Report on Morrison Supermarket: Strategic Position and Challenges

This report provides a comprehensive analysis of Morrison Supermarket's strategic position within the UK market. It begins with an overview of the company's history, current operations, and competitive landscape, highlighting key competitors like Tesco. The report then delves into Morrison's financial performance using a balance scorecard approach, examining financial ratios and external environmental factors through a PESTLE analysis, considering political, economic, social, technological, legal, and environmental influences. A SWOT analysis is also conducted to evaluate Morrison's internal strengths, weaknesses, opportunities, and threats. Furthermore, the report utilizes Porter's Five Forces model to analyze the competitive dynamics within the supermarket industry. The analysis identifies key challenges and potential solutions, offering insights into Morrison's strategic direction and future prospects.

MORRISON

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Question 1........................................................................................................................................3
a) Company’s current strategic position.................................................................................3
Question 2......................................................................................................................................14
Key challenges......................................................................................................................14
RESEARCH NOTES.....................................................................................................................16
Question 3............................................................................................................................16
a) Identification and evaluation of options for challenge.....................................................16
b) Implementation................................................................................................................17
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................20

INTRODUCTION
For any organization it is very crucial to have a good and effective marketing strategy
which is very helpful for them in order to stay in good startegic position in market. Present report
will focus on Morrison, which is a supermarket operating their business in United Kingdom. This
assessment will discuss about its overall performance and their current mission and also about
different elements that can affect their business activity. Further, various topics like, key
challenges of firm and what are their solutions to resolve those issues is also discussed in the last
section of this report.
TASK
Question 1
a) Company’s current strategic position
Morrison is a supermarket operating their business in United Kingdom. It's headquarter is
in Bradford, West Yorkshire, England. This company was founded by William Morrison in
1899. They started their business as a small stall in Rawson Market, Bradford, England. Over the
time that have increased their business to such level that now they are one of the best
organization in their industry. They deliver various products and services to their customers,
such as, food and drinking product, clothing, books, etc (Bull and et.al., 2016). Currently
company is operating their business effectively in their respective industry. Strategic position of
Morrison is also very stable as they are very focused in their working process. The overall
performance of company is very good as they are highly focused on their services and products,
for example:
 They are very focused in their work in order to fulfill all the requirements pf their
customers in order to enhance their performance.
Comparison with competitor-
There are in total 9 main competitors of Morrison’s including that of ASDA, TESCO,
Sainsbury, Boots, Walmart, ALDI, Debenhams, Amazon and Waitrose. In which Tesco is the
strongest competitor of company.
Balance score card of Morrison’s-
Financial Customer Internal process Learning and

The main objective if
company are growth,
profitability and
increasing or maintain
the shareholders’
value. So that of
Morrison is grow
sales and maximizing
profits. This will be
measured as per the
evaluation of last 5
years profits as the
sales of company is
increasing in every
quarter of each year.
Customers are the
main element of any
company who are
expecting mainly 4
things from any
company including
like that of
performance, quality,
service and cost as
well. Morrison will be
including all these
objective and then
measuring the
objective with help of
steering wheel as
their main goal will
be customer retention,
highest quality,
lowest price,
customer satisfaction
with product and
pricing.
This is also one of the
most important
element of company
which is impacting its
cycle time, skills or
employee and their
productivity as well.
One of the most
important objective of
Morrison in respect
with internal
perspective is that of
improving quality of
product and employee
skills.
growth
This will be regarded
to as improving the
innovation and
technological
advancement so that
it could be helpful for
company in reviewing
the standards of
company. So in this
respect the main aim
of Morrison is to
improve capabilities
of employee, focus on
product and
delivering consistent
time.
Financial Status of Morrison :( Morrison (Wm) Supermarkets PLC. MRW. 2018)
Growth ratio:
From the table it could be included that tax rate of Morrison is increasing as in 2017 it was 6.15 and in
2018 it was 18.16.

Profitability Ratio:
From the table it could be identified that profitability of Morrison is decreasing as the current ration of
company in latest quarter is 0.37 which in 1st quarter of 2018 was 0.41.
Financial Ratio:
From the table it could be included that inventory turnover of Morrison is increasing which means that
it was 25.58 in 1st quarter of 2018 and latest quarter it was 27.34

Factors affecting their external environment
These factors are highly important for Morrison in order to study and understand external
or macro environmental factors, which can affect their management or their business activities (5
Strategies to Improve Organizational Effectiveness. 2016).
PESTLE Analysis of Morrison:
PESTLE Analysis
Political  This can have a huge impact on their activities in which they operate

their business.
 There are various laws and regulation in UK which they have to follow
effectively in order to perform well.
 For example, laws related to food standards, i.e., Food Standard act
1999.
 Other than this they also have to follow all the legislation which can
have a huge impact on their business, for example, employment law,
labour law, etc (Hill, Jones and Schilling, 2014).
 All these laws will help Morrison to deliver the best service to their
customers.
Economical  This is very important for Morrison to keep a good knowledge of
country's economy in which they are operating their business. As this
will help them in working accurately.
 There are various economy factors that can have a huge impact on their
business, such as, taxation, interest rate, inflation rate, etc (PESTLE
and SWOT Analysis: When to use SWOT, 2014).
 Other than this, it also includes, cost of transport, raw material, energy,
etc. which are crucial for them to perform their function effectively.
Social  Working in a supermarket, it is very important for them to understand
the needs and requirements of their customers in order to fulfil their
demands effectively.
 There are various social-cultural factors that can have a huge impact on
their business, such as, their purchasing Behavior, age, gender, income
status, demographic, etc.
 Consumers are nowadays more educated and looking for healthy eating
habits which can also affect them (Hourani, 2017).
Technological  These are considered as one of the most important factor for any
business to have in their organization.
 Morrison can apply the latest technology in their system in order to
increase their performance, such as, they can introduce online payment

for their customers.
 There is a huge impact of internet and use of social media, such as,
Twitter and Facebook in order to support supermarkets brand.
Legal  These are very important for Morrison to follow all the rules that are
mandatory for them to work in legal manner.
 These legal factors can include laws, such as, Health and Safety law,
employment law, etc.
 These can have a huge impact on their business if it is not followed
carefully (PESTLE and SWOT Analysis: When to use SWOT, 2014).
Environmental  Today, individuals are very concern about the environment. To
maintain a good value in the industry, it is crucial for Morrison to take
care of this factor effectively.
 They can reduce the use of plastic bags in their organization and can
replace it with paper or recycled bags.
 This will help them in reducing the negative impact on environment
(Hourani, 2017).
Corporate
governance
 The board of directors of Morrison will be responsible for setting and
approval of strategy which is related to progress towards the
achievement of all these objectives. This will be monitoring financial
performance and critical operational issues and risk.
Social
responsibility
and ethics
 It is very much important that all companies are following this social
responsibilities and ethics which includes that Morrison is ensuring
that they are sharing responsibility with their suppliers in ensuring that
all people treating the product and working place safe and treating it
fairly as well. They are also member of Ethical Trading Initiative (ETI)
since 2016 which is supporting their activities through funding
research and active membership of cross sector working group.
To evaluate the internal strength and weaknesses, Morrison can implement SWOT
analysis which can assist them in understanding their internal factors effectively.

SWOT Analysis of Morrison:
SWOT Analysis
Strengths There are so many factors which contributes in increasing their strength in their
respective industry. These factors include,
 They have a good brand value and reputation in market.
 Morrison has effective management of their supply chain.
 They have a very strong selling point, which helps them in delivering the
best services to their customers.
 They also have a good financial support (Moreno-Izquierdo and et.al.,
2016).
Weaknesses To improve their business, it is very important for them to work on their
weaknesses, such as,
 They have implement internet facilities in their organization which can
help them in delivering a good service to their customers.
 They also do not have convenience stores in UK which has a huge impact
on their business (PESTLE and SWOT Analysis: When to use SWOT,
2014).
Opportunities There are various opportunities which can help them in enhancing their business
more in order to achieve their aims and targets, effectively.
 There is a great opportunity to start their online business.
 They can include diversified products in their organization (Hook,
2017).
 They can implement new tools and technology in their business as well.
Threats There are so many threats which can affect their business performance and their
activities as well, such as,
 There are so many retail stores operating in UK which has online
business.
 There is a huge competition of prices which they deliver to their
customers.

 High level of competition is another factor which can give them a huge
threat for their business (PESTLE and SWOT Analysis: When to use
SWOT, 2014).
Market analysis of Morrison
This process or analysis is very useful for Morrison in order to understand their
market and their position in the industry, respectively. This will be very useful for them in
enhancing their and growing their business more. It can be analyzed by implementing
Porter's Five Forces Model in their business (Hook, 2017).
Porter's Five Forces
Competition  This is the most common
factors which can give them a
huge competitive advantages.
 This is generally very High
for Morrison as there are so
many companies operating in
UK which delivers same
services and products to their
customers, such as, ALDI,
ASDA, etc.
Threat of new entrants  This factor is Moderate or
Low for Morrison as they
have a good reputation and
brand value in their respective
industry.
Bargaining power of
suppliers
 This is as compared to their
competitors is on Low rate, as
this has less impact on their
business.
Bargaining power of  This is also Moderate or

customers Medium for Morrison as
bargaining power of their
customers is usually low for
them and does affect them
(Hook, 2017).
Threat of substitutes  Morrison has a good strategic
position in market. But still
this factor is high for them.
Key Performance Indicators
There are some of the key performance indicators of Morrison’ which is explaining the
impact of their strength on their profitability and selling trend as well. This is divided into 2
section which are financial KPI and Non-financial KPI.
Financial KPI
Like for like sales- this will be measured to as
sales which is termed to as store based sales on
same basis the previous year and excluding the
impact of opening and store disposal as well
Underlying profits- this will be measuring the
business performance profits are adjusted with
removing the volatile or one-off cost and
credits.
Non-financial KPI
Carbon footprints reduction- this includes
energy, waste and refrigeration for all their
stores and packing
Waste to landfill reduction- Any of the
remaining waste from their stores which is
unable to recycle will be processing as
percentage of total waste compared to previous

year.
VRIN Model
This is very much important model which explores the certain factors which are related to
company like that of its value, rare, imperfect and Non-substitutable.
Value
 Efficient
distribution
network
 Well planned
supply chain
management
Rare
 Market
presence
 Quality of
human asset
Imperfect
 Brand value
 Reputation in
market
Non-substitutable
 Very strong
selling point
 Good financial
support
Analysis of Morrison's Capabilities
McKinsey 7s framework is a great tool which can be used by Morrison in order to
analyze their capabilities and strength. This method can be very useful for Morrison to
understand their organization better and make their staff members to work efficiently and
effectively as well for the organization (Hourani, 2017).
This McKinsey 7s framework has two elements, i.e., soft and hard elements, which has
several factors present in it.

McKinsey 7s Framework
Soft Elements
 Shared Value : This factors is very helpful for
Morrison's to make their employees dedicated
towards their work in order to have better outcome
for them.
 Skills : Morrison has good and skilled employees
working effectively with them. This assist them in
gaining good revenue and profit from their
business.
 Style : They have a good and effective leadership
style in the organization.
 Staff : There is a good coordinated between their
staff members and which helps in keeping them
motivated (Moreno-Izquierdo and et.al., 2016).
Hard Elements
 Strategy: Morrison has high and good effective
strategic planning with the help of which they
enhance their business.
 Structure: Maintaining a good structure of the
organization and great relationship among
employees and customers can enhance their
performance.
 System: Properly maintained and systematic
structure, which includes production, planning,
control system, etc.

Question 2
Key challenges
For Morrison it is very important to have a proper monitoring on all their activities as this
will assist in understanding all the issues and problems of the organization and can be resolved
by them. Operating business in a supermarket or retailer industry, there are numerous challenges
which Morrison can face and it must be minimized by them effectively in order to improve their
overall performance in the industry.
Some key challenges are explained below:
1. They have to get all the latest and new technology which is required in their business to
enhance their service.
2. They have to increase their competitive advantages as this will help them in delivering
the best services to their customers as compared to their customers (Moreno-Izquierdo
and et.al., 2016).
3. Their pricing policies will be found to be very much problematic for Morrison as they are
having very much unique selling point having own meat production. But then also they
are not able to tackle their rivals within sector in way of quality and not able to win over
customers.
4. It was not until 2013 that Morrison launched its online fresh food offering, in partnership
with Ocado. It was a whole 14 years behind biggest rival, Tesco. The UK online food
market is forecast to grow to £14.6bn by 2018 and has proved an important tool in
maintaining market share. This is also their biggest issue which is faced by company.
Why is it important for Morrison?
All the above stated problems or issues are very much important to get resolved on time
so that company could be able to expand their organisation. As if they are having effective
pricing policies then it will be possible for them to compete with all their rivals in market. While
it is also very much important that they are including all sort of latest technology which could be
helping them in penetrating into market.

What is consequence if company does nothing?
If Morrison is not able to do anything for the above included problems or issues then it is
very much common that company will not be able to compete in market, be able to lead into
market, to be able to retain their customers and to be able to use latest technology as well.

RESEARCH NOTES
Question 3
a) Identification and evaluation of options for challenge
From all the challenges and issues that have been identified above has a huge impact on
the business of Morrison. Most crucial factor on which they have to work on is the
implementation of new technology in their business on the basis of which they can enhance their
business (Acha, Du and Shah, 2016). For this Morrison can apply market analysis method which
will help them in getting all the important information that will be very useful for them.
Ansoff Matrix of Morrison:
Market Penetration Product Development
 This helps in focusing on their pricing
strategies.
 The can introduce new and unique
products in the organization.
Market Development Diversification
 This will help in applying all the latest
technology in their business (Ansoff
Matrix, 2016).
 Delivering services according to the
need of their customers.
SFA Matrix
 Suitability : This factor will help them in analysing the extent to which the strategic
opportunity is suitable for them if they implement these model.

 Feasibility : This process is very helpful in checking the capability or feasibility of all
the strategies which is implemented by Morrison.
 Acceptability : This method helps in analyzing all their financial stability and their
interest into their strategy (SFA model, 2014).
Porter's Generic Strategy
 Cost Leadership : Good
 Differentiation : Good
 Cost Focus : Moderate
 Differentiation Focus : Good (Porter's Generic Competitive Strategies, 2016)
Current Position of Morrison
Morrison has a good brand value in the market which helps them in increasing their business
effectively. But in order to compete with their customers, it is crucial for them to implement
some strategies in their organization to improve their overall performance. For example,
 They have to spend some money to implement new and latest technology in their system
(Acha, Du and Shah, 2016).
 They also have to increase their marketing techniques as well to achieve their target and
objectives, respectively.

For the effectiveness of research and development department of Morrison, it is
mandatory for them to have an effective market analysis team which can help them to gather
information related to their business which they can use in making required improvement in their
products and services.
b) Implementation
Morrison is a leading company in their industry, which makes mandatory for them to
have effective management in the organization. To increase the effectiveness of an organization
it is very important to have a good research and development plan (Lam, 2017). For the
implementation of the strategy to have a skilled knowledge of all the technology which they can
use in their research and development process can include,
Using the latest Technology:
For Morrison, technology has a huge role in their business.
 Having latest and new technology can aid them to improve and innovative their service
in order to enhance their services and products (Morgan, Tallontire and Foxon, 2017).
 Having proper tools and techniques assist them in increasing their customer rate.
Focusing on increasing Growth:
If Morrison has effective leaders and employees, then it can be achieved effectively.
 A good leader will understand all the strengths and weaknesses of company before

implementing any strategy to improve the effectiveness of the organization.
 After analyzing the strengths and weaknesses, they should concentrate on the growth of
the company by building effective teams.
 Efficiency in a company requires an understanding of different professionals and their
role within the business (Morgan, Tallontire and Foxon, 2017).
Working on their Quality Services or Products:
This can have a huge positive impact on the business of Morrison.
 Providing the best quality of work to their customers can help them to increase their
customer rate.
 This can be achieved by making innovative change in their existing products (Morrison,
2014).
All these strategies will help Morrison if they implement it on their organization
effectively.
CONCLUSION
From the above report it can be concluded that for nay organization it is very important to
have all the latest technology in their system in order to increase their performance in the
industry. This report has explained various analysis which is very useful for Morrison to
understand their organization better, such as, PESTLE and SWOT analysis. Further it has also
explained about McKinsey 7s framework that is used to evaluate the overall capability of
company. Implementing all these strategies will help them in addressing all the challenges and
issues effectively.

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