Business Strategy Report: Morrison Company's Competitive Analysis

This report offers a comprehensive analysis of Morrison, a leading UK supermarket chain, focusing on its business strategy. It begins with an introduction to business strategy and its importance, followed by an examination of Morrison's internal environment using the McKinsey 7-S model. The report then conducts a SWOT analysis to identify Morrison's strengths, weaknesses, opportunities, and threats. Furthermore, it applies Porter's Five Forces model to evaluate the competitive landscape within the retail sector and assesses Morrison's position. The report also incorporates the Ansoff matrix to explore market development, product development, market penetration, and diversification strategies. The analysis provides insights into Morrison's strategic planning and its approach to maintaining a competitive edge within the industry.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 2............................................................................................................................................3
P2: Internal environment and capabilities of an organisation................................................3
P3: Evaluate competitive force for Morrison company.........................................................6
TASK 4............................................................................................................................................8
P4: Apply various theory, model, interpret and devise strategic planning for Morrison
organisation............................................................................................................................8
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................12

INTRODUCTION
Business strategy includes the decision or long term plans which are made by business to
fulfil the objective of an organisation. It is a significant part of an organisation that helps to gain
competitive edge over the rivalries by analysing the internal as well as external factor
significantly. To better understand the topic Morrison company has been selected which is one of
the leading supermarket chains in UK that deals in various food and non food items such as
grocery, bakery, frozen food, magazine, beverages, clothing and so on. Following report cover
topics like impact and influence of macro environment in business strategy. Evaluate internal
environment and capabilities of an organisation. Moreover, analyse porters five factor model and
application of various theories and model are covered in this report (Benito, 2015).
TASK 2
P2: Internal environment and capabilities of an organisation
Internal environment: It refer to the environment which are in control of organisation
so the role of management is to strengthen these factors in order to gain competitive advantage
(Blackburn, Hart and Wainwright, 2013).
McKinzie's 7s model:
The 7s model is used by the company to manage the issues or decision related to internal
situation effectively. For instance, enhance the performance of overall business, vital decision
relation to merger or acquisition, changes that needs to be adopt within the organisation and so
on. Thus, if include seven factors which are categorised within hard as well as soft elements.
Hard element: These factor are easier to understand for the organisation as well as
management can influence these factors directly.
Strategy: It include planning part which is done by an organisation to overpower their
competitors (Campbell, Edgar and Stonehouse, 2013). In context to Morrison company which is
a part of supermarket chain have adopted cost effective leadership strategy in order to sustain in
the competitive environment. This strategy has positive impact the company to encourage the
customer in order to buy the daily necessity item from particular store. In addition to it, company
took the advantage of its economies of scale to expand their approximately four hundred retail
store across UK.

Structure: There are various structure such as divisional or hierarchy structure which are
followed by different organisation that makes it easier to define whom will report to whom
(Croteau and Bergeron, 2015). Herein, Morrison company has adopted hierarchical structure
which consist of various layer or level and each level has its own roles and responsibility that
they need to fulfil such as the responsibility of store sales assistance is to help the customer and
increase the footfall of store.
System: System include the daily or routine activities which are conducted by employee
and make contribution to achieve organisational objective. In context to selected company has
adopted performance appraisal system where monetary or non monetary benefits are offered to
the staff based on their performance which positively build their experiences. Further, monetary
benefit include salary hike and bonus whereas non monetary benefit include appraisal and
recognition that encourage the employee to enhance their performance.
Soft element: Such factor are more difficult to understand and are more likely to get
influenced by culture (Doeringer and Terkla, 2015).
Shared values: It refer to the core values, ethics as well as culture which is adopted by an
organisation. In terms of selected company has adopted relationship oriented culture where the
retail store take care of the personal requirement of staff. Further, helps the organisation to attract
the new aspirant and retain the existing ones to increase profitability and positively affect the
operations of business.
Skills: Skill refer to the competencies or capability of an internal staff who are the part of
an organisation. The company provide training as well as development programme regularly to
enhance their commination or listening skill. This helps the employee to groom their personality
as well as existing knowledge that lead to employee engagement. Therefore, it finally helps
organisation to gain strategic advantage over others.
Style: Style means the leadership style adopt for the internal staff of an organisation.
There are various leadership style such as autocratic, democratic as well as laissez-faire the
purpose of selection most desirable strategy is to influence the behaviour of employee towards
achievement of objective (Ghemawat, 2012). In relation to Morrison company has adopted
democratic leadership style where the staff of an organisation are encouraged to give their
opinion or views in order to make effective decision.

Staff: The manager of human resources are responsible to fill up the vacancy of an
organisation based on the requirement of an organisation. Thus, selected company make sure
they select the most suitable candidate to maintain the synergy within the organisation.
From the above model it has been concluded that Morrison company must consider both
hard as well as soft element that can impact the organisation. Like the strategy such as cost
effective, structure and performance appraisal system is designed and maintain by the
management to provide benefit to the Morrison organisation. Whereas, in context to soft
element where the manager of respected organisation helps to develop the skill of an individual
by using appropriate leadership style. This helps to maintain cooperation as well as coordination
among the staff to achieve objective successfully.
SWOT analysis
STRENGTH
Huge product portfolio: Morrison company
gives their customer huge base of various
products such as frozen food items, clothes
beverage and so on which highly provide
convince to ultimate customer (Insinga and
Werle, 2014).
Acquisition: Morrison is one of the prominent
company that has formed strategy alliance with
other companies to strengthen their position.
High customer satisfaction: Company
provide training and development programme
to their staff due to which their staff remain
encouraged to form long term relationship with
customer.
WEAKNESS
Limited reach: Although respected company
earn good amount of profit but their serving
area is restricted. Hence, mostly confined to its
home market that is United Kingdom.
Attrition rate: Marrison has higher attrition
rate due to which company relatively spend
more on training and development that
increases the expenditure of company.
More investment in technology: In order to
expand the business in new geographical area
company need to make more investment in
technology which leaves more burden on
company.
OPPORTUNITY
Expand the market by catering changing
requirement: In terms of food item the
demand of organic food has been increased as
people are becoming more health conscious.
THREAT
Competitors presence: Competitors of
Morrison company such as Tesco retail store
are serving to more geographical area ion
comparison to selected company. Therefore,

So its an opportunity for respected firm to
serve various variety of such product
(Morrison SWOT analysis, 2018).
Strengthen online channel: As people are
more willing to purchase the necessary good
through online platform. So company must
progressively make effort to strengthen their
distribution chains due to which food gets
delivered within stipulated time period.
increase share of rivalries can affect the
profitability as well as productivity of
company.
Change in external condition: Change in any
government policy such as taxation or rules
and regulation of UK can affect the operation
of company.
Therefore, SWOT analysis helps to gain the deep insights about the internal environment
by identifying the strength and opportunity which help the organisation to overcome the
weakness and encounter the threat successfully.
P3: Evaluate competitive force for Morrison company
Porter's five force factor model:
It is a management tool that help to determine the profitability as well as attractiveness
that give competitive landscape to the company.
Existing rivalries: The existing rivalry within food as well as retail sector is high due to
which Morrison company must concentrate on both physical as well as online store. Along with
company must analyse the changing trend or behaviour of customer, aggregate demand and so
on. Moreover, desirable promotional strategy are adopted by organisation to communicate as
well as compel customer to purchase the product from respective company(Michie and Sheehan,
2015).
Threat of new entrant: It is relatively difficult for the new entrant to enter and survive in
retail sector within UK (Yip, 2014). The reason being it require huge capital investment and
strong existence of existing rivalries such as Morrison company. As respected company is
already selling optimum quality product at low price due to which there is low threat of new
entrant. Therefore, firm must sell differentiated product and promote it through different mode of
promotional tool which lead to weak force of new industry.
Threat of existing competitor: The retail store of Morrison store sell diverse number of
product and services under one roof along with that there are comparatively few substitute within

retail store that are into price wars due to which there is low risk of substitution. Moreover,
organisation can not control the firm to switch from one reatil store to another in that case
selected company can provide high quality of product to customer in order to compel them and
remain stick to the single brand.
Bargaining power of buyer: Morrison sell their product through both retail store as well
as online platform at reasonable price because customer has choices among the various industry
due to which they have high bargaining power. Thus, company make sure rather then selling
standardise product they sell differentiated item which lowers the switching cost and make brand
loyal customer. Hence, buyers are price sensitive and have alternative options available due to
which respected industry adopt favourable strategy.
Bargaining power of supplier: Supplier plays a significant role in making the raw
material available to the company and performing their managerial operations significantly.
Further, it is essential for the organisation to formulate good relationship with supplier to get the
quality material within specific duration. In term of retail sector within UK there are alternative
among retail sector due to which supplier are in state to bargain that result into high bargaining
power of supplier. Therefore, selected firm must formulate effective relationship between
management and employees to gain advantage over other rivalries (Slocum Jr and et.al., 2017).
Hence, the main advantage associated with the porter's model is to shape the industry by
determining the external environment where business has to perform its function. So after
analysing the power or influence of various other factors such as bargaining power of customer,
company operate accordingly.
Ansoff matrix:
Ansoff matrix of product market expansion that include various strategy applied by an
organisation to expand their business.
Market development: It refer to the situation when existing product is introduced into the
new geographical area. The main purpose of this strategy is to target people of new market
which finally helps to expand the customer base. In terms of Morrison company majorly has
expanded their store from north England to south England. Currently, company has more than
four hundred stores which operate across England, Scotland as well as Wales.
Product development: It refer to the situation when business bring innovative product
based on the requirement of customer in the existing market. Thus, selected company in order to

sustain in immense competition keeps on offering new product like organic product at
discounted price to attract the customer.
Market penetration: It refer to the situation when existing product are sold in existing
market with the motive to expand the market share of company. Morrison company has adopted
competitive strategy to maintain the existing market share for which they run various
advertisement campaign of their discounted product.
Diversification: Diversification is the most risky situation as here an organisation makes
plan to switch in completely new market may be international market with their completely new
product. Although respected company earn huge revenue from their home country that is United
Kingdom but it does not take high risk to expand their business in any emerging economy such
as developing country.
Therefore, among the various strategy Morrison company can adopt market development
strategy where the company can make the strategy to switch new place or new geographical area.
As the competitors of selected company are continuously expanding their operations due to
which their market share can hamper the grown of Morrison company. In that case Market
development will work effectively for the company.
TASK 4
P4: Apply various theory, model, interpret and devise strategic planning for Morrison
organisation
Porter's generic strategy:
In order to maintain the profit and leverage the strength of organisation there are various
strategy such as differentiation strategy which is adopted by organisation to maintain their
position within retail industry (Market planning with Tesco, 2018).
Cost leadership strategy: Within this strategy firm sell their high quality product at low
prices to maintain as well as expand the market share of company. In context to, Morrison
company can adopt there strategy to sustain into competitive market of retail business to gain
desirable profitability as well as productivity. Here company is into price war which might
decrease the profitability ratio of company but can help the firm to gain the advantage of
sustainable development.

Differentiation strategy: Under differentiation strategy innovation product is introduced
into the market with unique features that helps the customer to recognise the product among the
rivalries. Thus, due to such value addition company can change premium pricing for its product
and customer won't hesitate to purchase such good. Further, Morrison company can adopt this
strategy to gain the additional revenue and enhance their profitability ratio. Therefore, if the firm
has internal strength like effective research team, skilled workforce, global reputation and strong
sales team then they can easily opt for such strategy.
Focus strategy (low cost): Here company serve in narrow market with cost effective
strategy to maintain the trust of customer and make them loyal towards the brand. Adoption of
such strategy basically discourages the competition rate within the sector. In relation to Morrison
company can adopt such strategy to cover the specific market with loyal customer.
Focus strategy (differentiation): This strategy is adopted by the firm to charge premium
price for their product within confined area that leaves less alternative for the company. The firm
gain the advantage of low bargaining power of supplier as there are low or no substitute of
organisation. Hence, if Morrison company adopt this strategy then they can earn good revenue
from small market as well and finally the fund can be util8ised to expand the market operations
effectively. Therefore, it enhance the image of product within the public
Therefore, among various strategy Morrison has adopted cost leadership strategy and is
into price wars. Company basically uses it capital to match the competitors strategy and form
barrier for entry of new entrant. Moreover, in order to maintain long term sustainable growth
company must strengthen its distribution channel and must provide expertise for the smooth
process of manufacturing. Thus, the skill of labour are enhance in order to produce the product
by minimising the unnecessary expenditure of company that minimise the total expenditure of
company and generate more profit for company.
Bowman strategic clock strategy:
This model emphasize on strategic positioning where the product are positioned in the
mind of customer in such as manner it gains competitive position within the market. Adoption of
such model helps the organisation to offer various options in order to position the product based
on dimension like price and perceived value. Therefore, it include following strategies which are
defined below:

Low price and low added value: This the the ineffective strategy which can only give
help to sustain the business as it not provide any value addition to the customer. Perhaps it is not
the competitive strategy due to which it is also referred as bargain basement strategy as here
company cut down their prices in order to sustain and compel the customer trio make purchases.
If respective company adopts this strategy then it needs to lower down in comparison to
competitors but it does not guarantee customer will prefer it for long term.
Low price: In order to flourish the business low cost price strategy is adopted to increase
the output or volume of product in order to generate huge market share. Herein, Morrison
company can take the advantage of its economies of scale to expand the volume of their product
and lower down the final price of product. It usually led to intense competition which is totally
based on price wars.
Hybrid: It is one of the most effective price strategy which grab the attention of huge
customer as it involve the mixture of differentiate product as well as relatively low price in
comparison to competitor. Therefore, if selected firm adopt such strategy it can give them huge
advantage to persuade the customer for the product.
Differentiation: The aim of this strategy is to serve highest quality of product at
reactively high price due to which branding of the product is done. Within this firm promises the
customer regarding the quality of product because of which the ultimate user find worth buying
the product. Moreover, it gives advantage to the firm to gain pool of loyal customer.
Focused differentiation: This strategy is adopted for luxury brands which are targetted to
segmented group. In addition to it due to promotional as well as strong distribution channel
customer prefer the product due to its high brand value. Hence, application of such strategy helps
the respective company to sustain their operations within geographical area for the long term.
Risky high margin: This is one of the most risky strategy as here business charges high
price of the product in comparison to their competitor without offering any additional benefit. If
the customer purchases the product then it will enhance the profit of company. On contrary if
customer find any other company is offering similar product at low prices then it can decrease
the profit of company. Herein, if respected company adopt such strategy then the profitability of
company will remain at stake based on the competitive pressure.
Monopoly pricing: Business who gets the advantage of monopoly prices gains huge
profit as there is no alternative of product due to which the bargaining power of customer as well

as supplier is less. Therefore, if selected organisation gets this benefit then they can set higher
prices of the product which are further being purchased by the consumer.
Loss of market share: At this state company set the middle range pricing strategy as well
as their product derive low value to the customer because of which it is considered as disaster or
ineffective strategy (McGee Dowling and Megginson, 2015). Therefore, if the customer find any
other company sell more desirable value and at similar prices then they will not take time to
switch the brand.
Therefore, among all the strategy Morrison company must adopt Hybrid strategy where
they can differentiated their retail store services among the competitors. Moreover, competitors
are into price wars due to which company can maintain low pricing strategy. Hence, it provide
additional benefit to the company.

CONCLUSION
From the above report it has been recommended that organisation must enhance their
internal strength and capability by applying various model such as McKinzie's 7s model as well
as SWOT analysis. This helps the organisation to gain a clear picture about the area where they
can enhance their strength to exploit opportunity and overcome threat as well as weakness of an
organisation. Along with that external factor must be analysed by the organisation though these
factor are not in control of an organisation but can help to formulate the effective strategy of an
organisation. Additionally, through porters five factor model or ansoff model can helps to direct
the procedure by which task can be conduced systematically. Therefore, the organisation must
consider both internal as well as external factor to gain competitive advantage over competitors.