Strategic Analysis of Morrison Supermarket: Unit 32 Business Strategy

This report presents a comprehensive strategic analysis of Morrison Supermarket, a major UK-based supermarket chain. It begins with an introduction to business strategy and the context of Morrison within the UK retail market. Part A delves into an internal and external analysis, including a PESTLE analysis to assess the macro-environment, and a SWOT analysis to evaluate strengths, weaknesses, opportunities, and threats. The report further examines the competitive environment using Porter's Five Forces model to understand the competitive landscape. It identifies and justifies Morrison's existing and potential competitive advantages, followed by an outline of valid strategies and tactical objectives to achieve overall strategic goals. Part B critically evaluates strategic options, recommends growth platforms and strategies, and discusses methods for monitoring the chosen strategy's success. The report concludes with a summary of findings and recommendations. References are also provided.

ID
Unit Number and Title Unit 32 – Business
Strategy
4
April 20
Title Strategic
Management Plan
Statement of
Authenticity:
I certify that the work
submitted for this unit
is my own and the
research sources are
fully acknowledged.
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Table of Content
Introduction p
Part A: An internal and external analysis that provides a platform
for strategic decision making: p-
p
1. PESTLE and SWOT of the organisation and an evaluation of the
organisation’s resources and capabilities p
2. Competitive environment analysis using Porter’s Five Forces model
p
3. Identification and justification of the organisation’s existing and/or potential
competitive advantage p
4. Valid strategies and tactical objectives to achieve overall strategic
objectives p
Part B: On the basis of this analysis critically evaluate and justify
strategic options for the organisation: p-p
1. Critical evaluation of the different types of strategic directions available to
the organisation p
2. Justification and recommendation of the most appropriate growth platform/s
and strategies p
3. Evaluate ways and means by which the chosen strategy/ies can be
monitored in order to ensure success p
5.0 Conclusions p
References p
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Introduction
The business strategy refers to the strategic planning that assist to help and grow
the business in a proper manner and method (Ukko and et. al., 2019). In this process
the organization use to make different plans and goal which have to achieve by the
business in the market. There are different types of business strategies which help to
achieve the end goal of the company in effective manner. Morrison is one of the
largest chain of supermarket having fourth rank in the Britain having its main brand in
Braford, UK (Islam and Mamun, 2017). The company is offering healthy food products
in the market at affordable prices. They are having more than 494 stores all over in
UK and earning almost 17,536 million annually. This report will evaluate the internal
and external analysis of Morrison and its porter five forces knowing competitor
environment. Further identification and justification of competitive advantages are
explained with a strategies planning and tactical objectives. Moreover, the different
strategies directions are determined for the Morrison and recommendation is also
presented and ways of monitoring the success are discussed.
Part A: An internal and external analysis that provides a platform
for strategic decision making:
1. PESTLE and SWOT of the organisation and an evaluation of the
organisation’s resources and capabilities
Morrison is one of the largest chain in the supermarket of Britain having four poistion
in the market. There are number of different external and internal factor who are
affecting the company from different sides (Anand and Mantovani, 2021). PESTLE
analysis assist to know about the macro-environment as retailing sector is highly
influenced by the change in its extrinsic environment. So with the help of its external
environment analysis Morrison can find the best way to deal with and make effective
change.
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Political factors: The retail industry is highly influenced by the political factor of the
country because all the companies of retail have to follow the instruction which are
developed by the political party. In the Britain the main political change is caused
due to Britain exit from EU market it causes number of issues for the retailing
companies. With this there are different changes in the policies and rules for
operating in UK market (AKMAN, 2020). In the market of food retail the laws of
government are higher and multiple so Morrison is highly influenced in the Britain
market. According to the guidelines of government they have to change the functions
so that they can sustain in the market. By adopting to the change within the
organization they can grab the opportunity to present the brand in-front of
government in positive manner.
Economical factors: The food retailing companies of Britain are highly influenced
when the economy condition changes. As Britain economy after Brexit is being more
complex and organization have face issues of economy (Abdel-Basset, Mohamed and
Smarandache, 2018). The inflation rate is also being raised after the Brexit people are
not having disposable income to invest more on food supplements. Morrison is
offering high quality in the food products and the customers base of the company is
not having the income to buy the products after the higher rate of inflation in the
economy. This is a big threat for the company because I they are selling their
products in the market at higher price then their demand reduced immediately.
Social factors: As the society is also being totally changed people preference is
changing on regular basis, and they are buying the products as per their choice.
Retail industry influenced by this factor very much because when people change
their buying habit then retailing companies have to change al of its products. The
education and healthcare sector are more expanding in the UK market so people are
also engaging in having higher education, so they are investing their income over
their. When the Morrison will produce its goods as per the UK people then their sale
will automatically enhance.
Technological factors: In any industry technology is becoming the main element
which assist to impact the business very much (Simões, 2020). Every organization to
gain competitive advantage need to change and modify its technologies on regular
basis. If the Morrison will not use innovative technologies then their wastage can not
be minimized and customers are also not attract with the brand. In the current
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market digital technologies are expanded in the market so Morrison also need to
change its selling and promoting style to digital manner to gain competitive
advantages in the market. This is one of the best opportunity for the company to
compete in the international market. When the technology upgraded in the market
and Morrison changes its technologies accordingly then they will grab more
customer’s in the existing and new market.
Legal factors: there are number of laws which are made by the government for the
retailing sectors so the organization in the retail sector need to follow all of these
laws. Morrison have to undertake the safety laws for the food and laws of integrity to
check the products are good and there is no illegal practises are being done (Grassi
and Vallati, 2019). This laws are also changed so Morrison need to change the
policies of its organization keeping in mind the legal laws. By following all the rules
and laws Morrison can grab the opportunity to become more effective in dynamic
environment.
Environment factors: The area where the business practises are done is also being
influencing the company with different directions. When the climate condition
changes then company have to change their process of production and distribution
in the market place. They have to reduce the emission of carbon so that they can
able to sustain in the market for long-term. When any change take place in
environment where morrison operate then it can be bigger threat for the organization
and its functions as well.
SWOT analysis
The SWOT analysis of Morrison assist to know about the strength, weaknesses,
opportunity and threats. Morrison is one of the largest chain of supermarket in food
product over market of UK.
Strength: Morrison is having effective food and beverage production skill which they
used to produce, and they are having a strong and more efficient distribution network
by which they can easily reach to their targeted people. Their supply chain is also
very wider (Pesce and et. al., 2018). They are also having my-view feature and more
card programmes for the existing and the new customers of Morrison. They are
having large number of products which are being offered to the customers and also
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operating in customized food products range. The company always make use of
innovative marketing approach in the market, and they avoid middle man while
distributing their products. They are also trained the employees and academics
manner through which they are regularly improving their services.
Weaknesses: Morrison is not yet cover the global market they are operating in only
limited market and having limited market presence. When there is change in external
environment then they are not able to take immediate actions for that change and
lack behind in the market (Shatskaya, Komaristaya and Kafian, 2017). The customer of
Morrison are less loyal they use to change their product brand at any time when they
feel the Morrison is not offering the right products according to them. The customers
are having less positive image of Morrison in their mind because they feel there are
more brands better than this in market. Morrison is having less online presence only
limited products are available online. Their employee turnover is also high and
overall they are having less revenue in the market.
Opportunities: the Morrison is the international brand, yet they are not able to
expand its business internationally so it is opportunity for the Morrison to expand
globally (Wee, 2017). Morrison need to expand internationally to become the leading
brand in the market. They also sell its products more through online market and
provide related discount to attract more and more customers towards the brand.
They also enter the non-food retailing sector so that they can offer large variety off
products in the market. In the COVID-19 pandemic situation people preferring online
buying of all type of products so by providing the goods and services to them at
affordable price can help to attract more customers. They can also sale their
products in third party applications which use to supply the products internationally.
Threats: The retailing sectors is having more risk than any other sector or field and
Morrison also exist in retailing. The rules and regulation are regularly changing so
the company have to follow them and if they are not able to do then Morrison not
able to sustain in the market. Further the competition is also enhanced in the market
as new and new companies are entering the market and trying to the best so this is
one of the biggest threat for Morrison. The online retailing is become the threat for
Morrison’s because there are large number of people who are not using internet.
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2. Competitive environment analysis using Porter’s Five Forces model
The analysis help to identify the competitive landscape of the retail industry
each forces in the model is present a strength that assist the strategic planner. The
structure of the industry uses to changed regularly as per the customers
preferences. The five forces of porter are as under:
Threat of new entrants (medium): The retail sector is a sector in which new
entrants are being very common and Morrison is one of the leading brand in the
retail sector of UK (Amara and Tiriveedhi, 2017). It is very difficult for any new entrant
to come and compete with Morrison in the market. Basically new organizations are
coming in the market with price penetration strategies to gain maximum number of
profit, but they are not capable to have such a distribution network. The retail sector
is costly so anyone can not come to set up a new business in the market. As the
investment is higher as it require lots of research and development of the market
place. The licensing is also required to enter the new market so it is also berries of
the new entrant companies who are coming to compete.
Bargaining power of Supplier (low): Morrison is having number of suppliers in the
market in which they use to operate who are providing them raw materials. Which
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represent that the suppliers in the industry are having less power to control the
prices in the market. When the supplier use to reduce the margin of Morrison in the
market then they simply shift to some other supplier. The Morrison is also having
number of supplier who are providing raw material to the company therefore when
any one of them increase the pricing of the raw material then they immediately shift
to some other supplier.
Bargaining power of customers (medium): the retailing industry is very big and
having number of brands who are offering same level of products in the market. As
the food supplements companies are less in comparison of any other retailing
organization so the customers are having choices to buy their products from different
companies (Johannsdottir and McInerney, 2018). The Morrison products are being
unique so the customers of Morrison are feel difficult to find the alternative from the
market. The quality which is being provided by Morrison is being more unique and
high and they are also providing such quality at minimal price so bargaining power of
customers are also at medium level.
Threats of substitute products (lower): the Morrison is operating in the food
supplements in which substitute are being very less than compared to any other
industry. As the profit earning in this sector is low and there is no other such
substitute which can replace it. There are some substitutes, yet they are more
expensive than the products of Morrison, the company is offering its product at
affordable price then others.
Rivalry in existing firms (medium): there are favourable number of companies who
are operating in the industry in which Morrison is operating. From those number of
companies there are only few companies who are leading the market shares. The
products of the industry of Morrison are being differentiated from others in the
market. All the firms in these industries are trying to grab maximum number of
customer base with their unique products. Morrison is also offering unique type of
products at affordable prices to attract more customers .
3. Identification and justification of the organisation’s existing and/or potential
competitive advantage
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Morrison was just a stall when it was formed but the steady growth of the company
render it to develop to the level of giant supermarket today and not just a
supermarket only, but one of the player in the market giving high level of competition
to others and also maintaining their sustainability in such a competitive industry of
UK, as the UK’s supermarket industry is considered to be one of the highly
competitive sector in the world. The players in such a competitive market comprises
of Tesco, Asda, Sainsbury, Walmart, ALDI and now Amazon too after establishing
their operations on online platforms. Morrison is having great chain of distribution
which comprises of 500 stores across various locations of UK (Bramantyo and Asvial,
2019). The unique experience customers avail and the Morrison’s ability to provide
the same to its customer in it’s in – store facility is one the advantage that the
company is enjoying over its competitors. The customer service of Morrison is such
a great leading to higher customer satisfaction and retention which made it possible
for the company to stand out from the competition. Such a competitive advantage
that the company is enjoying is just due to the experts and experience staff who are
operating these stores and confronting customers on regular basis. They are highly
trained on how to behave with customers and tackle their grievances if they are
facing any such. This competitive advantage of the company can be justified through
the profitability and revenue the company is constantly generating from many years
(Ali and Anwar, 2021). There are many positive views of customers on websites and
social networks as well which is indicating company’s ability to satisfy its customers.
Another such advantage enjoyed by Morrison is its dedication towards
providing high quality and fresh products that is sourced locally to its huge client
base is a great differentiating particular which is allowing company to stand out from
competition and even good recognition in the market for such offerings.
The company is also able to produce quality products at a lower cost which
allows it to earn higher profits in the market by selling these products at a
competitive price. This benefit is accrued to the company due to their actions
towards establishing their own manufacturing factories resulting cost saving to a
great extent (Dina and Cahyandito, 2018). The company has even their transport
Lorries which distribute its fresh produce directly to its supermarket, and therefore
the company is able to establish itself as a cost leader in the supermarket industry
where it is able to compete with other players on the basis of its lower cost per
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product. Accordingly, Morrison is able to generate higher profits which is a factor
ensuring long term sustainability and survival of the company.
4. Valid strategies and tactical objectives to achieve overall strategic
objectives
After analysing Morrison from different frameworks and models a particular strategic
plan has been identified which can be used by Morrison (Ropianto and et. al., 2017). To
expand internationally and globally this plan is effective for the Morrison as
considering the values that company consider while providing products in the
market. The main values of Morrison are:
Quality of food supplements: To providing the best quality in the food products which
can enhance the health of the customers.
Satisfaction of customers: To satisfy customer by providing the high quality product
at affordable prices.
Easy shopping: To provide easy and healthy shopping experience which provide
everything in that industry.
Tangible objectives of Morrison
Specific: To enhance the sell as well as profitability of the company.
Measurable: To measure the profitability by analysis customer satisfaction and
attraction towards the organization.
Achievable: To achieve the higher profitability as Morrison operates internationally.
Realistic: To use the resource optimally to increase the profit of the company (Abdel-
Basset, Mohamed and Smarandache, 2018).
Time- bounded: To achieve the set goal by the end of 2021.
Tactical strategic plan/objectives:
 Morrison have to influence its targeted customers with the help of effective
promotional activities in the market. They can also tell about the uniqueness
and specification of the products they offer.
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 The international customer are been targeted to enhance the profitability as
per sell of the products.
 They also identify the aspect from which the company can compete in the
market place.
 With the help of its positive aspects and improving the weaknesses Morrison
can easily enhance its market share and profit as well.
 They should also look to the respective competitors who are affect the
profitability of the company.
Part B: On the basis of this analysis critically evaluate and justify
strategic options for the organisation:
1. Critical evaluation of the different types of strategic directions available to
the organisation
By conducting SWOT analysis, PESTLE analysis, analysis through Porter’s five
forces model and evaluation of competitive position of Morrison, there are many
strategic directions available for the company has been identified which would be
further explained with the help of Ansoff’s matrix model which is considered to be the
best model for evaluating various strategic directions available in terms of risks and
rewards associated with it (Bentley-Goode and et.al., 2019). The model consists of four
elements which helps in carrying out strategic analysis from various different
aspects. These four elements will be explained in detail in the following section of
this report. The matrix is a very well model used by management in framing
strategies while planning for future course of actions to obtain growth and
development in the company.
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