Competitive Analysis of Morrisons in the UK Retail Market

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BUSINESS STRATEGY

TABLE OF CONTENTS
Introduction..................................................................................................................................................1
Task 1...........................................................................................................................................................2
a) Define business strategy......................................................................................................................2
b) Analyse the impact PESTLE influence on the organisation...............................................................2
c) Conduct stakeholder’s analysis for the organisation...........................................................................4
Task 2...........................................................................................................................................................6
a) Analysing the strategic capabilities using the VRIN/VRIO framework.............................................6
b) Conducting a SWOT analysis for the organisation.............................................................................7
Task 3...........................................................................................................................................................9
a) Evaluate the competitive forces within the organisation’s sector using Porter’s Five Forces model. 9
Task 4.........................................................................................................................................................11
Suggest plausible strategic directions available to the organisation using Porter’s Generic Strategy or
Bowman’s strategic clock as a framework............................................................................................11
Conclusion.................................................................................................................................................14
References..................................................................................................................................................15

LIST OF TABLES
Table 1: Stakeholder analysis......................................................................................................................4
Table 2: Strategic management plan..........................................................................................................12

Introduction
In the competitive environment, the strategies are very important to the business as it supports in
meeting the customer and business objectives. In the present report, the study will take the case study of
Morrisons for having understanding on business strategy. The impact and influence of the macro
environment will be explained in the report along with considering the internal capabilities including
SWOT analysis. Porter’s five force model will be explained in detailed for knowing the firm
competitiveness. Various concepts, models, theories and strategic plan will also be presented in the end
to give strategic direction to Morrisons.
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Task 1
a) Define business strategy
The strategy of business is taken as the direction or the action that helps the managers for getting the
objectives of the business. It refers to the main plan that assists the firm for managing the resource use
for meeting the market and competitive edge. The firm creates the strategy of business for carrying out
the appropriate planning in order to meet the high chances of opportunity in the business, facing
challenges and threats, achieving the growth in market and resource mobilization. The business strategy
is relied on mission, vision, structure and purposes of the firm so as to have appropriate actions for
meeting final objectives (Nickols, 2016). The discussion will be conducted on the business Morrison’s
including mission, objectives and vision of the firm:-
Mission of Morrisons: The mission is to offer the customers the superior value for the money they are
paying on the shopping, wherever they are living. In short it is ‘The very best for less’.
Vision of Morrisons: The vision is to get the trust retailers so as to recruit the individual who love to
serve the services.
Morrison’s objective: Morrison’s purpose is to choose the strategy that supports in meeting the functions
of the business and operations for getting business vision and mission (Lacoste, 2016). The purpose is to
consider the digital marketing and strategies of pricing.
b) Analyse the impact PESTLE influence on the organisation
Morrison’s introduction
Morrison’s supermarket plc is the fourth biggest chain of supermarkets in UK and it’s headquarter is in
England. The founder of the supermarket chain is William Morrison and comes in retail category. The
organization products are clothing, CDs and DVDs, food and drink, magazines and books. It has 498
stores and it is around 120 years old. It is the big organization as it has large number of workforce of
around 1, 10,000 and the organization is presented on London Stock Exchange and is part of FTSE 100
Index of Companies and around 10% of the shares of the organization is owned by the family.
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The objective, mission and vision of the organization are already discussed above that supports the firm
and its team to meet the useful and suitable strategies of business. Furthermore, external factors at few
times will impact the strategies of business of Morrison’s; therefore it is significant for the team of
management to assess the factors that influence the strategies of business (Perera, 2017).
Political factors: This factor influences the organization operations greatly. The main impact of Brexit
has been seen on the Morrison as the major political event. There were seen lots of fluctuations in the
policies and regulations of the business. The second thing impacts the most Morrisons is multiple UK
government legislations for the food retailers. The mentioned two factors have influenced the business
functions in UK.
Economical factors: The factor is also related with the Brexit that causes the important fluctuations in
the prices of the goods and placed the pressures inflationary on the business of Morrison (Morrisons
Pestle analysis, 2018). The next thing to be considered is the oil price increase in several household
budgets and by this their purchasing power will be highly reduced.
Social factors: This factor relates to the living standard of the people in the society. The various business
opportunities are presented because of rising population age. The trend has been increasing continuously
for having different varieties of products in supermarket. The next thing to be considered is increasing
the importance of education and health of the customers around UK.
Technological factors: The technological investment has supported the lowering down the waste cost
and initiatives by taking the business more usefully and customer responsiveness is also increased. The
trend of digitalization has also been considered with the application of digital data for informing the
business to determine the trends and will be served better to the customers. The consistent target on
development and research to develop the software and systems in-house is also been taken.
Legal factors: The factors such as food safety and legal standards comply with the FSA targets on
campylobacter levels have to be considered by the organization (Oraman et.al. 2018). On this Morrisons
has legal laws and policies guidance to assist compliance with various regulations. In this context, 1000
trade audits ethically were taken by Morrisons in 2016 to assure integrity.
Environmental factors: The operational carbon emissions were lowered down by Morrisons from 30%
to 26.9% by 2025. The organization is focussing towards the reduction of use of poly in supply chain by
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introducing the return bins in case of products related to fish (Morrisons Pestle analysis, 2018). To
maintain the environment the organization has even directed the zero waste to the landfill in the sites of
manufacturing. All this steps has supported the Morrisons to increase their market share.
c) Conduct stakeholder’s analysis for the organisation
In this the main stakeholders are HR manager, operational manager; marketing manager, finance
manager and administration staff. The analysis will be shown in the table:-
Table 1: Stakeholder analysis
Stakeholder’s Major
requirements
Influence Stakeholder’s
expectations
Risk Stakeholder
management
strategy
Who has
duty
HR manager Managing the
resources of
the
organization
especially
human
resource
(Grant, 2016)
High Effective
correct line in
the study that
places the
positive
outcome
Not clear
objectives
Group
discussions,
direct
communication
, individual
meetings
The project
manager has
duty
Operational
manager
The major
requirements
for meeting
the business
operations to
manage the
sustainability
High Proper use of
procedure and
gather
relevant and
accurate data
to have
suitable
strategy
Not correct
use of
technique
Interview and
meetings
strategy
The duty is
conducted
by duty
collector
Finance
manager
The main
requirement is
to manage the
funds of every
department in
order to make
Medium They expect
that the funds
are used
properly in
order to have
more return
Project
failure
Proper
investment
portfolio
strategy
Financer has
the duty to
coordinate
with other
departments.
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proper
investment
on their
investment.
Marketing
manager
Understanding
the needs of
marketing and
resource
management
for branding
and
advertisement
Moderate Social
networking
for high
promotions of
products
Low research
in market and
expectation
of customer
(Andriof and
Waddock,
2017)
Discussions,
meetings and
email
Market
researcher
Administratio
n staff
Identifies the
risk and
problems
Low Ensuring
quality
outcome
Improper
responsibility
in analysis of
problem
Through
reports
Evaluator
has duty
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Task 2
a) Analysing the strategic capabilities using the VRIN/VRIO framework
The strategies are impacted through internal potentials and resource availability in the firm as it will help
the leaders and managers to take appropriate decision making. The consideration on the management
style, culture and different approaches are the major internal capabilities of Morrisons. The firm
strategic potentials are examined by use of VRIO model as this model will concentration on rare,
valuable, organized and imitable resources that are presented in business (Aithal, 2016). In Morrisons,
the resource availability will reflect the internal potentials that help the strategy of business
implementation and selection.
VRIO model or framework in the context of Morrisons
The organization assures that the resources are valuable for meeting the edge over the competitors. In
Morrisons the valuable resources are the main employees that supports in implementing the strategic
planning according to the vision, mission and objectives set to meet the competitive edge. The resources
which are rare in firm offers greater power level to implement plan usefully. In Morrisons, rare
resources supports in gap analysis among the actual and standard status by which they will get the idea
for modification in strategies. Through the presence of rare resources helps the Morrisons to low down
or manage the cost of production and raise the quality of the product so as to have more advantages. The
organization can manage the risk in the market if they have rare and valuable resources but for meeting
the objective of the business the requirement of more imitable resources is needed in order to meet the
competitive issues (Rockwell, 2019). Managing the resources supports in organizing and performance
sustainability to manage the position in the market through effective management and resources usage.
Effectiveness of VRIO model in Morrisons
The use of VRIO model will help the managers and leaders to consider the quality decision making
related to strategies of business. The model will help the firm and its team to assess the organization
internal potentials that further impacts the business strategies for meeting competitive advantages
(Dondjio and Haafst, 2017). VRIO analysis relied on examining the Morrisons resource availability by
which managers can gather the resources for meeting the business objectives.
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b) Conducting a SWOT analysis for the organisation
The model of SWOT is used for examining the internal strengths and weaknesses together with the
suitable threats and opportunities presented in the market. From SWOT analysis, it is simple for the
managers to apply their possessed strength to face the weaknesses and business threats and to have
proper opportunities that can give enhanced profits and productivity. The below presented is the SWOT
analysis of Morrisons:-
Strengths: As the Morrisons are the supermarket it has intense food making skills with having stronger
distribution network. The organization has strong supply chain therefore the products are distributed on
time. The firm has dedicated customer orientation in which use of my view option and more card
programme is done. This shows that the organization is focussed toward the customer services more to
increase more profits and sales of the business (Morrisons SWOT analysis, 2018). The last strength of
the organization is that it has large product portfolio and customization in sales. The organization is
offering the products for meeting the needs at any cost.
Weaknesses: Morrison’s main weaknesses are that it has limited presence across the geographical
boundaries and does not have strong online presence as well. The organization response toward the
demand of the customers is also very low that shows firm is not taking care about the customer
satisfaction at the foremost priority (Phadermrod et.al. 2019). The firm has lower recall of the customer
for the product that means customers are not interested to make the revisit for purchase. The
organization also has weak programme for customer loyalty that means customer retention is less
focussed.
Opportunities: The business has numerous opportunities for the organization. Morrisons can establish
their global presence in the market by being the modern grocery retailer across UK. The next
opportunity is to have convenience; proper online channel and discount channel are growing faster in
United Kingdom (Morrisons SWOT analysis, 2018). The organization can even bring new product line
like non food retailing in UK to raise the market share appropriately.
Threats: The main threats of the organization are related to change in policies and regulations due to
Brexit taking place is Britain. The competition is rising continuously and price war is also increasing
due to homogeneity in the products. The last threat relates to the rise of technological risks leading to
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requirement of more investments. Environmental depletion is also the cause of threat to the business of
supermarkets.
Overall analysis of SWOT of Morrisons
From the above mentioned analysis, it can be determined that the proper use of strengths can lowered
down the weaknesses of the organization. The correct opportunities use can be done to eliminate the
market threat. On the given analysis, the firm can make proper use of strategies of marketing for
attracting numerous customers through showing their proper online presence in order to increase the
profits of the business. The product quality will increase the loyalty and trust of the customers towards
the products of the business (Sarsby, 2016).
On the analysis, the opportunities of globalization to show global presence are also very much necessary
for the business to meet competitive benefits. The awareness for the brand can be maintained through
establishing new outlets in famous locations of UK. For lowering down the threats and weaknesses of
the business, the firm can give training to the employees to have customer recall. The skills and
capabilities of the employees can be increased so as to achieve the benefits in competition and getting
the requirements in market.
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Task 3
a) Evaluate the competitive forces within the organisation’s sector using Porter’s Five Forces model
The five force analysis is used in the organization context to assess the competitive factors that might
develop the positive or negative influence on the present approaches of business. Morrisons
management team will conduct the strategic decisions relied on competitive examination. Meeting the
competitive edge is the core purpose of Morrisons, and on this, they require investigating the market
competitiveness along with the strategies of competition. The below shown is the Porter’s five force
model:-
Competitive rivalry: The retail market of the UK is highly competitive and is oligopoly in character. The
organizations like Tesco, Sainsbury’s, ASDA and Morrisons has already occupied the major share. The
market leader is the Tesco has 30.7% share of market, after that ASDA with 17.6% and Morrisons is on
the 4th position with having the market share of 11.9%. The ASDA and Tesco has mainly 50% share of
market because of their size and both are international organization who carries business globally. There
is high rivalry threat for the Morrisons.
New entry threat: The new global organizations has occupied and entered into the market and act as the
penetrators in the retail UK market (Harding, 2017). Like ASDA is operated through American country
and the organization like Lidl has also introduced various outlets across UK. On the other side, there are
maximum internal competitions; the cooperative plans explore their business by opening new stores to
get the share in market. Morrisons has high threat from new entry in the UK market.
Buyer’s power: The consumer will take the price comparison with other chains of supermarket as it is
easy to move to other organization and buyers will always consider for the value. Organization has the
price strategy to put the low prices and make the customer satisfied. The different types of products are
given at good deals like special offer like half price, reduce to clear, buy one get one likewise. In this,
organization has medium buying power.
Substitution threat: In present, franchised and individual grocery can be very challenging as it
convenience to the local purchaser. The firm owns the branded products for other substitution products
because of low price various products are offered at less quality. For example: Morrisons has made
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