Business Strategy and Competitive Advantage: A Report on Morrisons

This report provides a detailed analysis of Morrisons' business strategy, utilizing frameworks such as PESTEL, VRIO, SWOT, and Porter's Five Forces to assess the company's macro and internal environments. The PESTEL analysis examines political, economic, social, technological, environmental, and legal factors impacting Morrisons. The VRIO framework evaluates Morrisons' resources like brand image, goodwill, customer base, and skilled employees. SWOT analysis identifies strengths, weaknesses, opportunities, and threats. Porter's Five Forces model analyzes the competitive intensity within the retail industry. The report concludes with an evaluation of the findings, emphasizing the importance of strategic decision-making for Morrisons to maintain a competitive edge. Desklib offers this report to aid students and provides access to a wide array of study tools, including past papers and solved assignments.

Business Strategy

INTRODUCTION
Business strategy refers to the application of certain strategies through which the
organizations can attain a strategic and competitive edge over the competitors in the market so
that they can ensure that they can enhance the overall level of profitability (Crowley, 2021).
Morrisons has been selected for this report. It is a British Company which provides different
types of products to the customers which are present in the market. In this report, focus will be
made on detailed and proper assessment of the Business Strategy for the particular purpose of
drawing out the different types of conclusions and recommendations which will be highly
helpful.
TASK 1
P1: Macro Environment
Macro Environment of an organization refers to the external factors which affect them
and therefore an organization is required to ensure that the identification of the influence which
is created by them should be done for taking appropriate and necessary actions (Demartini and
Taticchi, 2021). Therefore, it can be stated that this is quite important for a company like
Morrisons. In this way, it will be able to make progress in the future by attaining a strategic and
competitive edge in the market. For this purpose, it is crucial that the use of PESTEL analysis is
made in a right manner.
The application of PESTEL analysis can be made as follows-
PESTEL analysis-
It is an analysis that is done so that the overall impact which is created by the different
types of factors can be identified. The application of PESTEL analysis can be made as follows-
Political factors- It is crucial that these factors are assessed appropriately so that the best
decisions can be taken (Hasrat and Rosyadah, 2021). This is therefore quite important for an
organization like Morrisons.
Economic factors- For the organizations, it is highly important that it analyses the
economic situations in quite an appropriate manner (Ilhan, 2021). They will be able to identify
the way in which their impact is created so that the necessary actions can be taken for the
purpose of increasing the profits. This is necessary for Morrisons.
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Social factors- In the organizations, it is crucial to assess the social needs and
requirements so that the appropriate decisions can be taken. This can be helpful for a company
like Morrisons.
Technological factors- In the organizations, it is crucial to make sure that the use of
technology should be made. For a company like Morrisons, it is necessary to make sure that this
can be done for taking the right decisions.
Environmental factors- These factors are crucial and should be provided appropriate
consideration for managing the needs and requirements (Kabongo, 2020). This is especially
important for a company like Morrisons so that it can take important actions.
Legal factors- Every organization is required to identify the way in which the legal rules
and regulations are to be followed by it which will help it a lot in dealing with the legal needs
and requirements of the country in which it is present (Khan, Daddi and Iraldo, 2020). Thus,
Morrisons is required to make sure that it can consider the influence of these factors for taking
important decisions which will therefore help it a lot.
The use of PESTEL analysis is therefore quite essential and important to be made so that
the organizations are able to appropriately take the essential actions which will help in attaining
the goals and objectives.
M1: Critical analysis of Macro Environment
Macro Environment has to be analysed appropriately because it consists of the dynamic
forces which can create an impact on the decisions which are being taken by the company. Thus,
it can be stated that the organizations should be able to properly deal with the impact which is
created by it so that they can ensure that they can attain a strategic and competitive edge over the
various types of competitors which are present in the market. This will be quite useful for the
firms in determining the actions which are essential to be taken.
TASK 2
P2: Analysis of internal environment
Internal Environment refers to the internal situation of the organizations which has to be
assessed by them so that they are able to determine the course of action which is quite important
and necessary to be taken by them and will be highly helpful in attaining the future goals and
objectives (Kotusev and et.al., 2020). An organization like Morrisons has to make sure that a
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detailed analysis of internal environment can be done by it. For this purpose, the use of the
following models can be made-
VRIO analysis-
Resources Valuable Rare Inimitable Organized
Brand Image    
Goodwill   
Customer Base  
Skilled
Employees

Valuable Resources- Brand Image is a valuable because it is created after making a lot
of efforts. Goodwill is valuable because it has been created after providing a wide range of good
quality products to the customers in the market. Customer Base is valuable because it has been
made after ensuring a high-level of satisfaction of the customers in the market. Skilled
Employees are valuable because it is not easy to find such employees.
Rare Resources- Brand Image is rare because it is not easy to create a good brand image
in the market. Goodwill is rare because it is not easy to create it. Customer Base is rare because
not every company has a good customer base in the market. Skilled Employees are not rare
because they are present in every company.
Inimitable- Brand Image is inimitable because it is not easy to copy it. Goodwill is
inimitable because it also cannot be easily copied. Customer Base is not inimitable because other
companies too have it. Skilled Employees are not inimitable because other organizations can also
find them.
Organized- Brand Image is organized because it has been created after making efforts.
Goodwill is not organized because it can be impacted by the influence of certain type of factors.
Customer Base is not organized because the customers can shift to other companies also. Skilled
Employees are not organized because they can shift to other companies.
SWOT analysis-
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Strengths Weaknesses
 It has an efficient supply chain and
distribution network through which it
can target the different types of
customers in the market.
 It offers a large product portfolio to its
customers which includes food,
beverages, music, clothes etc.
 It is one of the big supermarket
companies in UK.
 It has associated itself with prominent
acquisitions in the past.
 Its geographical reach is limited as
compared to some of the brands in the
market.
 Certain issues related with the farmer
rights has created an impact on the
brand image of the company.
 It is not very good in the terms of
innovation which has created an impact
on it.
 It is not good in the terms of application
of its marketing strategies which is
therefore creating a high-level of
impact on it.
Opportunities Threats
 It has a growing market for organic
products which can be tapped by the
company.
 International Expansion of the stores of
the organization can help a lot in
boosting the overall business.
 The company can cater the rising
demand for private labels.
 Acquisition of smaller companies and
strategic partnerships can be quite
helpful for ensuring the growth of the
business.
 Increase in the market share of the
competitors can impact the margins of
the company.
 Increase in the taxes and change of
Government policies can also affect the
business of the company.
 Increase in the business by e-commerce
companies can impact the business of
its physical retail stores.
 Increase in the tax rates can lead
towards an increase in the expenses and
therefore can lead towards a reduction
in the overall profitability of the
company.
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M2: Critical evaluation of internal environment
Internal environment can be assessed through the use of strategic models. This is highly
necessary and therefore has to be done so that the conclusions and recommendations which are
useful should be followed. For an organization like Morrisons, it is therefore recommended that
it should make the use of the necessary strategies so that it is able to take better decisions. Thus,
for this purpose the overall internal analysis is required to be carried out in a detailed way which
will help it a lot in taking of important decisions highly effectively and efficiently.
TASK 3
P3: Porter's 5 forces
Porter's 5 forces is a model through which the organizations are able to properly and
appropriately take the important and crucial decisions (Krupskyi and Kuzmytska, 2020).
Morrisons should make sure that through making its use the goals and objectives in the future
can be attained by it. Through making its use, the firms like Morrisons can appropriately assess
the market situation can take an action accordingly so that they are able to make sure that they
can enhance the efficiency and effectiveness level in the future. Thus, it can be stated that the
organizations will be able to identify the different types of goals and objectives which can be
attained effectively and efficiently.
The analysis of these forces can be done by Morrisons in the following manner-
 Competition in the industry- This means the competition which is present (Lai and
et.al., 2021). Therefore, it can be stated that through the assessment of the competition it
can draw the conclusions and recommendations in a proper way. Morrisons operates in
the retail industry and therefore in this industry there is a high competition which affects
it a lot. Therefore, it can be stated that this affects the organizations and the decisions
which are taken by them. Therefore, it can be said that this force creates a high power for
the organization.
 Potential of new entrants- This means the potential of the new entrants in the market
can be identified so that right decisions can be taken which will be useful for the
managers (Lipsmeier and et.al., 2020). This is important for a company like Morrisons
which will help it a lot in taking of important decisions. This force creates a high-level of
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impact because the new players can enter into the market in this way and thus they can
create an influence on the prices of the products which are being provided and thus
profits of the company can be affected.
 Power of Suppliers- This refers to the power created by the suppliers in the market
which they have as they can ensure that they can control the prices of supplies which are
being provided by them in the market quite effectively and efficiently (Magerakis and
Tzelepis, 2020). This force creates a high-level of impact on Morrisons because the
suppliers can regulate the supplies which can thus affect the profits which the company is
earning.
 Power of Customers- This refers to the force which is created by the various types of
customers in the market (Mio, Panfilo and Blundo, 2020). This is so because the
customers are highly impacted by the prices which are set by the organization in the
market. In Morrisons, this force creates a high-level of impact because the demand of a
product can be increased or decreased by the customers in the market.
 Threat of Substitutes- This is the force which is created by the substitute products which
are present in the market (Musilová, 2020). This is so because the customers can have
preference for these particular products because they are cheaper in the terms of price.
This force creates a low-level of impact on Morrisons because its products are of high
quality and its customers will prefer to buy these products even if they are priced slightly
higher because of the quality which is offered by them.
Justification- 4 out of 5 forces create a high-level of impact on Morrisons and 1 force
creates a low-level of impact. Therefore, it can be stated that the company is required to make
sure that it can deal with the impact which is created by these forces so that the attainment of the
goals and objectives can be done by it in a proper and appropriate manner. This will help it to be
able to strategically deal with the competitors which are present in the market and thus in this
way it can attain a strategic edge over them which will help in attaining sustainable level of
growth in the future quite effectively and efficiently.
Importance of Porter's 5 forces model-
This model is important for the organizations because its use will be highly helpful for
them in ensuring that they are able to assess the impact which has been created by the influence
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of the different types of external factors in the market. The explanation of the importance of this
model can be made as follows-
 Assessment of the market- The assessment of the market can be done quite strategically
and tactically when the use of this particular model is made (Peng, 2020). This can be
done by identifying the way in which the products are to be launched so that the profits
are enhanced. It is therefore important for Morrisons that it is able to take the best
decisions in quite a proper and appropriate manner.
 Assessment of the impact of the forces- It is absolutely quite crucial that the assessment
of the impact of the forces can be made in a proper and appropriate manner (Pickett,
2020). The managers can determine the actions which are essential to be taken through
the use of this model which helps them in identifying the proper strategy which has to be
created by them for the purpose of attainment of the different types of goals and
objectives.
 Helps in Decision-Making- It is required that the managers are able to make the use of
this particular model so that they are able to take important and useful decisions (Tiawon
and Supartha, 2021). It is therefore necessary for Morrisons that it can make use of this
model to be able to attain the goals and objectives.
 Helps in making the strategic use of the resources- The managers in the organization
are required to ensure that the optimum use of the different types of resources can be
made (Verma and et.al., 2020). It is therefore required from the managers of the
organization that they are able to make sure that they can strategically determine the way
in which they can manage the different types of resources to make their best use.
 Drawing of Conclusions and Recommendations- It is necessary that the Conclusions
and Recommendations are drawn through the use of this particular model (Wang, Toseef
and Gong, 2021). Therefore, it is crucial that the various types of steps can be taken
which will help a lot in ensuring that the best decisions can be taken for the management
of the needs and requirements.
M3: Devising of appropriate strategies
This has to be carried out because in this way the company can make sure that it is able to
identify the specific needs and requirements through which it can attain the goals and objectives
in the future. Therefore, it can be stated that the management of Morrisons has to make sure that
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it is able to take the right and important decisions which will therefore help it a lot in managing
the different types of needs and requirements.
TASK 4
P4: Application of a range of theories, concepts and models
Strategic planning is an important concept and it is important that it should be given the
importance which is essential (Zhao and et.al., 2020). For an organization like Morrisons, it is
absolutely crucial as well as important that it should be given enough importance so that the
goals and objectives are attained. In this way, the organization will be able to make sure that the
application of the different types of strategies can be done which will help the organizations a lot
in attaining the goals and objectives.
Scenario- Morrisons is planning to introduce some new products in the market and
therefore it is making its focus on Innovation. It is essential to be carried out so that the
organization is able to make sure that it can take the right decisions which will therefore help it a
lot in attaining the goals and objectives in the future.
Strategic Plan
Particulars Details
Vision The Vision of Morrisons is to make sure that
the customers are provided with good-quality
products which can help them in enhancing the
value in the market.
Mission The Mission of Morrisons is to ensure that it is
able to provide the products and services to the
customers with the appropriate value.
Strategic Objectives  To enhance the overall market share
which will therefore help a lot in
ensuring that more customers can be
targeted and thus the products and
services can be provided to them as per
their different types of needs and
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requirements.
 To make sure that the increase in the
quality of the goods and services which
are being provided to the customers can
be made so that the management of the
needs and requirements can be made.
 To target the customers in the different
types of segments which is required to
make sure that these customers are able
to manage their needs and requirements
in a proper and appropriate manner.
 To make sure that the use of Innovation
can be made so that the customers are
provided some new products and
services which will help in enhancing
their overall level of satisfaction in a
proper and appropriate manner.
Strategies to be adopted  For enhancing the overall market share
it is required that the company is able to
identify the new segments in the market
which can be targeted so that the goals
and objectives can be attained.
 For improving the quality of products
and services it is desired that the right
methods and techniques can be adopted
for the particular purpose of bringing
the desired level of improvements
which are quite essential.
 For the targeting of the customers in
different segments it is desired that the
identification of the profitable segments
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