical, beauty and various others. Present report will brief into impact of
macro environment on business strategy, provide with organisational internal capabilities, will
brief on analysis using Porter's Five forces in given market sector and will apply relevant models
and theories to understand to understand strategic direction in organisation.
MAIN BODY
LO1
P1 Applying appropriate frame works and analysis of impact and influence of macro
environment
Mission of Morrison is to always deliver The very best for less which lays down its
objectives of becoming more competitive, serving customer more better by providing local
solution with popular and useful products and services.
Strategy refers to general plan to achieve one or more goals which are long term in nature
and laid under certain conditions of uncertainty (Castañeda-Ayarza, Godoi, 2020) .
The role of strategy in Morrsion is it helps in determining direection to company where it
focuses on efforts and ensures that everyone in company is working towards a common desired
goal. It helps in parties to business operation to agree on actions that will contribute towards
business growth. There are various different strategic planning techniques to understand macro
environment such as PESTEL analysis, VRIO framework, SWOT analysis and various others
Macro environment refers to external environment that affect the business operation of
Morrison which can be understood better as by
Stakeholder analysis – This states that stakeholders can fall into four categories

High power and highly interested people – This are people in Morrison that manages closely
business operations as they are fully engaged in it and makes greatest effort and are the decision
makers who plays vital role in success of business projects.
High power and least interesed people- This are people in company that are needed to be kept
satisfied, even though they are not interested in business operation. This stakeholders needs to be
dealt with cautious as they can use there power in undesired way if they are not satisfied(Islam,
Pattak, 2017)
Low power and highly interested people – these people need to be adeqautely be informed to
ensure that they no major issues arises in company. They can serve as to be helpful wit details of
project.
Low power and low interest people- This need to be monitor and tracked but Morrison need to
ensured that they dont get bored with excessive communication.
PESTEL Analysis
It includes factors such as
Political – This factor has affected business operations heavily as brexit was major political event
that affected and bring lot of uncertainity due to variety iof changes in rules and regulations. The
operations were also affected as there were various regulation laid down by government on UK
big retailers.
Economical- As brexit caused significant fluctuation in currency and created inflationary
pressure and rise in oil prices has resulted in decrease in household budget, has impacted on
purchasing power of consumers.
Social- The company is accounting to these by offering various opportunities in its business for
rising age populations
Technological- Morrisons accounts to continuous investment in technology which has resulted in
reducing wasted efforts and making cost benefit by making business more effective and
responsive to its consumers.
Legal- This states that Company complies with various food safety and legal standards which
assures that its operations are on fair grounds and company is abide by legal laws which not
results in discontinuation of its business (Pan, Chen, Zhan, 019).

Environmental- Company accounts and take steps to reduce carbon footprints and aware its
customers and discourages to use plastic bags. Morrisons reduced use of poly boxes in its upply
chain by launching returnable 'bins' for its wide variety of products.
SWOT analysis
Strengths- Companies strength lies in strong distribution channels/network and efficient supply
chain which ensures that its product availability to end customers all across the globe. Its
strength lies in large product portfolio and customisation which ensures serving needs and wants
according to thee requirements which build customer loyalty
Weaknesses- the company to not expertise in responsing to the changes effectively which may
lead in competitors taking advantage of gaining market share which will be hard for company to
regain the throne
Opportunities- for morrison it lies in expanding its business with various convenience, online and
discount channels as they serve as fastest growing sector in United kingdom which can be highly
profitble for Morrisons as well (Phadermrod, Crowder, Wills, 2019).
Threat- the biggest threat for morrison is its competitors such as Sainsbury, Tesco and others
who can anyday come up with strategies that can threatnes market share of the company and
accounts to facing harsh time.
M1- Critical analysis of macro environment
It is required on the end of morrison to closely monitior various macro environment
factors which can affect the business decision-making and if not considered by the company can
lead to position where it may result in loss of competitive advantage which may affect the
functioning of business as it could lead to non productivity in business operation which will
threaten its position and will lead to loss of market share.
LO2
P2- Internal environmental& capabilities
Strategic capabilities refers to ability of Morrison’s to harness all its skills, capabilities and
resources in order to gain competitive advantages, and thus survive and its overall value in minds
of its potential customers. Its key components include Tools for analysis, strategic purpose,
vision and value of company, action planning, goals and various others. It could be understand
better with

Mckinsey’s 7S model- It includes
Strategy- it is plan developed by Morrisons to achieve competitive advantage and successfully
compete in marketplace. It refers to long term plan which is clearly articulated which is
supported with clear Vision , mission and strong values embedded in operations
Structure- it represents how the way business units, division are organised and includes
information of who is accoutable to whom for proper flow of communication.
System- This are the procedure which reveal business daily operations and how decision are
made. It determines how business is done and what is its main focus
Skills- these are the abilities that firms employees perform in its accordance. It includes
capabilities and competencies of individuals (Cox, Pinfield, Rutter, 2019) .
Staff – it constitutes of how many type of employees are required and how they will trained,
recruited, rewarded and motivated .
Style – it refers to how morrisons is managed by top level of management, relates to actions,
how they interact, in simple words what is there style of management.
Shared value – it relates to standards and norms that guide behaviour of individuals and here
actions which lays down the foundation of company.
VRIO framework – It includes
Value – It states the resources that add values for its customers and whether they are able to
exploit an opportunity or defent against the threats. Resources should be able to satisfy perceived
customer value. It could be done by decreasing prices of prodcuts and services. The resources
that cannot meet this conditions, leads to competitive diadvantages (Salim, Ab Rahman, Abd
Wahab, 2019).
Rare- It states that resources which are rare for Morrisons and can be acquired by very
companies . The resources which are rare helps company in getting competitive avdantages.
Company which have same resources and are not rare leads to competitive parity, which is
because they use identical resources to implement strategies that are same with which no
company can achieve performance superior in nature (HoLEE, 2020).
Imitability-it states that resources of Morrison should be costly to imitate for its competitors
which means other companies find it hard to imitate, substitue or buy at reasonable prices. This
could occur in dupicating that is directly immitating or providing with comparable goods and
services. It can be hard to imitate for competitions as it is based on historical conditions that

means resources are developed due to events that are historical in nature or over a long period
and various others.
Organised- It suggest that resources should be organised which can help in capturing value and
confering competitive advantage over competition. Morrison must organise its management
processes, systems, structure, culture and various other things which helps them in full utilisation
of its resources that are valuable, rare and costly to immitate.
Cost-benefit analysis – It is systematic approach to estimates the weaknesses and strengths of
various alternatives which are used to determine options which helps in providing best approach
to achieve benefits while preserving ssavings which can be in terms of activities, transactions.
This analysis may be used to compare completed course of action or to estimate the value against
the cost of project, decision or policy (Hong, 2018). It has two applications such as to determine
decision or investment and assessing benefit derive it from them and to provide best basis for
comparing investment to decision of each option that determines overall benefits.
M2 Critical analysis of internal capabilities
It states that company need to account to its internal capabilities, if not then it may lack in
assessing its strengths and weaknesses which my result in lack of productivity in business
operation which may lead to not taking full advantage of opportunities where it may give
advantage for its competitors to win in marketplace.
LO 3
P3. Porter’s five forces model
To have a strong strategy and competitive advantage in the market Morrison is using
porter’s five forces framework to be able to operate effectively in the market. The following
report is going to discuss the factors which are going to make the organization have higher
functioning.
 Bargaining power of buyers (Low)
There are a lot of changes which Morrison is getting in the company so that there is going to
be higher functioning and the organization is also following the trends which are present in the
company. The company is shifting their products and services so that the satisfaction of the
customers can be present in the company.
 Bargaining power of suppliers (Medium)

The company has a strong network in the market which is going to help the organization be
able to shift from one supplier to another so that there is going to be cost friendly products and
services with high quality so that the organization can maintain the loyalty of the customers and
reputation of the organization in the market.
 Threat of new entrants (Low)
New entrants are not present in the company because Morrison has put in a lot of investment
for being able to expand themselves so that there is going to be higher functioning. There are a
lot of competitors which are present in the company which are going to make the performance of
the company be limited which is not a good factor for the organization.
 Threat of Substitutes (High)
The substitute for the products of Morrison is present in the market which is a great
drawback for the company which is why the organization will have to get patents and copyrights
for their products and services which they are providing to the customers which is going to make
the organization have a stable economic factor (Islam and Pattak, 2017).
 Degree of Rivalry (High)
The competition in the market of Morrison is present and to maintain the reputation and
brand value in the market is important therefore the company gets in a lot of changes from time
to time which is going to make the organization have higher productivity and profitability.
Ansoff Matrix
The company is going to use diversification strategy for being able to expand themselves
in new market with new products. Though this is a very risky factor for Morison Company but
due to the experience which the organization is having for themselves in the market this is a very
feasible factor for the organization to have for a higher reputation and functioning. This is going
to help the company be able to have a higher unique factor and loyal customers are going to be
present in the organization as well.
LO4
P4. Porter’s generic strategy
There are two factor that influence returns of the firm if the first one is profit then the
other one will be position. If organisation position is well maintained than profit can easily be
generated but vice versa is not possible. Morison is one of rising Retail Company and offers

variety of product in firm. According to Porter strength of organisation varies on two factors
differentiation and cost advantage. Using this 3 strategic comes out namely focus, cost leadership
and differentiations. Generic strategies are called because they do not vary with company.
Cost Leadership Strategy
Organisation sells product at lower price with certain amount of quality in cost leadership
strategy. For this organisation bigger in size so that quantity increases then profit also increase
hence able to maintain market share. It helps firm in gaining advantage in competitive business.
Organisation follow various steps for implementation of this for example they have number of
supplier and by cutting price of raw material organisation able to deliver product & services at
low cost (Jack, Florez-Lopez and Ramon-Jeronimo, 2018). It helps firm to maintain financial
position while other company suffers. Mature industry has number of consumers and they can
easily provide product at lower price without starting price war. Advancing technology, skilled
& talented workforce etc. can help in declining price of the product. There are number of
strength in the company for applying such kind of strategy such as strong financial capacity to
make investment in technology to increase productivity with quality. Product design will be in
proper way so that waste raw material decreases and hence able to deliver product and services.
Firm has positive impact on delivering goods because of strong manufacturing system. Supply
chain management also be effective so that orders are places on time with low cost and hence
able to manage finance of firm.
There are number of problem that can occur from implementation of this strategy for
example competitors take helps of firm’s suppliers to stop expansion and hence decrease market
share in changing business (Heikkurinen, Young and Morgan, 2019). Advancing technology
require large amount of money which effect on financial stability of the firm for example
organisation implement this strategy but pandemic come or recession then it can become barrier.
Differentiation Strategy
In this organisation highly focused on providing high quality and unique product that can
easily influence customer for it. It can only be possible when organisation have talented and
skilled workforce and high devoted to work. Innovation and creativity highly needed in it and
hence leadership need to be transformative so that workforce able gains higher autonomy at
workstation (Pickles, Barrientos and Knorringa, 2016). Because goods of the firm are unique in
nature expected price from the customer will be premium and organisation able to distinguish it

from other brand. These types of products can only be purchased by rich or upper middle class
society and hence firm remain fixing to them. Main focus of organisation is to provide product
that have number of benefits and which can be used for longer time. Suppliers increasing cost
can also impact on price of product but firm can easily ask amount for it as customer remains
loyal to one brand. There are number of internal strength required for implementation of such
kind of strategy such as skilled engineering and scientific knowledge at workplace which help
firm in gaining competitive advantage in changing business. Team of the organisation must be
effective and prepare for any kind of technology advancement and adoption in organisation.
Promotion channels and marketing team must be strong so that large number of customer can
easily be targeted. Organisation must have good reputation from past as new firm’s product are
not welcome at higher prices.
This strategy is limited to few organisations as required high amount and specific to few
customers. Taste and Trend of customers continuously changes and hence organisation must
invest higher in innovation and creativity.
Focus strategy
In this organisation focus on narrow segment of market and try to gain differentiation or
cost advantage. In this people are targeted that are highly attracted towards particular product
and services for example In Edinburg change taste and trend to organic product and hence firm
can use either strategy to attract this group. In this people remain loyal to firm’s brand and hence
organisation able to increase profit share in changing business. Lowe bargaining and supplier
power are two component of this strategy as target area is small in terms of purchasing. Firm can
use differentiation strategy in it to rise profit and expand business in different surrounding places
of market. Internal strength in such kind of business is owner’s management and visionary skills
for the business.
There are multiple risk associated with this strategy for example changing taste and trend
of customer can effect on firm’s business and unable to become financially strong which are
necessary for expanding business. There are large numbers of competitor increase if they found
firm’s business in profitable and hence impact on market share of it.
Morison is one of the oldest retail firms in British market and has a strong reputation.
Company can use cost leadership strategy to attract large number of customer and increase

market share in changing business (Matzembacher and Meira, 2019). It has number of supplier
and highly skilled staff which can support in implementation of this strategy.
CONCLUSION
It can be evaluated from the report that effective business strategy needed for increasing
market share and increase profit. Morison is one of the important retail firm which use various
kind of strategy to attract large number of customers. Organisation faces various kinds of
challenges from external drivers such as taste and trend in UK not remain same which can effect
on growth of the firm. Internal environment also impact on growth of the firm; such as talented
and skilled workforce increase efficiency, quality and productivity of work. Porter five forces
also explain in the report which shows that supplier power for Morison is low. In the end cost
leadership strategy is use by the firm to influence customers for purchasing product & services.

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