Strategic Management Plan: Evaluating Growth Strategies for Morrisons

This report provides a comprehensive analysis of Morrisons' business strategy, focusing on its strategic management plan and growth strategies. It begins by evaluating the macro environment using PESTLE analysis, stakeholder analysis, and SWOT analysis to understand the external factors impacting Morrisons' operations. The report then assesses the internal environment and capabilities of the organization using resource-based view (RBV) models such as VRIO analysis and the McKinsey 7S framework. Porter's Five Forces model is applied to evaluate the competitive forces within the market. The analysis identifies Morrisons' strengths, weaknesses, opportunities, and threats, providing insights into its competitive position and potential for growth. The report concludes by discussing the application of various theories and models for strategic planning, highlighting key strategies for Morrisons to enhance its market share, improve service quality, and increase customer satisfaction.

BUSINESS
STRATEGY

Executive summary
The strategic management plan is the document describing the goals of organisation by
setting priorities and using the resources. It takes the actions to achieve goals. Business strategy
is a part of strategic management. The company should apply the various business strategies
according to the market trend and analysis the competition, the company should gin the market
knowledge in respect to customer needs and requirements. The various strategies involve SWOT
analysis, PESTEL analysis, VRIO model generic porter’s strategies etc. all this provides the
information regarding the market and company position and help to compete with the
competitors. Morrisons focus on expansion of market share by entering in new markets. It provides
improved service quality for enhancing consumer choice and enhances customer satisfaction and
loyalty by collaborating with more restaurants across the world. The plan is made on Morrisons and
evaluating the several growth strategies to enhance growth.

Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
P1 Analysing the impact of Macro Environment..............................................................1
P2 Analysis of internal environment and capabilities of organisation............................3
P3 Application of Porter's Five Forces to evaluate the competitive forces.....................6
PART B............................................................................................................................................7
P4 Application of theories, and models for strategic planning........................................7
CONCLUSION..............................................................................................................................11
References:.....................................................................................................................................12

INTRODUCTION
The business strategy is related to the aspect of planning which helps in achieving the
goals by making effective utilization of resources. The business strategy is the set of decisions or
course of actions which helps the person in achieving specific business objectives. It acts likes a
master plan of company management to secure a competitive position in the market carried on
operations (Benzidia, S and et.al., 2021). The study is being done on the Morrisons founded in
1899 by William Morrison which is the largest chain of super market in UK. It deals in the
product of food and drink, clothing, books, magazines and many more. In study impact of macro
environment, assessing the internal environment and capabilities of an organisation is being
covered. Further, Porter's five force model is evaluated in competitive forces and applying range
of theories or models to have an understanding of business strategy.
PART A
Introduction
The business strategy is the set of decisions or course of actions which helps the person in
achieving specific business objectives. It acts likes a master plan of company management to
secure a competitive position in the market carried on operations. In study impact of macro
environment, assessing the internal environment and capabilities of an organisation is being
covered of Morrisons. Further, Porter's five force model is evaluated in competitive forces to
gain the efficiency.
P1 Analysing the impact of Macro Environment.
It is defined as circumstances which exits in the economy related to aspects of internal
and external environment and the component of strategic planning involving PESTLE Analysis,
Stake holder Analysis and SWOT.
PESTLE Analysis
The tool is used by marketer for evaluating and observing macro-forces putting impact on
organisation.
 Political factor- This is related to policy of government involving tax policy, tariffs,
trade restrictions affecting business. The Morrisons was affected with the change in
policies and regulations which created lot of uncertainty where the Brexit was the major
political event. Due to multiple government legislation, there was huge impact on
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Morrisons. It requires the political stability to carry out its business globally (Björkdahl,
J., 2020).
 Economic factor- It is concerned with the economy aspects including economic growth
rate, inflation, interest and exchange rate. The emerging of Brexit created major
fluctuations in currency and created inflationary pressure which affected Morrisons in its
growth. The inflation affects demand of Morrisons by increasing the prices which lowers
the level of brand loyalty.
 Social factor- This involves the society of cultural and demographic trend considering
factor of health consciousness, population growth rate, age distribution etc. The
Morrisons have business opportunities due to rising of age population. To attract the large
customers Morrisons can launch new brand positioning with TV Campaign (Cavaleri, S.
and Shabana, K., 2018).
 Technological factor- It is regarding the innovation which affects entire economy
comprising of automation, technological advancements factors. The Morrisons takes the
use of artificial intelligences to drive it sales & stack its stores. The technology
investment helps in reducing waste & makes business cost effective. The investment in
R&D will help in building self-sustaining ecosystem driving innovation.
 Legal factor- It defines the legal forces of an organisation involving governmental
bodies, laws & policies. The Morrisons is required to comply with all the legal laws such
as food safety and legal standards, securities law, health and safety laws etc.
 Environmental factor- This is aspect of ecological impacting on business related to
weather conditions, and climatic change. The Morrisons aims to remove carbon
emissions and reduce of poly boxes from supply chain. The Morrisons is required to
comply with waste management and recycle policies (Centobelli, P and et.al., 2020).
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Stakeholder Analysis
It is a technique of understanding, determining and prioritizing all stakeholders in
accordance to their power an interest over a business. It is an aspect of stakeholder management.
The main purpose is to identify those stakeholders who have involvement in business directly or
indirectly.
 High power, highly interested people- In this stakeholder of Morrisons have active
participation in business activities by holding high power which puts high influence on
people. The stakeholders are CEO or top management. It helps in making effective
decision and strategies.
 High power, less interested people- The stakeholder of Morrison have the power of
ruling business but having low interest regarding activities of business and having low
influence involving suppliers, investors. They help in providing necessary supplies to
meet the objectives (Daryousef, M., 2019).
 Low power, high interested people- The power of Morrisons stakeholder is low bu5t
having high influence and interest in business operations which consider employees,
leaders. Their performance helps in accomplishing business objectives by utilising
resources efficiently.
 Low power, less interested people- The stakeholders have low power and interest in the
operations of business which are labour (Epure, M. ed., 2018).
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SWOT Analysis
It is an framework used for evaluating the company competitive position by developing
strategic planning. It helps in assessing internal and external factors with the current and future
potential.
 Strength- The Morrisons have the efficient supply chain & distribution network. It has
the strength of offering large product portfolio to customers such as food, clothing etc. it
has 500 stores in UK with the employee strength of 130,000. The facility of online
retailing and shopping increased the business sales and brand loyalty.
 Weakness- The weakness for Morrisons is it has limited geographical reach in
comparison to other brands. It makes delay in adapting changes. The company have
weakness in marketing skills and weak brand image in comparison to others (Fayena, I.
and et.al., 2020).
 Opportunities- To meet the demand of customers the Morrisons has the opportunity of
tapping into organic products due to growing market. It has the opportunity of
international expansion boosting the sales and overall business.
 Threats- The increase in competitors market share affects profit margin of Morrisons. It
also faces the threat from increase in taxes or change in Government policies. The rise in
competition from competitors is a threat for Morrisons (Horne, M.S., Williamson Jr, T.S.
and Herman, A., 2018).
From above it can be said that assessing the macro environment of PESTEL, Stakeholder
analysis and SWOT analysis helped the Morrisons in knowing the factors which can impact on
its business operations. The company can manage the policies and have the opportunity of
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technology advancement which will help in attracting large customer base, increasing sales and
productivity.
P2 Analysis of internal environment and capabilities of organisation.
It is related to the elements of business structure which is defines relationship and
activities that are carried inside business. The internal analysis helps in knowing the company
resources, competencies and competitiveness which helps in making better decision and growth
of Morrisons by developing and implementing strategies (Kaliappen, N. and Hilman, H., 2017).
The Resources based strategy is a managerial framework of organisation by which strategic
resources are determined to have the competitive edge. The organisation assets, capabilities &
competencies are identified by focusing on the internal resources. The use of RBV model helped
Morrisons in fulfilling new opportunities through existing resources by using innovatively. It
includes the framework of VRIO Analysis, and McKinsey framework.
VRIO Analysis
To evaluate the company resources, it is used as analytical technique through which
company can ascertain resources and capabilities to have competitive advantage. The Morrisons
uses to examine the internal resources.
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 Valuable- In these resources are considered valuable when the firm attains sustainable
competitive advantage. The financial resources are considered to be valuable for Morrisons
helping in investing external opportunities. The employees for the Morrisons are valuable
as they ate highly trained leading productive outcome for organisation. The distribution
network is also considered valuable by providing products to every outlet & helps in
reaching more customers (Kompalla, A. and et.al., 2017).
 Rare- There are some resources which are considered as rare as only few firms can acquire.
The strong financial resource is founded to rare in Morrisons as it can be possessed by the
few companies. The Morrisons employees are rare as they are highly skilled and trained in
comparison to other firms. The distribution network is also rare for Morrisons as
competitors needs lots of investment to have a better distribution network.
 Imitable- It provides the company a first mover advantage but the competitors try to
imitate their resources. The valuable and rare resources help in strategies that other
company cannot pursue. The financial resource is costly to imitate of Morrisons because
competitors would also require the similar profits for accumulating number of financial
resources. The patents are challenging to imitate of Morrisons because it does not allow
legally to imitate an patented product (Oguji, N. and Owusu, R.A., 2021).
 Organisation- To have the competitive advantage the company itself is required to
organise resources to exploit advantage and derive value. The resources of Morrisons are
organised in efficient way which helps in capturing the market share and value. The
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financial resources, distribution network is organised effectively which helps in attracting
large customer base and sustains the competitive advantage.
McKinsey framework
It is a model of organisational effectiveness which postulates the organisation internal
factors that necessarily to be aligned and strengthened to facilitates success. It is a mixture of
hard and soft skills which are influenced by corporate culture and management. It is a structure
of 7S.
 Structure- The company structure of Morrisons is made with hierarchy, chain of
command, which describes interconnection and functioning of business operations. It
forms the organisational chart to have the accountability relationship (Saskara, I.A.N. and
Marhaeni, A.A.I.N., 2017).
 Strategy- It is related to plan that organisation develops to being competitive in market
and long-term strategy is established by communicating organisation goals and
objectives. The Morrisons follows the cost leadership strategy to have the market share.
 Skill- This consists of organisation staff and management capabilities and talents which
assess achievements and working that company can accomplish. The Morrisons render
training to their employees to develop more skills to cope with challenges.
 System- It is related to the company daily procedures, workflow, and decisions which
helps in making standard operations. It has broad range of system for sustaining
operations and works in the systematic way (Schaefer, J.W., 2018).
 Style- It defines the approaches that management takes to lead the company, influencing
performance, productivity and culture of corporate. The Morrisons adopts the effective
management and leadership style to motivate the employees for improving performance.
 Staff- It is associated with personnel of company that are trained and motivated to
accomplish the task. Specific strategies are followed by the staff members for improving
the level of productivity and efficiency.
 Shared values- These are related to the standards and norms of company influencing
behaviour of entire staff and management. The main aspects of Morrisons are aligned to
maintain the organisational design effectiveness (Schaltegger, S. and Wagner, M. eds.,
2017).
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From above it can be said, that analysis of VRIO frame work helps the Morrisons in
knowing the resources that are valuable or rare and imitable or organised which helps in gaining
growth by using the resources in efficient way. The framework of McKinsey comprises of 7S
which help the company in knowing their potential of capabilities and competitiveness.
P3 Application of Porter's Five Forces to evaluate the competitive forces
This model helps in identifying and evaluating the competitive forces of a firm to know
their strength and weakness. It helps in knowing the level of competition and increases the long-
term profitability.
 Threat of new entrant- The emerging of new entrant will increase the competition level
and brings additional capacity. The new entrant brings the innovation which forces
Morrisons to lower pricing strategy, cost reducing and offers new value propositions to
customers. To tackle this threat the Morrisons can innovate new products and services to
attract more customers and to differentiate its product. It can create economies of scale by
lowering the prices (Stewart, and et.al., 2021).
 Bargaining power of suppliers- The power of supplier affects the overall profitability as
the company purchases raw material from several suppliers. The suppliers having
dominant position decreases the margin of Morrisons. The power is low as there is less
control on the prices. The products are less differentiated and low switching cost which
makes weak power. To tackle this Morrisons can build efficient supply chain with
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multiple suppliers. It can also purchase raw material at low cost from suppliers or it can
switch suppliers.
 Bargaining power of buyers- The demanding of buyers is lot as they want to purchase
by paying minimum prices. The Morrisons faces pressures on the long run profitability.
The powerful customer base leads to high bargaining power and high ability of seeking
increasing discounts and offers (Björkdahl, J., 2020). To tackle this Morrisons can build
large customer base which will help in lowering power of buyer and provide opportunity
to increase sales and production process. The products can be innovated to seeks the
discounts for customers.
 Threat of substitute products and services- The profitability of Morrisons is suffered
when new product or service meets the demand of customers in similar way. The threat
can be high if offers value proposition which is different in unique way from present
offerings. The limited selection of differentiating factor makes challenging for consumers
to switch from the super branded products. To tackle this the Morrisons can increase the
switching cost for customers. It can offer quality products in contrasting to substitute
products.
 Competitive rivalry in market- The intense rivalry in Morrisons leads to down prices
and decreases overall profitability. The rivalry in the industry is high due to upsurge in
commodities of demand and supply (Cavaleri, S. and Shabana, K., 2018). The
competitors are Tesco, Sainsbury etc. To tackle this Morrisons is required to carry market
research for knowing supply-demand situation and it can centre on new consumers for
the commodities. With this it can also build sustainable differentiation and collaboration
with competitors to enhance the size of market.
From above it can be said that, the competitive forces provide the complete picture on the
profitability that impacts the Morrisons. It also benefited in analysing the competition. The
company faces internal pressure from the bargaining power of supplier and buyers and external
pressure from the competitive rivalry, substitute products and thereat of new entrant in market.
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