Morrison's Supermarket: Supply Chain Strategy Project Report

This project provides a comprehensive analysis of Morrison's Supermarket's supply chain strategy. It begins with an executive summary and introduction outlining the company's history, activities, profit, geographic market, and supply chain strategy. The report then delves into key environmental challenges, utilizing Porter's Five Forces, PESTLE, SWOT, and Ansoff Matrix analyses to assess the external and internal factors impacting Morrison's. A critical discussion of the current market share and strategy is followed by an exploration of strategic supply chain options and their implementation issues, including considerations for convenience stores and international expansion. The project concludes with a discussion of the challenges faced by the company and recommendations for future actions, supported by appendices containing relevant figures and tables. The student has used various academic models and frameworks to critically analyze the supply chain strategy of Morrisons supermarket, and its impact on the organization and its future direction.

Running head: SUPPLY CHAIN MANAGEMENT
Supply chain management
Name of the student
Name of the university
Author Note:

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Executive Summary
Morrison’s is one of the oldest retail markets of United Kingdom. The company is facing
difficulties in recent times due to different kind of losses in the financial grounds and due to
losses in the financial grounds and also due to a number of product recalls. Apart from this the
BREXIT deal has badly affected the economy of the country and has had a major impact on the
organization. The use of Porter’s five forces and the macro and micro environmental analysis has
been the main highlight of this report. The report ends with a proper recommendation about the
future course of action that can be implemented by the organization to ensure success in the
future.

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Table of Contents
1. Introduction..................................................................................................................................5
History and activities of the Company........................................................................................5
Profit of the Company.................................................................................................................6
Geographic Market of the Company...........................................................................................6
Supply Chain Strategy of the Company......................................................................................6
Intended Strategy.........................................................................................................................8
Current Strategy...........................................................................................................................9
2. Key Environmental Challenges.................................................................................................10
Porter’s Five Forces...................................................................................................................10
PESTLE Analysis......................................................................................................................13
SWOT Analysis.........................................................................................................................15
Ansoff Matrix............................................................................................................................18
3. Critical Discussion of the present condition..............................................................................19
Market Share of UK Supermarkets............................................................................................19
Figure 1: Market Share of UK Supermarkets............................................................................19
Discussion of the present strategy...................................................................20_Toc536445781
4. Strategic Supply Chain options.................................................................................................21
Critical Analysis of 3 Strategic Chain Supply Options.............................................................21

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Most Appropriate Strategic Chain option..................................................................................22
5. Range of Implementation Issues............................................................................................23
Convenience Stores...................................................................................................................23
International Implementation.....................................................................................................23
Impact on the market.................................................................................................................24
Table No 2: Timeline Table.......................................................................................................25
Figure No 3: Gantt chart............................................................................................................25
Conclusion.....................................................................................................................................26
References......................................................................................................................................27
Appendices....................................................................................................................................29
Appendix 1.................................................................................................................................29
Table No 1: SWOT Analysis.....................................................................................................29
Appendix 2.................................................................................................................................30
Figure 2: Market Share of UK Grocery Supermarkets..............................................................30
Appendix 3.................................................................................................................................31
Figure No 3: Ansoff Matrix.......................................................................................................31
Appendix 4.................................................................................................................................32
Figure No 4: Framework of Service Supply Chain Sustainability............................................32

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1. Introduction
History and activities of the Company
The following report deals with the strategic supply chain management of Morrison
Supermarket. The company was founded by William Morison in the same year. The company
started off as an egg and butter stall in Rawson Market, Bradford, England. The company was
mainly concentrated in the Northern part of England. The following report deals with the
strategic supply chain of Morrison supermarket (morrisons.com 2019). The company was
founded by William Morrison in the year 1899. After the takeover of Safeway in 2004 the
company increased its presence in the south of England including Wales and Scotland. It has
more than 500 Super Stores across Great Britain and solo Store in Gibraltar. After William
Morrison his son Ken Morrison took over the company in 1952 at the age of just 21 years. After
6 years the company opened the small shop in the City Centre which was the first of its kind self-
service store in Bradford (morrisons.com 2019). The store was unique and because it was the
first store that had its prices written over the products and had three different checkouts. After
this the company opened its first Supermarket named Victoria in the Willington district of
Bradford in the year 1961.
The company became a public limited enterprise listed under the London stock exchange
in the year 1967 (morrisons.com 2019). As mentioned earlier the company took over the reins of
Safeway in the year 2004 for which they spelled out around pound 3.3 billion. However the
acquisition was not too satisfactory in the first part as it rain in two difficulties because of the
outgoing management changing the change accounting system weeks after the transaction was
totally completed (morrisons.com 2019). The result was a series of profit warnings been issued
by Morrison and poor financial results. The company then started converting the stores from safe

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way to Morrison’s and it was one of the greatest transformations in the history of British retail
market. The company slowly grew in size asset purchased different stores of Waitrose. After the
acquisition of Safeway, the company acquired the takeover of Somerfield Supermarket chain in
March 2009. The company also purchased 35 different stores from the combined group of
Competition Commission and Somerfield in the same year as a deal to trade under the
Somerfield fascia (morrisons.com 2019).
Profit of the Company
A surge in the sales of the local foods like that of Plumgarth sausages and Voakes pies
has helped the company to fight off competition from the discounters and deliver a rise of 17%
in profit. The UK’s fourth largest supermarket chain said and the underlying profits rose to
around 11% to pound 374 million in the last year (morrisons.com 2019). The company
announced that the local suppliers have rose by more than 50% in the past 2 years. The signing
of agreements in between 200 farmers and other local food producers, the wholesale deals with
the likes of Amazon and Mc’Colls convenience store chain has also led to a sprout of around
5.8% in the total sales in the last year (morrisons.com 2019).
Geographic Market of the Company
The geographic market of the company is located across the United Kingdom including
Wales and Scotland and the Gibraltar where the company owns only one single store.
Supply Chain Strategy of the Company
The intensity of price competition in the market has forced the management of Morison’s
Supermarket to change the supply chain strategy of the company over the period of time.
ASDA’s over reliance on price clearly indicates that large supermarkets like that of Morison’s,

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ASDA and others have to spend a large time to gather the required momentum in the market.
According to, Chen et al. (2018) the goal of the supply chain management of Morison’s is to
provide the best quality products and support the customers at the least possible cost
(morrisons.com 2019). The company in the last five years stopped all the different kinds of in-
house projects. The implementation of a new and smart IT system in the business was the main
achievement of the supply chain strategy of the company. The reduction in the cost of the IT
systems after implementing a new and advanced IT technology has helped the organization to
ensure success in the supply chain strategy. The main characteristics of the Supply chain
management of Morison’s Supermarket have been discussed differently by different studies of
different authors. According to, Wang et al. (2016) the implementation of SMART hardware and
SMART IT system helped the company to reduce the cost of ownership (Chen et al. 2018). The
earlier servers were replaced with the most advanced servers that were helpful to manage the
supermarket in the easiest manner. The study of Wang et al. (2016) further states that an
important change in the supply chain management was to digitalize the entire process and make
it much more smoother for the business enterprise to carry on the business efficiently.
The company has tied up into an agreement with a leading IT firm to digitalize the
supply chain process. The application of new software, a new business approach and a new
systematic approach has been essential for the success of the organization in the market. On the
other hand the study of Swink et al. (2017) suggests that the organization follows the partner led
business model as different companies supplies different goods and services to the organization
that in turn are provided to the end users for their use. The presence of a large number of
suppliers and their collaboration in the field helps the business to run smoothly. Perez-Franco et
al. (2016) suggests that the digitalization of the supply system and the tracking and monitoring of

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the suppliers helps the management of the supermarket to ensure a robust and tight security for
the company. Stevens and Johnson (2016) supports the statement and adds that the presence of
open systems in between the suppliers and the management of the company is one of the greatest
advantages for the organization. The digitalization of the total supply chain has helped to set out
open standards in the business.
Intended Strategy
Morrison’s Supermarkets has been pushing for a overall structural change in the
organization. The urgency for environmental action that has been growing among the consumers
and most of the governments around the world, has been putting extreme pressure in order to
operate the organization in a sustainable manner (Stevens and Johnson 2016). Apart from this the
growing conviction that challenges the environmental sustainability will require direct as well as
indirect actions from the management of the organization to have an impact on the different
kinds of supply chain practices of the organization. The management of Morrison’s intended to
apply the supply chain by performing a number of different steps. This includes the likes of;
a. Mapping the Supply Chain- The mapping of the supply chain is one of the earliest
processes to identify the different changes and challenges in the environmental front. The
company had initial ideas to increase the number of suppliers to increase their options to
negotiate and easily carry out expansion activities. However, the problems due to the
acquisition of Sainsbury have made it difficult for the organization to do so.
b. Communication of different Expectations- The communication of the corporate values
and culture to the suppliers of the organization through the supplier code of conduct
could have led to the proper application of sustainability efforts in the business. Such a

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communication could have helped the organization to easily attain sustainability in the
organization.
c. Development of training programs- According to, Hajiesmaeili et al. (2016) the
introduction of training programs to let the employees get a proper and effective
knowledge on sustainability and tailor the specific needs of the organization was the
primary target of the Morisson’s Supermarket. However the organization could not
implement it properly and a basic training program was all that the management was able
to implement.
d. Drive performance improvement- The audit program is not carried out in the
organization currently and the presence of such an audit program can easily change the
performance of the company positively (Hald and Thrane 2016).
Current Strategy
Though the intended strategy was to develop a new range of environmentally sustainable
and open standard supply chain management, the organization has failed to address the issue
(morrisons.com 2019). The absence of proper finance and the problem with Sainsbury’s
acquisition along with the lack in the number of warehouses owned has led to the loss of the
business and has threatened the sustainability of the supply chain of Morrison’s Supermarket
(morrisons.com 2019). Currently the organization depends on modern range of technologies and
a data integrated supply chain model to carry on the supply chain activities.

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2. Key Environmental Challenges
Porter’s Five Forces
The five forces factor was developed by Michael Porter for assessing the attractiveness of
the different kinds of the industries. However, the five forces framework in this report has been
used to determine the supply chain strategies of Morrison’s.
Threats of New Entrants
Christopher (2016) has said that the new entrants in Retail brings innovation, new ways
of doing things and put pressure on Morrison (Wm) Supermarkets Plc through lower pricing
strategy, reducing costs, and providing new value propositions to the customers. Morrison (Wm)
Supermarkets Plc has to manage all these challenges and build effective barriers to safeguard its
competitive edge.
How Morrison (Wm) Supermarkets Plc can tackle the Threats of New Entrants
 By innovating new products and services. New products not only brings new customers
to the fold but also give old customer a reason to buy Morrison (Wm) Supermarkets Plc
‘s products.
 By building economies of scale so that it can lower the fixed cost per unit.
 Building capacities and spending money on research and development. New entrants are
less likely to enter a dynamic industry where the established players such as Morrison
(Wm) Supermarkets Plc keep defining the standards regularly. It significantly reduces the
window of extraordinary profits for the new firms thus discourage new players in the
industry.

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Bargaining Power of Suppliers
All most all the companies in the Retail industry buy their raw material from numerous
suppliers. According to, Christopher (2016) the suppliers in dominant position can decrease the
margins Morrison (Wm) Supermarkets Plc can earn in the market. Powerful suppliers in
Consumer Services sector use their negotiating power to extract higher prices from the firms in
Retail field. The overall impact of higher supplier bargaining power is that it lowers the overall
profitability of Retail.
How Morrison (Wm) Supermarkets Plc can tackle Bargaining Power of the Suppliers
 By building efficient supply chain with multiple suppliers.
 By experimenting with product designs using different materials so that if the prices go
up of one raw material then company can shift to another.
 Developing dedicated suppliers whose business depends upon the firm. One of the
lessons Morrison (Wm) Supermarkets Plc can learn from Wal-Mart and Nike is how
these companies developed third party manufacturers whose business solely depends on
them thus creating a scenario where these third party manufacturers have significantly
less bargaining power compare to Wal-Mart and Nike.
Bargaining Power of Buyers
Buyers are often a demanding lot. They want to buy the best offerings available by
paying the minimum price as possible. This put pressure on Morrison (Wm) Supermarkets Plc
profitability in the long run (Elgazzar Tipi and Hubbard 2016). The smaller and more powerful
the customer base is of Morrison (Wm) Supermarkets Plc the higher the bargaining power of the
customers and higher their ability to seek increasing discounts and offers.

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How Morrison (Wm) Supermarkets Plc can tackle the Bargaining Power of Buyers
 By building a large base of customers. This will be helpful in two ways. It will reduce the
bargaining power of the buyers plus it will provide an opportunity to the firm to
streamline its sales and production process.
 By rapidly innovating new products. Customers often seek discounts and offerings on
established products so if Morrison (Wm) Supermarkets Plc keep on coming up with new
products then it can limit the bargaining power of buyers.
 New products will also reduce the defection of existing customers of Morrison (Wm)
Supermarkets Plc to its competitors.
Threats of Substitute Products or Services
When a new product or service meets a similar customer needs in different ways,
industry profitability suffers. For example services like Drop box and Google Drive are
substitute to storage hardware drives. The threat of a substitute product or service is high if it
offers a value proposition that is uniquely different from present offerings of the industry.
How Morrison (Wm) Supermarkets Plc can tackle the Treat of Substitute Products /
Services
 By being service oriented rather than just product oriented.
 By understanding the core need of the customer rather than what the customer is buying.
 By increasing the switching cost for the customers.