HND Business Environment Analysis: Morrisons Supermarket in the UK

This report provides a detailed analysis of the business environment of Morrisons, a major supermarket chain in the UK. It begins with an introduction to the business environment and its impact on companies, highlighting the importance of effective management of internal and external factors. The report then focuses on Morrisons, examining its objectives, culture, operations, and functions. A significant portion of the report is dedicated to a PESTLE analysis, evaluating the political, economic, social, technological, environmental, and legal factors affecting Morrisons' operations. Additionally, a SWOT analysis is conducted to assess the company's strengths, weaknesses, opportunities, and threats. The report also explores the relationship between different organizational functions, such as sales and marketing, human resources, research and development, and finance, and how they contribute to the overall performance of the company. Finally, the report examines the positive and negative impacts of the macro-environment on Morrisons and identifies the internal and external factors that influence its success. This analysis provides insights into Morrisons' strategic positioning within the UK supermarket industry and its ability to adapt to changing market conditions.

Business Environment

INTRODUCTION
Business environment is an effective combination of internal and external factors which
directly impact on the entire function of the company in both positive and negative manner. It
includes management, demand, supply, customers and so on. Thus, it is important for manager to
manage all these factors effectively to improve its performance level at market place (Business
and the environment, 2017). With the help of this, business organisation easily formulates
effective planning procedures to attain positive results in appropriate manner. Current report is
based on Morrisons, which is a larger supermarket in UK. They serve quality products and
services to its customers and made effective policies to expand their business. This project
discussed various major factors of company in macro environment such as objectives, culture,
operations and functions. Along with this, PESTLE and SWOT analysis is also mentioned which
helps in evaluating its actual performance at market place.
TASK 1
P1 Covered in PPT
P2 Covered in PPT
TASK 2
P3 Relationship between different organizational functions
In market place, business organisation wants to enhance their productivity level by
delivering quality services to large number of customers. In this context, Morrisons is the biggest
supermarket in UK in which they offer variety of products and service in over the world. Along
with this, they follow hierarchical structure in which manager easily understands about its staff
members’ responsibilities. By this, firm attain its set goals and objectives in minimum period of
time. In this, various functions are performed by every business organisation which is
interrelated with another. All these are understood by following points:
Sales and marketing: Every business organization have their marketing function in
which they improve their overall sales by serving quality services to its customers as per their
specific requirements. (Ahmed, Aamir and Ijaz, 2011). By this company can easily attain their
higher satisfaction level. Along with this, firm use various tools and techniques to enhance their
1

profitability level such as social platform, advertisements, print media and many more. All these
are contribute in enhancing company sale which helps in attaining profitability level of the
company at market place. Basically this factors is interrelate with research and development
section of the company because this will assist in determining customers needs and demand
towards company profits (Auzair, 2011). Furthermore, financial department is linked with this as
this allot enough fund for undertaking marketing research.
Human resource: This type of function is important for business organization which
helps in appointing suitable as well as capable candidates for specific job place within the
company. In this manager allocate work to its workers as per their skills and abilities which help
in attaining set goals and objectives in effective manner and appropriate time frame. Along with
this, manager also provide better training and development programs to workers in order to
enhance their knowledge which leads in increasing their performance level. Basically this sectors
is interrelate with finance department of the company because they provide appropriate funds to
manager for conducting better training and development activities so that they bring innovation
at workplace.
Research and development: This type of function play vital role in every activities of the
company. In this manager of Morrison's undertake an effective research to evaluate actual
demand of the customers. By this, organization create their strong customers base by providing
them higher satisfaction level. It also help company in attaining competitive advantage in
effective manner. Furthermore, company also use various methods such as questionnaire and
interview to gather relevant information towards the firm and its services. As per this department
is connected with finance section in which they allot enough funds to manager to under take an
effective marketing research which helps in increasing the profitability level of the company at
market place.
Finance: It is one of the more important for every business organization to attain its
target. In this budget is set by every section which follow by company to manage its activities in
proper manner. With the help of this, wastage get minimised and enhance its profitability level.
Effective financial statement helps in reducing unwanted expenses of company and enhance its
profitability level (Avramenko, 2012). This it connected with financial department which leads
in attaining competitive advantage at market place and create strong customers base.
2

Illustration 1: Organizational structure
(Source: Organizational Structure 2017)
Illustration 2: Organizational Function
(Source: Organizational Functions, 2017)
Organizational structure:
3

 Function based: Morrison's follow hierarchical structure which is related with various
capacities. It define whole section of the business that related with human asset,
generation and many more (Barnett and Salomon, 2012). All these helps in attaining
better results in effective way. Geography based: Under this, administration determines sections according to the
regions. With the help of this, firm can get many opportunities to easily recognize the
proof and request of all the customers who belong to different districts. In this Morrison's
easily grab their business task in effective manner and various nations. Product Based: This is related with the company items which offer to the customers as
pet their requirement. In context of Morrison's, they serve variety of products and
services to its customers in order to attain better results. By this firm enhance their
market share and increase their profitability level.
 Consumer based: Under this company defines authoritative structure which is based on
customers and their demands. By this, company easily satisfy customers needs and wants
in effective manner and create strong customers base.
TASK 3
P4 Positive and negative impact the macro environment
Administration of every kind of organisation require to conduct external analysis to
anticipate market opportunities and threats. For this PESTEL is effective tool which is used by
management of Morrisons to acknowledge various elements and their impact on business
operations. This concepts consists of Political, Economical, Social, Technological, Environment
and Legal factors. Through this tool superior encounter products and service that should be
delivered by company in respect to needs and wants of people. Besides this, management is able
to utilise resources efficiently and make system function effectively (Cheng, Yip and Yeung,
2012). This help Morrisons to enhance customer base and market position; which support
company to accomplish success and prosper within food segment with time.
Political factors: This includes elements such as taxation policies, trade and exchange
rules and regulations. It is necessary that administration consider this factors in respect to
country in which business is being operated, while designing system. Morrisons which has
4

established branch in United Kingdom require that management make alterations in objectives
and strategies in according to regulatory bodies (Demil and Lecocq, 2010). As government of
UK imposed tax and duty to regulate working of food sector. Executive require to make
modification in balance sheet through which they are able to impact on customer's relationship
with firm. So, this help company to make system function effectively and reduce unnecessary
mistakes. Besides this, management is able to improve market reputation and goodwill.
Economical factors: This includes components which consists negative influence on
buyers and this directly impact on conditions of country and on market . Income, inflation rate,
minimum wages rate, unskilled labour, unemployment and health crises are various factors
which impact on business activities. So, it is necessary that management considers these points
while using resources such as money, material and labour. In Morrisons, administration take care
that system function properly; through which firm deliver adequate products and services in
marketplace. Besides this, it is essential that firm regulate market sustainability through which
superior are able to create positive influence on people. But, organisation customer base lower
down; if tax rate increases which affect negatively on individuals.
Social factors: This element specifies that organisation should deliver variety of products
and services as per culture, taste and preference of people; and city in which business is operated.
Morrisons which has branch in Unite Kingdom, so management require to make offerings as per
needs and wants of public. For this, there are nearly 500 branches which deliver variety of items
for every division of society. This benefit company to enhance customer base and improve
market position. Besides this, as firm conducts corporate social responsibility in system; through
which they are able to take various benefits from government and enhance their goodwill in
marketplace.
Technological factors: This element specifies that management require to make
alterations and adopt new techniques in system, through which they are able to utilise resources
properly. In Morrisons, administration make modification and use advanced tools and
technologies in firm. This benefit company to keep record on quantity of items that are present in
outlets and products that are to be transported from warehouse to branch (Edquist, 2010). Thus,
firm is able to utilise funds appropriately and improve functionality of system.
5

Environmental factors: This component consists necessary part for every kind of
organisation. It is necessary that management uses resources properly, so that adequate products
are delivered to people (Halbert and Ingulli, 2011). Morrisons which is operating business in
food segment require to offer items as per customer's requirement. Superior prime goal is to take
care on quality and quantity of products is to be efficient.
Legal factors: This element specifies that administration require to make system function
as per rules and regulations of government. They should take care that unethical practices are not
being conducted. Morrisons firm undertake business activities properly and provide adequate
conditions to workforce. Besides this, management require to provide healthy working
environment to employees. So, workers will perform activities effectively and accomplish targets
timely. This benefit company to enhance market share and retain people for longer period.
TASK 4
P5 Internal and external analysis to identify strengths and weaknesses
Management conduct internal analysis to acknowledge strengths and weaknesses of
system. For this, SWOT analysis is effective tool which is used by them to ascertain system
capabilities; thereby use resources efficiently and deliver adequate products and services as per
needs and wants of people.
Strengths: Superior require to make system function in such manner that company is able
to grow and expand business in accordance to market conditions. This considers strength for firm
through which management is able to utilise resources properly and deliver adequate products
and services in marketplace. In Morrisons cooking process, strong distribution network and
hygienic environment are various factors which superior take care in system. Besides this, “More
card” and “My view” are various programmes which are use by company for orientation with
clients. This also benefit management to make system function effectively and compete with
rival firms (Hämäläinen, Näyhä and Pesonen, 2011). Company deliver variety of items, so this
benefit executive to generate adequate profit and grow business. Thus, Morrisons is able to
position itself at fourth largest supermarket food chain in UK.
Weaknesses: It is necessary that management require to enhance firm's growth, by
making business operate online. Morrisons doesn't use this concept, so this is shortage of system.
6

Besides this, company is not able to retain customers for longer period; as items are not prices
properly. Even people get poor convenience at store which affect on market image of firm. It is
necessary that management provide various coupons and offers to attract public from other
brands (Hilton and Platt, 2013).
Opportunities: It is necessary that management make modification in items and deliver
products as per taste and preference of people. In Morrisons, executive uses resources efficiently
and offer organic goods to buyers. This benefit company to attract health conscious customers
and enhance sales. As in recent time, online network is essential tool which can be used by
administration to enlarge business. Besides this, other opportunities include opening outlets in
local towns and improve quality of items. This benefit company to enhance customer base and
market position.
Threats: Company also faces various problems which affect on functionality of system.
It is necessary that management uses resources efficiently and deliver quality products to people.
Superior of Morrisons require to make take care of market conditions such as climatic changes in
respect to offer adequate products to people. They uses quality raw material and deliver healthy,
hygienic and organic items in marketplace. Besides this, management require to have connection
with suppliers and deal with price uncertainties. This help company to attract people and
compete with rival firms.
P6 Strengths and weaknesses interrelated with external macro factors
It can be assess that Swot and PESTLE are highly affect the entire performance of the
company. In addition of this, it also aid in achieving its predetermined goals and objectives in
allotted time frame. Because company strength and weakness are interrelate with external macro
factors. This can be understood by following factors: Political factors: This type of factor are highly impact in business performance. It
considered various policies and regulation that set by the legal authority. It is important
for company to follow it effectively to attaining better better results (Hoang and
Rothaermel, 2010). This will directly contribute in enhancing their productivity level by
attaining better results in appropriate way. Economical factors: It is also an effective and important factor which directly impact on
company performance and position at market place. For example, if economy condition is
7

weak then it negatively effect the customers income level which also reduce their
purchasing power. By this company reduce their profitability level. Social factors: It is also a vital factors for business because in this employees and
customers both are relate with external world (Jung, Kim and An, 2011). So that it is
important for business organization is to serve better services to both factors to enhance
their satisfaction level. Along with this, it also helps in creating positive mind set towards
the company goods and services which aid in attaining competitive advantage.
 Technological factors: It is played important role in company to implement innovation in
activities in order to produce quality services to its customers. With the help of this, firm
easily cater quality services to its customers as per their needs in order to attain their
positive response.
Apart from this, all these factors directly impact in Morrison's strengths and weakness
which can be understood by following points:
Strengths Weaknesses
 Strong relationship with customers and
suppliers is main strength of the
company.
 They has more then 500 stores in UK.
 The main weakness of company is
product recall.
 Limited geographical as compare to its
competitors.
Along with this, both SWOT and PESTLE are interrelate which aid in evaluating the
overall performance of the company at market place (Li and et. al., 2011). So that it is necessary
for manager of the company is to effectively assess its impact in order to improve their
performance level. By this company serve their quality services to its customers demand which
provide support them in creating strong customers base at market place.
CONCLUSION
As per above discussed assignment it has been summarised that, business environment is
larger affected by internal and external factors. Thus manager of company is responsible for
analysing positive and negative impact on its activities. Along with this, company also use
8

various tools and techniques in order to attain set target. By this firm enhance their productivity
level and capture larger market share from its rivals.
REFERENCES
Books and journals
9

10