Strategic Analysis of Morrison Supermarkets: Unit 32 Business Strategy

Verified

Added on  2022/11/30

|21
|7059
|256
Report
AI Summary
This report provides a comprehensive analysis of Morrison Supermarkets' business strategy, focusing on both internal and external factors. It begins with a PESTLE and SWOT analysis to assess the macro-environment and the company's strengths, weaknesses, opportunities, and threats. Porter's Five Forces model is then used to analyze the competitive environment, followed by an identification and justification of Morrison's existing and potential competitive advantages. The report then explores various strategic options available to Morrison, critically evaluating different strategic directions and recommending the most appropriate growth platforms and strategies. Finally, it evaluates methods for monitoring the chosen strategies to ensure success, concluding with a summary of the key findings and recommendations. The report covers various aspects of business strategy, including market analysis, competitive advantage, and strategic planning.
Document Page
UNIT 32 - BUSINESS
STRATEGY
Table of Contents
tabler-icon-diamond-filled.svg

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Document Page
INTRODUCTION...........................................................................................................................3
Part A: An internal and external analysis that provides a platform for strategic decision making: 3
1. PESTLE and SWOT of the organisation and an evaluation of the organisation’s resources
and capabilities............................................................................................................................3
2. Competitive environment analysis using Porter’s Five Forces model....................................6
3. Identification and justification of the organisation’s existing and/or potential competitive
advantage.....................................................................................................................................8
4. Valid strategies and tactical objectives to achieve overall strategic objectives.......................9
Part B: On the basis of this analysis critically evaluate and justify strategic options for the
organisation:..................................................................................................................................10
1. Critical evaluation of the different types of strategic directions available to the organisation
...................................................................................................................................................10
2. Justification and recommendation of the most appropriate growth platform/s and strategies
...................................................................................................................................................13
3. Evaluate ways and means by which the chosen strategy/ies can be monitored in order to
ensure success............................................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16
Document Page
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.
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
Document Page
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 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
tabler-icon-diamond-filled.svg

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Document Page
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 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 (Haleem and Jehangir, 2017). They are also trained the employees and
academics manner through which they are regularly improving their services.
Document Page
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 (RASHID, 2020).
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 (Křupka, Kantorová and Haile, 2018). 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
(AlMarwani, 2020.). 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.
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 change regularly as per the customers preferences. The five forces of porter are as under:
Document Page
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 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.
tabler-icon-diamond-filled.svg

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Document Page
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
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
Document Page
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 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.
Document Page
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.
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
tabler-icon-diamond-filled.svg

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Document Page
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.
Ansoff’s matrix diagram
Figure 1: Ansoff's matrix
(Source: Dawes, 2018)
Market Penetration: This particular option can be used to grow and development in the market
where the company is already having its existence and also the growth strategies are formed for
the product in which the company is currently dealing with (Saldanha, 2019). This can be done
through increasing market share to gain leadership in the market by utilising competitive
advantage to create awareness among the existing customers. This strategy of growth is
considered to be quite less risky as the company has enough knowledge of the market and also
there is no need to make any form additional investment for the purpose of advertisements and
Document Page
research and development (Martí 2017). Morrison has a strength of producing its food and
beverage segment products in an efficient and effective manner which can be utilised by the
company for growing in the existing market with the existing range of products. The strategic
direction available with regards to penetrate in the market the company is existing and through
its existing products is that it can lower its prices to attract more customers and higher market
share. Also, this strategy can be easily applied by Morrison as it is enjoying cost leadership in the
supermarket industry, thus by lowering its profit margins by small amount, the company can
ensure high growth in the future. The strategy of market penetration is helpful for Morrison in
enhancing their brand visibility and market share and the same can be ensured through
establishing conventional stores rather than supermarkets by Morrison. This strategy will help
Morrison in overcoming the barriers of demographic nature and accordingly Morrison will get
higher position in the market through enhanced market share.
Market development: The growth strategy to move into the new markets with the existing
products itself is what comes under market development. The strategy requires the management
to find another segment to make their product available to them either in another country or in
UK itself (Chi and et.al., 2018). This particular strategy is considered to be more risky for
companies as there is no or very less knowledge available with regards to the new market they
are planning to enter. Here, Morrison has a strategic direction towards developing its market
approach of entering into global market where due to its lower cost and higher profit margin can
ensure future growth. It can enter with its product by investing and expanding its operations to
new markets like other European countries, Asian countries and America for going global (Dina
and Cahyandito, 2018). The company can do so in a successful manner by conducting research
about the local market of these countries and need to establish good relationships with these local
suppliers and retailers in order to gain better and deep insight about the market demand and
competitor’s strategy. Morrison should utilize this strategy towards international branding with
the help of joining hands through forming joint ventures which leads to international presence of
the company and accordingly there will be increment in the Morrison’s market share and
revenue.
chevron_up_icon
1 out of 21
circle_padding
hide_on_mobile
zoom_out_icon
[object Object]