Business Environment Analysis: Morrisons' PESTLE & Five Forces

This assignment provides an analysis of Morrisons' business environment using the PESTLE framework and Porter's Five Forces model. The PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors affecting Morrisons, with a focus on the impact of Brexit and technological innovations like AI. The Porter's Five Forces model assesses the competitive intensity of the retail industry, considering the threat of new entrants, substitute products, and the bargaining power of buyers and suppliers. The report highlights Morrisons' strategies for mitigating these threats, such as innovating new products, enhancing customer service, and increasing switching costs to retain customers. The analysis concludes by emphasizing the importance of understanding the business environment for strategic decision-making and maintaining a competitive edge.

PESTLE Analysis and Porter's Five Forces Model Of
Morrisons

Table of Contents
1. Meaning of Business environment
2. PESTLE Analysis
3. Porter’s Five Force of Model

Meaning of Business Environment
Business Environment refers to internal or
external forces with an effect on functioning
either in a positive or negative way. It can also
affect the business to the extent that there may be
a need to change the functioning of entire
business.

PESTLE Analysis
•Political – In this we consider how changes in the government
policy effect the performance of the company. Morrisons will be
affected by political stability, corruption, etc. Brexit is one of
them which become trade barrier. There are various rules for
retailers in UK which affect the company trade. Also, company
has to research about laws of other countries where they can
expand their business.

Cont….
•Technological – It considers the innovation in the industry
while including the new technology which helps the
business. Morrison use AI in their stores which help them
to maintain stocks to fulfil need of the consumer. The
company made various investment in technologies which
helps in reducing waste efforts as well as cost which make
business efficient.

Porters Five Forces Model
•Potential Threats of New entrants into the Industry – New
entry can also affect the position of company in view of
customers. Morrisons innovate new products to eliminate
the threat of new entrants. The innovative products
increase the revenue by bringing more customers. For
innovating products they are investing more in R&D
Department to ensure they build customer relationship.

Cont….
•Threat of Substitute Products – Substitute goods
are those which can replace the company goods.
Morrisons are becoming service oriented so that
the threat of substitute will decrease. Morrison is
understanding the needs of the customers so that
Morrisons can cater to their needs before others.
Company also increased the switching cost which
will retain the customers to their brand.

References
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and changing
business environment. Available at SSRN 3192207.
Mugo, P., 2020. Porter’s five forces influence on competitive advantage in telecommunication
industry in Kenya. European Journal of Business and Strategic Management. 5(2). pp.30-49.
Alanzi, S., 2018. PESTLE Analysis. Project Management.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4). pp.54-61.