Morrison's Strategic Management: External and Internal Analysis

This report provides a comprehensive strategic analysis of Morrison's, a major UK supermarket chain. It begins with an introduction to strategic management, highlighting its importance in achieving organizational goals. The report then delves into an examination of Morrison's external environment using PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors impacting the company. Porter's Five Forces are applied to evaluate the competitive landscape. Subsequently, the report conducts an internal analysis, exploring Morrison's mission, vision, objectives, and utilizing a SWOT analysis to identify its strengths, weaknesses, opportunities, and threats. The analysis aims to determine the company's strategic competencies and capabilities, ultimately informing its competitive position within the market.

STRATEGIC
MANAGEMENT

INTRODUCTION
Strategic management refers to the arrangement of the resources of organisation to
achieve goals and objectives. For this, it include developing objectives and determination of
competitive environment and also make sure that manageable develop and use appropriate
strategies across the organisation. It include strategies to the development of business and also
include formulation and implementation of major goals and objectives (Ansoff and et., al., 2019).
Strategic management is useful in providing overall direction of an enterprise and also specify
the objectives of organisation for the development of policies and plans to attain objectives and
then allocate these resources to execute the plan. In this report Morrison's is considered which is
a supermarket chain in UK and become the forth largest supermarket chain, headquarter in
Bradford, West Yorkshire, England. Moreover, it is going to cover the determination and
analysis of external environment of industry which company face in the existing market.
Moreover, internal analysis is conducted to examine the strategic competencies and capabilities
and lastly with the help of prominent strategies competitive position is explored for company.
TASK 1
Understand the external environment of company to determine the market conditions
PESTLE Analysis:
This framework is useful in developing the deep understanding and analysis regarding the
different macro environmental factors which have direct impact on the processing, functioning
and operations of company. For this, it major factors include political, social, technological,
economical, environmental and legal (Benischke, Martin and Glaser, 2019). As these are helpful
in determining the different business strategies which can be opted by Morrison's. Below
discussed macro environmental analysis is conducted for Morrison's that is helpful in developing
understanding regarding the impact of macro environmental factors on company. Political: This factor is concerned with the political stability that has prominent impact
on Morrison's like Brexit was the major political factor that influences company and
bring major changes in the rules and regulations of an organisation. As it tends to bring
many changes and modifications in the policies of company as unsurprisingly, Brexit has
sparked political disturbance across UK. As the implications to leave European Union is
1

not least the fact that Brexit already create inflation in prices and continues to escalate. It
tends to weakening the pound that has been relatively more expensive. Economical: Frequent changing factors of company has great impact on the functioning
of company as in relation with Morrison's, changes which takes place in the personal
disposable income of nation tends to enhance and improve the buying power of people
and increases the sales of Morrison's. The retailers of British food industry is less
influenced with seasonal prevalence, only except the Christmas as here growth and
increment in sales occurs (Drobyazko and et., al., 2019). Moreover, most importantly it
influences the prediction of economic growth in the upcoming years. Sales also have
been reduces for last three years due to slowly restoration of economy. Additionally, the
GDP growth in country impacts the growth of Morrison's and also affect the interest rate
of country that impact the borrowings and investment. Social: There are many social factors that are concerned with society and other people as
it leads to increase the growth of education and health related factors of customers as it
positively and negatively impacts the functioning of Morrison's. Moreover, the buying
habits of customers is impacted by many factors that greatly influences the sales of
Morrison's. As it is important for company to offer more products to meet the
requirements of customers by providing friendly shopping environment to their
respective customers (Ferch and Roe, 2019). In relation with this, Morrison's need to be
aware about the health standards and importance of environmental protection that
prevails in the industry. Technological: There are many technical factors like investment regarding the
technological advancement that leads to improve the effectiveness of an organisation at
the same time it leads to incur huge cost by company (Hayakawa, 2019). For this, use of
digital information can become helpful for Morrison's in order to collect relevant
information regarding their target market and customers that help them in developing
future strategies of an organisation. Moreover, it describe the urgent requirements of
company that put emphasis on the research and development activities as it is helpful in
developing software system and useful for Morrison's in order to make major
innovations.
2

 Legal: This factor is concerned with the safety and legal modular that are developed by
flexible spending account and need to be obligatorily opted by organisations so that they
are capable enough and have conformity regarding different modulate as it is helpful for
company in order to make sure the equality and integrity in the total operations of
company. As in period 2016, there were approximately 1000 philosophy trade audits that
leads to relate with assorted legislations of organisation. Environmental: It include different environmental protection acts that are related with
the outside situation for which organisation is functioned. For this, the arrival terms like
Corporal social duty and property improvement is significant and also measurable for
company (Köseoglu and et., al., 2019). It is helpful for company in growing and
developing healthy environment as there is also some limitation by authorities on limiting
the use of impressible container by company as it is helpful for them in protecting the
environment.
Porter's five forces:
It is considered as the strategic framework which is useful for determining the strategic
directions and competitive forces that are present in environment and useful for company in
taking decisions (Met and et. al., 2020). It is a tool that is used by organisations to determine the
strategic forces which impact the functioning of company. For this, below mentioned strategic
forces impacts the functioning of Morrison's are as follows: Threat of new entrants: New entry bring competition in the industry and for this,
companies need to bring innovation with them in order to gain profitability and
sustainability for them. For this, new entry put force on Morrison's in having the lower
rating schemes as in return of this, other organisations give tough contest to Morrison's
depends on its price of commodity. There are galore brands which emerges in the
industry and give tough competition to Morrison's. Threat of substitutes: It describe that when the current goods and services does not meet
the needs and requirements of consumers then most of the customers look for the
substitute of product (O'Brien and et., al., 2019). It becomes the big danger for
organisations as it tends to diminution the total sales of company. In regard of this,
Morrison's should handle this danger in astute manner so that they are able to keep their
existing sales and achieve growth in relation to increase the future sales of company.
3

Company can also make suitable attempts in order to amend the choice of work to
enhance the satisfaction level of customers. Bargaining power of buyers: Buyers demand prominent offers as for this, they are
capable enough to increase their benefits and pricing that are being paid for the products.
Here, Morrison's need to hold and maintain is competitive edge as because of this, they
are capable enough to trade with business relation and also reduces the negotiation
quality of providers. Therefore, it is also helpful in maintaining relations with their
customised for longer period of time (Okumus and et. al., 2019). In relation with this,
huge customer base is helpful in increasing the growth opportunity for company. Bargaining power of suppliers: There are amount of providers are that are exist in
marketplace and influence Morrison's. For this, the negotiation quality is defined by the
amount of providers that are existing in marketplace. As if the provider have high
negotiation ability then it leads to decrease the earnings border of company. For this,
suppliers use bargaining power so that they are capable enough to gain the overall profit
margin (Ongaro and Ferlie, 2020). Effect of high negotiation ability of providers leads to
slow down the profitability of supermarket in business environment. For this, it can be
decreased by Morrison's by developing prominent supply chain as it helps in dealing with
number of suppliers in market.
 Competitive rivalry: There is competition among the present brands in grocery store
industry and Morrison's also belongs from it. For this, business competitors is handled by
Morrison's by processing property difference as it helps them in competing in the
competitive market conditions. Moreover, there is an option of cooperation with different
competitor within the market as it is helpful for Morrison's in having a large number of
market share and also tends to increase in the rivalry in marketplace as it has negative
impact on Morrison's.
From the above discussed forces, all of them influences each and every company as it is
quite relevant them to understand and develop future strategies and useful in determining the
existing competitive forces present in the business environment and market.
4

TASK 2
Use of relevant internal analysis tools analyse the competencies and capabilities Mission: The mission of Morrison's is that they are capable enough to offer best products
and services to their customers on the affordable prices. It will also helpful for company
in having a competitors edge in comparison to their customers. Vision: This statement describes the vision of company as they wanted to be a leader for
the development of sustainability and upcoming future. Objectives: Here, company has objective to become more sustainable and competitive in
order to provide its services in better manner and also find the most prominent solutions
of the problem. For this, the development of concerning work and also have leading
impact on the most concerning objectives in order to make the most supermarket industry
more strong.
SWOT Analysis:
This framework is used by Morrison's in order to develop an understanding regarding the
competencies and capabilities of company as it include various factors like strength, weaknesses,
chances and danger that are related with organisation (Pröllochs and Feuerriegel, 2020).
Moreover, this tool is useful in order to develop an perceptive of intrinsic components of
organisation. Morrison's is considered as the forth largest chain in terms of supermarket and
retailers and also achieve competitors place in marketplace. Beneath discussed SWOT analysis is
in relation with Morrison's are discussed as under: Strengths: Morrison's has number of strengths because of its brand image and reputation
that enable the thrive in marketplace. For this, strengths not only helps in protecting the
market share but also helps in penetrating the new market area. In regard of this,
Morrison's has develop expertise in order to take entry in new market and also achieve
success. The expansion is also helpful in order to organise and develop new revenue and
diversify the economic cycle risk of market for its operations (Remmer and Gilbert,
2019). For this, Morrison's has strong and free cash flow that is useful in providing
suitable resources for company in order to expand its new projects. In addition to this,
company has dedicated customer relationship manageable department that is useful in
providing customer satisfaction in their existing customers. Moreover, skilled workforce
is also important as company also provide successful training and development program
5

and in this, Morrison's invest in number of resources to develop skills of its employees
results in developing skills and motivate employees to achieve desired goals and
objectives. In addition to this, Morrison's have large portfolio of goods and services in
which they provide its services to large customers and have variety of options for their
respective customers. Weaknesses: It describe that area in which Morrison's need to improve itself by
developing prominent strategies to make suitable choices to achieve competitive
advantage for itself. For this, the profitability ratio is below the industry average.
Moreover, in comparison to other organisations, Morrison's has high abrasion rate and
also spend lot of money to examine the strategies of competitors and then provide
training to their employees accordingly. In addition to this, company is not so good in
forecasting the demand of products as because of this they missed number of
opportunities in comparison to its rivals (Simandan, 2019). For this, inventory is quite
high in comparison to its competitors because of the lack of forecasting skills and the
structure of organisation is not so compatible with the presence of business model so it
limits the expansion of product area. Moreover, company need more investment in their
technologies and also provide expansion of various geographic areas of company in terms
of planning and expanding the needs of Morrison's. Lastly, financial planning in regard of
company is not properly done in efficient manner as their current and liquid assets ratio
describes that company can use their cash in more effective manner instead of what they
do in their present time. Opportunities: The development of market leads to dilute the advantage of competitors
and also enables company to improve its competitiveness in comparison to its rivals. For
this, new opportunities will develop number of players within the industry as it represents
the huge opportunities for Morrison's to attain benefits in new technology and grasp
market share in the category of new product. Moreover, company can have its new
customers and increase number of customers with the help of online channels by
investing huge amount of money into the online platform (Stead and Stead, 2019). For
this, with the help of proper investment company can open new sales channels and also
leverage its opportunities by knowing its customers in better and effective manner by
serving its needs with the help of data analytics. Despite from this, new technologies are
6

useful in offering opportunities to Morrison's by developing effective pricing strategy as
it helps in enabling the company to maintain loyal customers by providing great services
to customers who are value oriented. Moreover, new trends and values also influences the
behaviour of consumers and also open new market for Morrison's as it provide great
opportunities for company to develop huge revenues and also diversify its products into
new categories. Threats: Advanced and new technologies that are developed by competitors in market
can become more serious threat for company as it impacts the industry in medium to long
term future. Furthermore, irregular supply of innovative products impacts the numerous
products and also often response to the development of other competitors. Liability laws
in various countries are quite different and for this, Morrison's is exposed regarding the
number of liability claims that offer change in policies and strategies in market and its
related conditions. As the demand of highly profitable products is seasonal in nature is
unlikely at the time of peak season as it impacts the profitability of company in short and
medium term (Taylor, Okazaki and Mueller, 2019). Lastly, increase in intense
competition also increases the number of competitors and profitability as it impacts the
sales of company too.
VRIO Analysis:
It is useful by companies in their evaluation of strengths and weaknesses of an
organisation and for this, it has basically four aspects that is the section of analysis as it describe
the value, rarity, imitable and organisation of resources (Teece, 2019). As these resources are
used by Morrison's that are competent workforce, global presence, cost strategy and
differentiation strategy which is discussed as under:
Resources Valuable Rare Imitable Organized
Competent
workforce
Yes - - -
Global presence Yes Yes - -
Cost strategy Yes Yes Yes -
7

Differentiation
strategy
Yes Yes Yes Yes
 Valuable: Every company has some resources that are most valuable for them to attain
the goals and objectives of company. For this, having good and competent workforce is
useful in achieving various objectives of company that are been developed by the top
level management of an organisation. Moreover, global presence is useful for them in
developing their presence across each and every section at global level that leads to offer
large coverage of market area. In addition to this, cost strategy is useful in developing
strengths in comparison to other competitors in the market segment as it helps in
attracting large number of customers because products are offered by them at affordable
cost. Lastly, differentiation strategy is also helpful for company in order to provide
something different to their respective customers. Rare: Global presence is not so rare but maintain this rare and for this many companies
opt prominent strategies and policies to reach customers across the world. Moreover,
other relevant features include differentiation strategy in order to offer something rare
that is not seen in other same brands (Witcher, 2019). Moreover, competent workforce is
also rare characteristic that is being developed by Morrison's because of prominent
training is provided to them. Lastly, cost strategy is also important as it helps in acquiring
a major section of market and also termed as the rare factor for company. Imitable: Global presence and competent workforce is opted by company as it is
considered as the important phenomenon for the development and expansion of company.
For this, differentiation and cost strategy are two prominent factors that are considered as
the major element and cannot be copied by other organisations.
 Organised: All the relevant elements of an organisation should kept in an organised
manner as there are smooth functioning which is concerned with the no hindrances in
order to achieve the overall objectives (Vorobyov and et., al., 2019). For this, competent
workforce, cost strategy and global presence are the main elements that are being
organised by company but differentiation strategy is the important aspect that is
compulsorily opted by organisation.
8

TASK 3
Explore strategic choice models to sustain the competitive position for company
For the organisation it is important to formulate various strategies as with the help of
such strategies the organisation can achieve their goals and objectives. Strategic choice is a
method with the help of which uncertainty can be managed in the organisation (Wooldridge and
Cowden, 2020). An organisation need to formulate various strategy that can be business
strategies or corporate strategies. The business need to understand various choices that can be
related to business strategy, operational strategy and transformational strategy. For taking the
competitive advantage Morrison's need to understand various model that can help them in
understanding various situations and opportunities for them. With the help of Porter's generic
strategy they managers of Morrison can determine the strategy that they must focus upon for
achieving their objectives. This models offers three strategies that are given below:
Cost leadership: This strategy suggests that the businesses aims to become low cost
producer for a required level of quality. This can be achieved by the organisation by utilisation
their capabilities. The organisation sell their products on average prices so that they can tap the
large market share in comparison to their competitors (Ansoff and et., al., 2019). Morrisons has
established their factories which facilitate them to save their costs. They have their own fleet
which facilitate them to manage their cost. Also they direct supplies to their stores which
reduces requirement of warehouses for them. For Morrison's competing on the basis of cost is
easy but for this they need consider various issues related to cost such as overheads, material,
labour etc. In addition to this they must take into consideration the design of the system so that
per unit cost of the products and services can be reduced.
Differentiation: When the company provides unique product and services to the
customers then it will increase value to the customers as with this the customer will perceive that
they offers better products. With this the customers can differentiate themselves with that of the
competitors. In this they target small segment as due to differentiation the prices of products
increases.
Focus strategy: Focus strategy concentrates on narrow segment as with this they can
focus with both cost and differentiation. This strategy is suitable in case when company cater
narrow market (Benischke, Martin and Glaser, 2019). Morrison's cannot adopt this strategy as
their market share is large and have capability of competing on large scale.
9

On the basis of this model it is analysed that Morrison's adopts cost leadership strategy as
they have invested in various aspects such as transportation, effective supply chain management.
Along with this they consider other cost related aspects which enables them in managing the cost
effectively.
Another strategy that can be adopted by Morrison's is Bowman's Strategy clock with the
help of which they can analyse the competition position in comparison to the competitors. This
strategy is used in combination with Porter's generic strategy so that competitive advantage can
be achieved (Drobyazko and et., al., 2019). This model suggest eight possible strategies which
are define in context of price and perceived added value.
With the help of this strategy the organisation can analyse that with the prices of the
products what can be the value that is perceived by the customers. When the prices of the
companies are low and the perceived value is also low then the Morrison's will need to keep their
prices low. Then with the increasing the pricing the chances of the company of loosing market
share increases but if the perceived value of the customers also increase then the margins of the
risk for the company increases (Ferch and Roe, 2019). But in case of the higher prices along with
high perceived values the Morrison's will get the advantage of differentiation. In case of the
lower prices and high perceived values then the company can adopt hybrid strategy. For
10