Strategic Management Report: Analysis of Morrisons Supermarket

This report provides a strategic analysis of Morrisons Supermarket, examining the impact of the macro environment using PESTEL analysis, assessing the internal environment and capabilities through SWOT analysis, and evaluating competitive forces using Porter's Five Forces model. The analysis covers political, economic, social, technological, environmental, and legal factors influencing Morrisons, along with its strengths, weaknesses, opportunities, and threats. The report also discusses strategic planning, including the use of a balanced scorecard, and provides a critical evaluation of growth strategies, along with recommendations for monitoring these strategies. The conclusion summarizes the key findings related to Morrisons Supermarket's strategic management and competitive positioning.

unit 32

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART-A...........................................................................................................................................3
P1 Impact and influence of macro environment .........................................................................3
P2 Internal environment and capabilities of Morrisons Supermarket.........................................5
P3 Explaining the competitive forces for Morrison super market...............................................6
P4 Strategic Planning...................................................................................................................8
PART-B ........................................................................................................................................10
Critical evaluation of the strategies ...........................................................................................10
Justification and recommendation for growth strategies...........................................................11
Monitoring the Strategies...........................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
A strategic management is required to plan about the necessities of an organization that is
essential to achieve its goals and objectives (Fatima and Elbanna, 2020). It is an ongoing process
in which a proper planning, monitoring, analysis and assessment is done, because this is very
important for any organization. The strategic management helps the organization to analyse
about the present situation, outlining the strategies and apply them and evaluate the effectiveness
of the management strategies in the company. This type of management have both financial and
non financial advantages. It also helps the management and their leaders to analyse about the
future goals of the company (Schawel and Billing, 2018). This sets a direction for the companies.
Morrisons Supermarket is a trading company that has a large chain of supermarkets. The report
includes some information about the influence of macro and internal environment on the
company. The report will include the strategic management plan of Morrisons Supermarket
company.
PART-A
P1 Impact and influence of macro environment
A macro environment is a set of conditions that exists in the organization. Macro environment
consists of some forces that shapes the opportunities for the company. There are different types
of forces that are demographical, economic, ecological, socio-cultural, technological and
political forces. The macro environment is the broader conditions of economy macro
environments affects business decisions. Macro environment of company can be analysed
through PESTEL as it includes six factors that are political, economical, social, technological,
legal and environmental (Perera, 2017).
PESTEL Analysis of Morrisons Super market is as follows:
Political factors that impacts Morrisons Supermarket
Political factors plays an important role that impacts the Morrisons Supermarket's long term
profitability in the country (Marrison Family History, 2021). From the analysis it can be said that
the political factors that can influence the decisions and strategies of the company are, Political
stability and importance of retail sector in economy, risk of military invasion, level of corruption
and taxations and price regulations.

It is analysed that when the Brexit report was released that warned that the UK had been
withdrew from the European union. This was a major political event and that created a lot of
uncertainties due to change in policies and regulations influenced many decisions of Morrisons
Supermarkets. Also it is analysed that Morrisons Supermarket faced a huge impact of multiple
government legislation on UK food retailers.
Impact of Economic Factors on Morrisons Supermarket
The macro environment factors such as inflation rate, saving rates, foreign exchange rate and
economic cycle determines the aggregate demand and it influences decisions of the company.
Morrisons Supermarkets also uses country's economic factors such as growth rates, inflation,
retail industry growth rates etc. to forecast the growth.
It can be analysed that Brexit has caused remarkable fluctuations in the currency and generated
inflationary pressure on the company. Also the analysis explains that the rise in oil prices has
also huge impact on the functioning of the Morrisons Supermarkets because it has resulted in
tighter budgets of their customers.
Impacts of Social Factors on Morrisons Supermarket
Culture of society and their ways of executing things impacts the culture and working process of
the company. Social factors that are analysed for Morrisons Supermarket are hierarchy of class
structure in the society, education level of their consumers, the culture of the population etc.
It is analysed that rising age populations are providing various business opportunities for the
Morrisons Supermarket company is impacting the organization positively. It is analysed that
growing interest of education and health of customers in UK has also influenced the market for
the company.
Impacts of Technological Factors on Morrisons Supermarket
Technology is developing in a very fast pace and has influence on almost every field.
Technological analysis involves an understanding for some impacts such as, recent technological
developments by Morrisons Supermarkets, it has also impacted the product offering and it has
impact on the cost structure also.
It is analysed that Morrison Supermarkets are using Artificial Intelligence to stock its stores that
drives sales. Also technology has influenced them in positive ways and helped them reducing the
wasted efforts and costs off making and made the business more efficient.
Impacts of Environmental Factors on Morrisons Supermarket

Different markets have different environmental standards that impacts the profitability of any
business in that market. There are different environmental laws in every country. There are some
environmental factors that can impact the system functioning and must be considered are
weather, laws related to environment, waste management, pollution regulations in retail industry
etc.
It is analysed that UK has implied a regulation in which operational emission of carbon is
reduced to 26.9% and aims for 30% by 2025, also zero waste was directed to landfill in the
manufacturing sites. It is also analysed due to these effect Morrisons Supermarkets have started
to offer pint sized glass milk bottles to curb the plastic waste.
Impacts of Legal Factors on Morrisons Supermarket
Any organization should carefully evaluate the legal framework when they are operating in such
markets as it can lead to theft of privacy of the organization. It is analysed that food safety and
legal standards impacts the strategies and functioning of Morrisons Supermarket. The company
has legal guidance and policies to support compliance with several regulations such as brexit.
P2 Internal environment and capabilities of Morrisons Supermarket
Internal environment can be defined as a set of elements that describes about the atmosphere
within the organization's structure. It also explains about how the process, relationships and
activities are being carried out inside the business and within the staff members (Christodoulou
and Cullinane, 2019).
SWOT Analysis
SWOT analysis report of Morrisons Supermarkets explains about that business case that covers
strengths, weaknesses, opportunities and threats of the company which is determined to prepare
business strategies. Morrisons Supermarket Company is operating in UK so many aspect that has
influenced the strategies are Brexit and currency shifts. Morrisons Supermarket company has
been competitive with the other bigger retailers and earned fat returns. The SWOT analysis is as
follows:
Strengths: the organizations strengths can be said as the capabilities of the firm. Over the years,
the organization has built its capabilities that offers increased competitive advantage over other
organizations. The capabilities include highly skilled and trained person, quality products and
also they are providing excellent customer services.

It is analysed that Morrisons Supermarkets have strong distribution network and an efficient
supply chain. They are highly consumer oriented, they are using programs like “MyView” and
“More Card”. They are proving their strengths in large product portfolio and customization.
Weakness: The competing Firms can easily adopt the strategies applied by Morrisons
Supermarkets to develop their distinctive capabilities. Strategically, the company is not strong to
cope up with new challenges in the market.
It is analysed that Morrison Supermarkets are getting weak in various fields such as they have
limited geographic presence. The analysis also shows that they are not fast enough in responding
to changes. The customers are not loyal this weak loyalty is sparking concerns.
Opportunities: Morrisons Supermarket company can use their capabilities to make use of the
various opportunities present in the market. The growth due to online retail markets offer best
opportunity for organization to make most of it. Also many aspects are present in the market that
are providing the increased opportunities to the company.
With growing competition, increasing globalization and digitization in the industry, it has
become necessary for the Morrisons Supermarkets to establish strong global presence. Groceries
accounts for 16% to total spending of households in UK, and it has become the third largest area
of expenditure. There is enough market opportunities for the company. Also E-commerce is
boosting growth in the pandemic conditions has hyped the opportunities.
Threats: Apart from the intense competition, Morrisons Supermarkets is facing the threats of
decreased demands by the customers due to the pandemic. There are constant threat of substitute
products that can be offered by contemporary firms
From the analysis it is assessed that changing rules regulations, growing competitions,
technological risks are threats for the Morrisons Supermarket. Although sales have been
increased but the profit are clipped with COVID costs.
P3 Explaining the competitive forces for Morrison super market
Applying Porter’s Five Forces model to evaluate competitive forces for Morrison super market
which is a food retail company. This framework will help to analyse company's external
environment.
Threats of new entrants into the industry-

the threat of new entrants in the industry is moderate. Entering the retail industry requires high
capital investments which are not possible for every new entrant to undertake. However, there
are no stringent policies related to retail industry which increases the threat of new entrants
(Öneren, Arar and Yurdakul, 2017). There is easy access to the distribution channels in this
industry. This further increases the threat of new entrants. Threats of new entrants into the
industry are also high due to customer stick with their brand loyalty, but any miner change in the
quality or price can make them switch to other company, as switching cost of customers is very
low.
Bargaining power of suppliers- the threat of bargaining power of suppliers is low. There are a
number of suppliers who provide raw materials to Morrisons (MARRISON BUGIS, 2021).
Therefore, the switching cost to another supplier is low. This decreases the bargaining power of
suppliers. If the prices and terms of new supplier are not favourable t Morrisons, the company
can switch to other one easily.
Bargaining power of customers- the bargain power of customers is high in the retail industry.
This is because customers have a number of options available to reach to in case they do not find
the prices of Morrisons favourable (Niño Durán and et.al., 2020). There are a number of stores
and other retail organizations which provide food and other products which are also sold by
Morrisons. Therefore the switching cost of customers is low and they can easily switch to other
organization.
Competitive rivalry- the threat of competitive rival in retail industry is high. There are a number
of retail organizations which give tough competition to Morrisons. These include companies
such as Tesco, Aldi, Asda etc. all these are retail giants and have a large customer base which
may prove to be a threat to the chosen organization. These organizations provide same products
on competitive rices to Morrisons which increases the competition in the industry. Competitive
rivalry is very high due to diversity of competitors and rapid growth of this industry (Huang,
Yang and Tu, 2019)..
Thereat of substitute product- the threat of substitute products to Morrisons is high. This is
because Morrisons sells food products and clothes which have a number of substitutes available.
The substitutes of these products are easily available in the market with comparable quality. This
increase the threat. Also, the product differentiation is low which further increases the threat of
substitute products for Morrisons. However, the company is making efforts to intercut unique

features in its products to make them irreplaceable. Rivalry among existing competitors is also at
peak due to less quality differences in the product and services if the Morrisons, it is causing
threat of rivalry with high rate. Customers can switch to the substitute product anytime as
competitors in those industry are serving their product and services at relative price performance
(das Nair, 2018).
P4 Strategic Planning
Every business needs a strategic planning to run in the business this helps in creating a roadmap
for the business by assessing the standing and direction of the company.
Balanced Scorecard
Balanced scorecard is used to identify, improve and control the functions of business (Khalid,
and Rahman, 2019). This involves measuring four main aspects of business such as business
process, customers, finance and learning and growth.
Information will be collected and analysed from four aspects for Morrisons Supermarkets:1. Business Process: The business process is evaluated in which operational management is
analysed according to there is a gap between the current sale and the ideal sales (Vlados,
2019).2. Customer Perspective: For this part, the reviews from customers are collected and it is
found that they need improved service quality.3. Financial data: The financial perspective of the company is analysed and it shows,
Morrisons Supermarket requires more resources to enhance the investments. The
profitability of the company is gradually decreasing.
4. Innovation and learning: The Morrisons Supermarket company is investing in
programming tools which is used for the management of the organization all across the
globe. And it is analysed that they are good with innovation and learning.
Ansoff's Matrix
Ansoff matrix is important strategic marketing tool for planning which is used for finding the
opportunities. Here is the detailed Ansoff of Morrison Supermarkets (Elavarasan and et.al.,
2020).

1. Market Penetration: It is necessary for Morrison Supermarkets to penetrate in markets
for this, they can increase their market share, this will help the company in penetrating
new market. Market penetration is the least risky strategy for Morrisons Supermarket.2. Product development: Morrisons Supermarket can find new product to sell in their
present customers, for example it is a food and beverage seller and now they can offer
electronics. This is moderate risky strategy for Morrisons Supermarket.3. Market development: Majority of suppliers and producers the firm are from UK. They
can find new markets to sell their products. The strategy of market development is also
moderate risky strategy for the firm.4. Diversification: It can be done for attracting new customer base. Morrisons Supermarket
is selling food items they can introduce non-food items in the new markets. This strategy
is the most risky for the firm but if works it will be most profitable.
Strategic Plan
The objective of Morrisons Super market is to make improvements in customers services and
creating new revenue streams. Also they are focusing on expanding their business.
From the analysis it is found that there is gap between their targeted sales and current sales. Also
the customers require increased service quality, the company needs more resources. Due to all
these reasons there is a dip in the profits of the company.
First of all the company will fulfil the resources scarcity. For that company will find new
suppliers and manage the current suppliers. For this a proper understanding of cost and value of
supply chain from raw material to end product will be analysed, and create new partnership that
is advantageous for both the parties.
When the company has proper resources, there will be availability of the products for the
customers. As Morrisons Supermarket is also selling their product online, and they are selling
good quality products by increasing the speed of delivery the service quality will also be
increased.
For increasing the profit, the company can remove some drinks that are not demanded by the
customers or are less in demand, because they are unprofitable for firm. The company will
expanding their business in different countries, this will increase new customers. Also the
company will be reviewing the pricing structure and small increase in price of product will make
significant impact on the profit.

After analysing all the strategies, Morrisons Supermarket will be using market development
strategy. The company is mainly operating in UK it has 494 stores in England and serving
around 11 million customers. Company also desires to exp[and itself. Now the company will
open new stores in Scotland and Gibraltar, also they will be opening stores in Asian market.
They are currently using both online and offline platforms, so by using online platforms first they
will create a customer base then they will open offline stores in various countries.
PART-B
Critical evaluation of the strategies
Market development strategy: In market development Morrisons Supermarket has to open new
stores in other countries or states. It is analysed that when the company will open new stores, it
will increase their customers as a result the company can expand their customer base. This will
increase the profits of the company (Leiber, Stensaker and Harvey, 2018). It can also evaluated
that by selecting new markets, market development will support the company to grow. The
company is provided with competitive advantage and also business will gain decisive edge over
rivals.
It can be critically analysed that when Morrison Supermarket will be launching new stores in
other countries Morrisons Supermarket will have to know about different regulations and
environments. After understanding that properly the company has to prepare new and many
strategies depending upon various cultures. There are possibilities of failure as the company
might not be accepted by the new customers.
Product development Strategies: In product development strategy, Morrisons Supermarket can
introduce new products such as electronics to their existing customers. It is analysed that it will
increase the creativity of the company and new products helps to create new revenues. Product
development is done mainly focusing on fulfilling the needs of the customers. It also creates
higher value propositions. The professional network of Morrisons Supermarkets will grow, this
will increase the reputation of the company.

It is critically analysed that it can create and unrealistic future expectation for Morrisons
Supermarkets. The company needs to perform consistently in meeting the consumer value
expectations (Loredana, 2017). The new products that Morrisons Supermarket is thinking to
launch can fail unexpectedly. Manufacturing material might decline the quality and this can harm
the standings of the Morrisons Supermarkets.
Justification and recommendation for growth strategies
Justification: Morrisons Supermarkets can be using market development strategy for growth.
The primary focus of the firm is to expand their business. Market development is supporting
their goal of expanding. It will also provide new chances of growth to the company (Malagueño,
Lopez-Valeiras and Gomez-Conde, 2018). When Morrisons Supermarket will open new stores
and starts selling in other countries, it will help them to connect with new people and they can
increase their customers. Market development strategy will also support in increasing the sales of
the existing products in the markets that have not been explored by Morrisons Supermarket yet.
Market expansion also involves analysis of the way in which the current products of the
company that are food and beverages, can be sold in new places. This can be achieved by
different segments such as industrial buyers of the goods that was sold only to the households
previously and new areas of the country also in the country across the world.
Recommendation
It is recommended to the Morrisons Supermarkets that they can use the strategy of market
development. For this they can launch and open their new stores in the countries where they do
not have stores. As company already has approximately 497 store in UK, and they are successful
in dominating the retail industry in UK. So it is recommended for them that they can start their
business in other countries as well. There are a lot of opportunities waiting for them to explore.
They can open more stores in Asian market, as people there are very brand conscious and
Morrisons Supermarket has a great reputation. They will be successful in that market, also they
have few stores in Scotland, it is recommended for them to open more stores to reach as many
customers as they can.

Monitoring the Strategies
Monitoring is essential, it explains about the operations that the strategies applied in the
organization. For monitoring the process, the company will be using different programming tools
and artificial intelligence techniques.
For monitoring the process, the managers of the company will be analysing the first and third
party performance. If there is any problem with any of the level it will affect the process
negatively.
Also by comparing the performances of Morrisons Supermarkets with the other competitive
companies, also by analysing the current performance and the previous performances. By
analysing that the company is achieving their targets or not.
They will be analysing each part differently such as operation, financial, performances etc. all
these business activities will be accessed by using BPM tools.
By taking reviews from their consumers Morrisons Supermarket can analyse that if the
customers are satisfied or not because the main target of the company is customer satisfaction.
They also can take survey and analysis the current state of the company.
Also by taking timely meetings of the employees in the company, Morrisons Supermarket
company can analyse what is going on in the company. They also can u7se various apps in which
day to day data needs to be filled and the managers in the Supermarket chains company can
evaluate the effectiveness of the strategy.
CONCLUSION
It can be concluded that PESTEL, Porter's five forces and SWOT analysis is very important for
any company. These are part of macro and the internal environments on the organization. From
these company can analyse the competitive edge and the capabilities within the organization.
From the report it is evaluated that the company named Morrisons Supermarkets is a consumers
good company. That desires to increase their sales and also focusing on expanding the business.
From all the analysis in the report it is concluded that Market development strategy is the best
strategy for them to expand their business. In which it is recommended to the Morrisons