Analyzing External Factors Affecting the Morrison Supermarket Business

This report provides a comprehensive analysis of the Morrison Company, focusing on the impact of external factors on its business operations. The report employs the PESTEL framework (Political, Economic, Social, Technological, Environmental, and Legal) to examine how various external forces have affected the company over the past three years, with particular attention to the influence of the COVID-19 pandemic. The analysis covers political factors such as policy changes and government regulations, economic factors including interest rates and inflation, social factors like consumer behavior and demographics, technological advancements, environmental standards and regulations, and legal considerations such as safety and health laws. The report highlights how these factors have influenced Morrison's performance, profitability, and strategic decisions, providing insights into the company's ability to adapt and thrive in a dynamic business environment. The report concludes with a summary of the key findings and their implications for the company's future.

BUSINESS IN 21st
CENTUARY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
The way external factor affect the Morrison company....................................................................2
1. Political Factor.........................................................................................................................2
2. Economic factor.......................................................................................................................3
3. Social Factor............................................................................................................................3
4. Technological Factor...............................................................................................................4
5. Environmental factor...............................................................................................................4
6. Legal factor..............................................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
The biggest pandemic of COVID-19 affect the profit of the company but sale also
increases during the pandemic. In the 21st century all business are moving smart and digitally and
focus on provide customer satisfaction and healthy food.(Seyitoğlu, and Ivanov, 2020. ) Its
nature of business provide fresh and quality food & grocery to their customers. Its area of
business increase year by year currently have 110,000 and it has 494 supermarkets across the
United Kingdom. It is financially strong company in the year 2020 turnover around 205 billion.
In this project analysis in detail about the Morrison company and changes in its external
environment over the last three year have affected the company and the affect of COVID-19 on
the company will be discussed.
MAIN BODY
The way external factor affect the Morrison company
External factor can be stated that this factor directly affect the business operation of the
company and it is uncontrollable by the owner of the company. This factor largely affect the
business operation and performance there are various external factors such as economic, social,
political, legal, environmental and technological. The way external factor affect the Morrison
company over the last three year can be understood through PESTEL analysis.
1. Political Factor
The political factor affect the Morrison supermarket performance, chances of survival
and the profitability in a market. The changes in policy and government so it affects the company
because when the policy and government changes so Morrison have to adopt the changes and
apply in their company so the chances of survival and profitability of company affect the
performance. (RASHID, 2020)The Local government play a crucial role in the making of policy
because they know very well their country. In a changing political environment of retail sector
industry if Morrison wants to accomplish success across several countries so it has to modify the
systematic risk. Business, 2021, [Online]. Available Through:
<https://www.channel4.com/news/business>.Morrison faces risk of political system and changes
in the political environment because it increases their area of operation and expand their retail
chain across the UK. The Brexit policy between European Economic Area and the united
kingdom means that there is the exit of trade between both the country so that the changes in the
policy of the United Kingdom so adopting and applying the new changes takes time. It is
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supermarket which supplies the fresh food and grocery and also the biggest supermarket chain
across the country so during the biggest pandemic COVID-19 the UK government give more
importance to healthy and safety and make new policy so its profitability is affected and the sale
is increases. It analysis before entering into the market like they face Military invasion risk,
follow the anti-trust law, provide employee mandatory benefits and check the labelling of the
product.
2. Economic factor
Economic factor play a important role for the Morrison company because it directly
relates to economy. In the economic factor included the interest rate, foreign exchange, total
demand, inflation rate and so on. All those changes which are happen in the economy have to be
apply in the company. It provide their product and services across the United Kingdom so in the
both international and local market when the price is fluctuate so it also affected. (Khan, and et.
al., 2019)The changes in the interest rate, foreign exchange rate, saving rate, aggregate
investment, inflation rate so it directly affects the internal factor of the company. The GDP of
every economy shows the position of the company the higher GDP shows the demand in the
country is growing. The consumer disposable income move increases to decreasing trend so to
increase the consumer disposable income it tries to expand their market to traditional customer
by using marketing campaign. (Mihailova, 2020)The deficit increased in the government
monetary and fiscal policy so it directly affects the economy. The more changes occur in the
economic factor. Due to the COVID-19 GDP of the United kingdom is decreases so the demand
is decrease and aggregate investment is decrease so the economy growth is decline. Business in
Context: An Introduction to Business and its Environment, 7th Edition, 2021, [Online].
Available Through:<https://www.cengage.co.uk/books/9781473758391/>. The Brexit effect also
affect the UK economy that offices, companies and business transfer from the Britain. The
Morrison company sale is affected and not take the advantage of the relief and subsidy.
3. Social Factor
Social factor are those factor which affect the consumer behaviour and life style like
culture, demographics, education level, attitudes toward safety and health. The Birth rate also
affect the demand when the birth rate increases so the future demand is increases and growth of
the economy is increases. (Martino, and et. al., 2017)According to the customer culture and
attitude the Morrison manufactured the product so the sale and profitability is increases. The
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saving attitude of the UK people are 15% and most of the money is invested so by investing the
money the earn greater return. Morrison identified the UK society power structure by this the
analysis the effect on the demand. It supply their product and services across the UK so
understand of contract between society and government of the other country in the country they
offer their services and product.Business, 2021, [Online]. Available Through:
<https://www.channel4.com/news/business>. The scenario of COVID-19 affect the people
behaviour they are more focus on their health and safety so by that the cost of the company is
increases.
4. Technological Factor
The role of the technological factor in the retail industry is growing very faster also in the
other sector. It is a food and grocery related sector technology play a very important role by
providing fast delivery because in the busy no one have time to go on store and purchase the
products. It retains their customer by adapting new technology and satisfying their customer by
fulfilling their needs.(Nandonde, F.A., 2019) Adopt the advancement of technology is necessary
for the Morrison necessity for compete with new competitor in the market. Increases the new
technology also increases the cost structure of retail industry but in the end it gives the advantage
and in the consumer sector services technology provide major impact to structure to value chain.
It invests the big amount in the innovation and in the sector of technological development, so for
that it recruit the talented and digital friendly people. During the pandemic of COVID-19
Morrison company sales is rises and cost, rofit is affected, it gains the advantage of this scenario
provide online services to their customer and increase sale. The upcoming era is also
technological so take the benefit for longer period of time and survive in the market. Business in
Context: An Introduction to Business and its Environment, 7th Edition, 2021, [Online].
Available Through:<https://www.cengage.co.uk/books/9781473758391/>.The impact of the
Brexit on the U.K technology and innovation that in this sector it performs better than the
European union country and follow the strategy of digital single market.
5. Environmental factor
Every industry has different environmental standard in the different market and it affects
the organizational profitability, different country have different environmental norms, policy and
norms. To enter the other country must follow the environmental norms of that country, It
focuses other countries and spend the major part of the budget on renewable technologies and it
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is a competitive strategy.(Iacovidou, and et.el., 2017) Morrison have recycling policy for the
waste management and rules and regulation for water and air pollution and make ecological and
green products. It focuses on manufacturing this product which are environment friendly. It
follows both the local and national environmental standard and also decision about the
development of product, location of the plant, pricing related strategy (Business in Context: An
Introduction to Business and its Environment, 7th Edition, 2021). In the pandemic it more focus
on the healthy, safety, clean retail product and provide fresh food and satisfy their customer.
6. Legal factor
By considering the legal factor the organization run their business every country have
their own and different legal law and this all about the protection of the organization. Morrison
have to follow the safety and health related law and after that offer product in the market and
clearly know the business law. (Manh Cuong, and Hung, 2020)It has to locomote the law related
to employee of the organization like treated equally and provide opportunity to their employee.
Protect the property intellectual law like patent and copyright for protection of their data. In the
current scenario of COVID-19 there are new safety and health law and out their employee from
the company also not cut the employee salary.
CONCLUSION
It can be concluded that in the 21st century business move ahead with the digitally and
Morrison is one the that which move digitally. The external factor is also affected the business
performance directly and indirectly and the COVID -19 outbreak of the economy hits the
economy very badly. The Morrison doing their all the activity of business by consider the all the
factor like political, economic, social, legal, technological and environmental. The exit from the
European union company it's also affected positively or negative.
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REFERENCES
Books and Journal
Iacovidou, E., and et.el., 2017. A parameter selection framework for sustainability
assessment. Sustainability. 9(9). p.1497.
Khan, Z., and et. al., 2019. Total retail goods' consumption, industry structure, urban population
growth and pollution intensity: an application of panel data analysis for
China. Environmental Science and Pollution Research. 26(31). pp.32224-32242.
Manh Cuong, N. and Hung, P.V., 2020. Sea navigation-based Thai Canal implication: an
analysis of its effect on the Vietnamese maritime industry. Australian Journal of
Maritime & Ocean Affairs. 12(2). pp.83-94.
Martino, G and et. al., 2017. Supply chain risk assessment in the fashion retail industry: An
analytic network process approach. Int. J. Appl. Eng. Res. 12. pp.140-154.
Mihailova, M., 2020. The state of agriculture in Bulgaria–PESTLE analysis. Bulgarian Journal
of Agricultural Science. 26(5). pp.935-943.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4). pp.54-61.
RASHID, C.A., 2020. Balanced Score Card and Benchmarking as an Accounting Tool to
Evaluate Morrison’s Performance. Journal of Global Economics and Business. 1(3).
pp.59-72.
Seyitoğlu, F. and Ivanov, S., 2020. A conceptual framework of the service delivery system
design for hospitality firms in the (post-) viral world: The role of service
robots. International Journal of Hospitality Management. 91. p.102661.
Online
Business in Context: An Introduction to Business and its Environment, 7th Edition, 2021,
[Online]. Available Through:<https://www.cengage.co.uk/books/9781473758391/>.
Business, 2021, [Online]. Available Through: <https://www.channel4.com/news/business>.
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