Strategic Analysis of Morrisons: Macro and Micro Environmental Factors

This report provides a strategic analysis of Morrisons, one of the UK's largest supermarket chains. It begins with an introduction to strategic management and its importance in the business context. The report then delves into a PESTLE analysis to evaluate the macro-environmental factors influencing Morrisons, including political, economic, social, technological, environmental, and legal factors. Following this, the report examines the micro-environment using Porter's Five Forces model, assessing the bargaining power of buyers and suppliers, the threat of substitutes and new entrants, and the intensity of industry competition. A SWOT analysis is also conducted to identify Morrisons' strengths, weaknesses, opportunities, and threats. The report also examines the company's resources and competencies. Finally, the report concludes by summarizing the key findings and offering insights into Morrisons' strategic position and future prospects.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
PESTLE ANALYSIS OF MORRISONS...................................................................................3
Porter's five forces ......................................................................................................................4
TASK 2............................................................................................................................................6
Morrisons Resources and Competencies....................................................................................6
TASK 3 ...........................................................................................................................................7
TASK 4............................................................................................................................................7
SWOT ANALYSIS.....................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Management of the strategies is necessary as well as essential in the business entity as it
involves the implementation of the major goals along with the initiatives which is taken by the
top management of the company on behalf of the owners (Slack, 2015). The present report is
based on Morrisons is a fourth largest chain of supermarkets in UK. Morrison having a business
which is mainly food and grocery as well as sources along with the process so that they can sell
the fresh food by using manufacturing facilities. Morrison made a new partnerships with
Amazon, Ocado, Timpson etc. and revival of safe brand which assist in improving the growing
opportunities. This assignment analyse the strategic purpose of Morrisons. Moreover, for
analysing or evaluating the macro environment the employees of Morrison can using PESTEL
analysis and micro environment using Porter's five force model (Strategic Management, 2017).
Moreover, for examining the external environment they can also use SWOT analysis which helps
in finding out strength and weakness.
TASK 1
PESTLE ANALYSIS OF MORRISONS
Basis Descriptive
Political factor In the political analysis the community has been declare
some act that which are regarding within the environmental
refuge which helps in awareness about the ordinance
regarding the dissipate of disposal that is related to the food
retailer which is increase the costs of the business (Barney,
J.B and Hesterly, W., 2015). They are concerning about the
environmental protection of the industry that they has to be
aware of the several legislation which includes the different
laws so that they are concerning emission as well as waste

disposal. Sometimes problems can arise within the e
business due to high fees or by using the complex
regulations.
Economic factor In the economic the important part is cost of sales, in the
industry the sale has been reduced for regular before three
year in this situation the reason of the reducing of the sale is
slowly develop of the economic of USA. And the other
factor of the economic will be identified to recall the cost of
sale of the company (Rothaermel, 2015). After Brexit,
Morrison facing depreciation continuously of the sterling
than they can led to the inflationary pressures by increasing
the cost of raw materials, packaging, transport cost as well
as cost pressure which the business entity can face.
Social factor In this company the important part is provide the more
product and also the identified the customer need and wants
about the particular product that is increase the profit of the
company. In this analysis the basic requirement is friendly
environment of the market that is introduce the mature
customer. The UK having ageing population and which
assist in presenting the business opportunities for the
supermarkets which Morrison's have to grasp. Pension age
consumers having more income so that they can stay in full
time employment so that they can attain the goals and
objectives and earn having a high disposable income which
helps in providing the products in a better way.
Technological factor In the retailer store the most element of the process of the
technical analysis that is trucks, deep-freezer trucks are
included to the excellence taste and quality. Morrison
company is the main competitor to the use of the online
marketing and distributed channel to achieve the high profit

in a good manner. In this the company is invest the high
capital to the to generating the service and facilities. Internal
and external convey process can be enhance the use of
internet. Newly creation of the system of sending the
product in the main area to the promote the service
(Morschett, Schramm-Klein and Zentes, 2015). Morrison
has a big supermarket so that they have to introduce the
grocery e commerce so that they can attain the goals and
objectives.
Environmental factor Ecological and ethical issue can be a hard area for the
business. In the environmental analysis the basic concept the
increasing the need and wants for ecological friendly
activities and also the enhance the value chain of the
distribution. In this Morrison, prepared to exercise their
power so that they can do proper exercise which helps in
using the economic power to stop buying products and
services from companies which does not show the
environmentally friendly conditions.
Legal factor Legal analysis is the based on the regional area of the
regarding the shops and the supermarket. In the Morrison
persons is permit of local council of the local area shop and
also influence the strategies of the market as well as
industry about the product. If Morrison's is expanding its
business in the new market then they have to use
appropriate legislations which require compulsory deduction
of pension contributions from the workers which were
introduced.

Porter's five forces
Bargaining Power of Buyers:- The buyers of the Morrison is there customers. The bargaining
power of the customer is very high because there are large number of alternatives available. If
they will not be able to make the customer satisfy with there products then there are the chances
that the customer will switch to the other options and that switching cost will be low. All the
people have the knowledge of each and every thing going in the market so there will be a
chances that they will have the full detail of the demand and the price of the things in the market
so if they will find any differences in the price or any details in the product in there place then
they will switch to the other alternatives easily (Bettis and et.al., 2016). When Morrison is
selling the products to the consumers then they have to provide the appropriate information so
that every consumers can attain the success in market.
Bargaining Power of Suppliers:- Till now the bargaining power of the supplier has not been
greatly threatened Morrisons. It is because the policy in the house is sourcing the major
proportions of its products. As the terms of market expansion in teams of the geographical way it
is been necessity to search the new suppliers. And the future bargaining power of the supplier is
cant be able to predict. Morrisons will be able to use their economical scale as an advantage for
subdue there suppliers. If little to the market is that they dictate the price which they pay to the
suppliers and if the suppliers does not agree with that then the suppliers will be left with non of
the retailers. For doing the market expansion, employees of Morrison's have to search for the
new suppliers so that they can not face any obstacles which accomplish in meeting the
objectives.

Threats of substitute:- Threats of the substitute is not much high problem. It does not replace
the product entirely but it may introduce the new methods of the substitute product and it can
make the price of the original product low. These changes by the substitutes can make the limit
in the profit of the industry by keeping the price down. And in the grocery industry this can been
known as the product for the product means the product having the other product having the
similar uses at same time. So therefore the substitutes are been seen as the low threats ( Carraher
and Paridon, 2015). The concept of smaller franchised store chains which are gathering in
popularity as well as so that they become a considerable threat in the future.
Industry competitors:- The retailing supermarket industry is the highly competitive market. But
Morrisons is trying to improve its position in the competitive market it is trying to be in the
fourth place in the market and they are trying in the safe ways. The some other competitive
industry is little threats for the Morrisons because of there financial status and there cost
efficiency and by there size. If company wants to improve the position then they have to possess
the great threats of Morrison's due to their sizes, financial strength as well as cost efficiencies.
Threat of new entrant:-There are possibilities that the new firms may enters any new industry's
also can effect the competition market. Morrison should have the ability to enter and exit the
market and there product should always be nominal. They have to possess the characteristics that
to protect the level to attain the maximum profit in the market to stay (Nahavandi, 2016).

TASK 2
Morrisons Resources and Competencies
Resources which are helpful to attain the competitive market advantages. Capabilities and
the core competence are the resources. To create the capabilities of its organisation Morrison's
can use this resource. There are different types of the capabilities by which the company is
having the other resource which is core competencies which is on the basis of the production of
the new product in the existing market or in the new market and the product should have to be
unique product so that it can be excepted by the people in a big amount if it will not attract the
people then it will not have any advantage. There are two more different resources like tangible
and intangible resources. Intangible resources are that which are not been touched or seen. Like
financial resource, physical resource, technological resource (Wilden and Gudergan, 2015).
Financial resources is having the ability of the firm to borrow or having the potentiality to
generate the funds which are done internally. Physical resources are that resource in which the
attractiveness of the location and the distribution facilities and the inventory are been included.
Technological resources are those resources which are been related the technology like
copyrights, patents, trademarks etc. Tangible resource are those resource which are been seen or
touch by the people it is like:- human resource, innovation resource, reputation resource
(Morrisons tumbles despite profits surge, 2017). Human resource is the main resource of the
company by which the company are been excise. This is the most important resource which is
having the knowledge of the things and having the knowledge of doing the work and it can be
trustable resource. This is having the most high skills. Innovation resource this is that resource
which is having the scientific and good ideas capabilities and the capacity in innovating the
product so that the consumer can easily get attracted to the product and can purchase the
product. Reputation resource in that resource which is having the things like brand names and the
positive reputation with the stakeholder this plays the important role as it contains the brand
name etc. so it is important to make this thing always in an good manner. If the image of the
industry is gone in the eyes of the stakeholder then it will create big problems for the industry
and that will make the bad impression in the market and then it will have to make much more
effort to survive (Strumickas and Valanciene, 2015).

TASK 3
Vision: Morrison having a vision to be the leading utility service provider by delivering a cost
effective, quality service to the clients or consumers so that they can achieve acceptable financial
returns.
Mission: The mission statement of the company is to provide best products to their consumers.
Value: There are some values which support the vision of the company which includes safety,
service delivery, consumer, innovation, effective controls. Along with this they have to use
proper culture while providing the best services. Proper training is to be provided to their
employees which will helps in improving the performance (Percy, Elliott and Rosenbaum-Elliott,
2016).
The business entity is planning to start the business in China and they have to do work for
the betterment of its staff along with its units. China is a developing nation and they hare having
a lot of scope along with the opportunities for the administration. Morrison have to proper
planning along with the implementation for attaining or maximising profits. They have to grab
the opportunities along with the market and have to provide qualitative products so that they can
increase the sales. When Morrisons providing best and quality products which assist in providing
and improving the satisfaction level and by that they can improve the performance in the market
place (Dess, McNamara and Eisner, 2016). The staff members of Morrisons have to make some
strategic plans so that they can not face any problems and by that they can reap the ultimate
goals. They have to set the Vision according to the market of China and on the basis of that they
have to provide the products to the consumers so that they can attain their goals and objectives.
So, they have to establish a business unit in the market of China which aid in expanding the
market share along with the mission and vision statement of the business entity.
TASK 4
SWOT ANALYSIS
Swot analysis is the identify the strength and weakness of the organization and also
understand opportunities and threats of the company it is a external factor and the strength and
weakness is the internal factor of the organization.
Strength Weakness
The company have the lots of strength for the In the company the worst part is not having

growing fast and also the set the power of the
organization. In Chinese companies gives us
the food and also the grocery items in a cheap
rate and also sell the fresh food like vegetable
and fruits and any other food they also sell non
food item (Chiarini and Vagnoni, 2015). In
this countries the main aim is sell the product
ans also increase the profit. Company strength
based on the companies goodwill as well as
selling system of the product in the market.
Experienced employees: Morrisons is an old
retailer company so they are having
experienced employees which are having
ability to perform any type of conditions.
good working system that is effects on the
companies goodwill. Weakness is the
important factor of stop the companies growth.
Low market share: They are having down fall
in their market share which is creating pressure
on them to improve their strategies to increase
it.
Opportunities Threats
In this the company have lots of opportunity to
grow up their business. The company based on
the food product that is more important factor
of grow up the opportunities as well as
business (Demil and et.al., 2015). Brand name:
They are having big brand image which can be
use by them to increase and develop their
marketing new country.
Against the ecological factor the company
have more threats that is effect on the product
n business and also increase the competitors in
the retail marketing and the community declare
the rules for food safety and business. Market
rivalries: Tesco is leading in the retail market
and it is having 28% of market share which is a
risk for the Morrison's.

The key parts that are required to get enter in the Chinese market are following:
 Licensing: In this key parts the Morrisons have to work for get licensing to do the
international trade to exchange the product in the Chinese market. Licensing is also the
part of legal process to provide a status to do the business (Helfat and Peteraf, 2015).
 Exporting: Exporting is that element which is introduce the plan of exporting the product
in Chinese market. In this key words the that is process to exchanging the product in the
particular area to evaluate the business and the also boost up the companies growth.
 Franchising: Franchising is the long term relation between two cooperative entities one is
franchisor and another is franchisees. Franchisor is bases on the act that the franchisor
give the licence to the franchisees to do the business in the whole area (Carroll, 2015).
As the industry is working much harder to survive in the market and make there industry
grow and they are try different ways for that. It is important for the company to follow some of
the internation trade practices so that there industry can run smoothly. Along with all other things
there are some other following things which should be followed by the company while they are
trying to venture in Chinese market. Some of the elements are :-
 Cost the main factor in the business as it plays the important role in the company because
all the factors is worked on the cost elements. While going to establish in the Chinese
market then it should in mind that the cost of it should be low it should not be very high
(Luo and et.al., 2015).

 There should be taken control of the activities which are been organised and it should be
on the perfect time.
 Risk can be the major element because it will create problem in new venture. So it should
be taken so much of care that while establishing of the new venture in china then there
should only have very low risk. That nation is the developing nation and it is having the
high population there so there is a high possibility is of low success in the market. The
low success of the international trade over there it can be because that china is an
developing nation so it will not essay to survive there if the company is not having the
good policies (Karepova and et.al., 2015). So this is also the great factor which is to be
keep in mind while doing international trade.
 There should be quick action taken to grab the market as well as complex situations it
must be resolved by negotiated. They can face the problems while merging with the
domestic operations so the company should take care of the all elements (Buckley,
Burton and Mirza, 2016).
CONCLUSION
After summing up the report it has been inferred that the staff members of Morrison's
should use SWOT analysis so that they can find out the strength, weakness as well as
opportunities and threats so that they can enter into the China market and attain the success and
goals.