Introduction The purpose of this individual report is to assess the present procedures executed by Morrisons.
These methodologies will be investigated utilizing the strengths, weaknesses, opportunities and threats developed from the previous report. Morrison’s main objective is to make sure the organisation provides great food, offer remarkable service and being more efficient in their company’s strategy (Morrisons, 2017). Therefore, having their own manufacturing facility helps the organisation produce good quality food and distribute fresh food to their stores faster.
Morrisons is not the same as any other grocery stores as they have their own manufacturing facility where they produce fresh food in their store. The organisation conveys to their stores utilizing their own particular dissemination conveniences. So their strategy is straightforward and has been expanding over the last few years, the organisation has been offering great value and fresh food than any other grocery stores. Furthermore, they are attempting to open new stores locally and in town centres. Figure 1, shows how Morrisons have been progressing over the last 5 years. In 2004, their revenue for the year is £17, 680, 00. However, in 2017 their revenue has decreased to £16, 317, 00. The reason behind this may be because of the Brexit vote last year as it affected many food retailers due to the weak pound (BBC News, 2017).
Figure 1- demonstrates the financial statement in the last five years revenue for Morrisons (Hargreaves Lansdown, 2017).The organisation has obtained six HMV stores from the ‘music retailers, administrator, and 49 Blockbuster store’ throughout the UK. Also, Morrisons have obtained 7 former Jessops shops, all together to make up for lost time with rivals i.e. Tesco and Sainsbury’s (Mercer, 2013). The author also provided further information “Morrisons offering its employees a GBP 500, finder fee if they find convenience properties for Morrison that are subsequently opened”. The main purpose for this was for Morrisons M convenient store to be available in the market.
The organisation have to make sure they provide the right products to their customers at all times. Also, having vertically coordinated inventory network intends to get food into stores rapidly which helps the organisation achieve their strategy by providing quicker service to their customers. Competitive advantageJames (2009) in his article he highlights a variety of different approaches that Morrisons are taking, these approaches are summarised are as follows. He mainly states that Morrisons is doing very well.
The reason why Morrisons is doing very well is that they have developed their company strategy by engaging more with customers by offering fresh products. Being more involved with customers is helping the organisation compete with their competitors, they are overtaking customers and market share, leaving their competitors amazed by their outstanding performance over the last few years. James (2009) also states that Morrisons reported a 13pc increase in pre-tax profit to £636m for the year to February 1. Sales rose by 12pc to £14.5bn, while like-for-like sales, which strips out the effect of new stores, rose by 7.9pc. The shares rose 9¾ to 255½p.This is a huge advantage for Morrisons as this has helped the organisation open more stores in the UK and remain the top ‘four supermarkets’.
BBC News (2010) states that in the year 2008-2010, 577 supermarket stores were open; as the big four supermarkets ‘Tesco, ASDA, Sainsbury’s and Morrisons’. Morrisons only opened 41 stores compared to Tesco’s as they opened 392 stores. This is a huge disadvantage for Morrisons because this shows Tesco’s are always one step ahead of them.Porters Generic StrategiesPorter’s strategy is a vital strategy in order to assess the company strategy (Lynch, 2011). Porter (2014) states that organisations could attempt one of the three essential techniques: cost initiative, differentiation, and core interest.
As indicated by it organization expected to pick one of these systems to increase benefit. For Morrisons, the right strategy is to focus on price differentiation and efficiency. Over the last 5 years, low-cost leadership in sustenance retail segment clearly picked up by LIDL and ALDI, Tesco was attempting to get in that position yet Morrison was known for its own differentiation system by offering new nourishment and in-house arranged sustenance and concurring review costs was higher than average (Promise, 2009). The recent years have seen the most noticeably bad impacts of the recession, therefore organisations were required to invent and create methodologies which would concentrate on holding existing clients while drawing in new clients all the while.
WM Morrison Supermarkets plc, is an example of overcoming adversity in the midst of all the vast scale corporate disappointment and has figured out how to stay productive while its rival’s and organisations, as a rule, have battled an incredible arrangement. Lynch (2009) suggested that corporate key choices are normally in light of the strategies through which an association could use its current initiative in advancing worth and guaranteeing development, while Porter (2008) suggested that supportable advantage depends to a great extent on how well an organization plays out these activities. The requirement for organizations to develop and grow has been known to drive item and showcasing advancement, which thusly prompts them into receiving diverse hierarchical systems, in light of the items they offer and markets they aim for (Ansoff, 1984).Bowman’s strategy clock The Bowman’s strategy clock is a competitive analysis tool which shows how the strategy presents alternatives for competitive situating as indicated by value level (cost advantage strategy) or the level of apparently included esteem (a differentiation advantage methodology). According to Faulkner and Bowman (1995) suggested that the strategic clock is based on the generic competitive strategies. Their strategy shows that on the y-axis are observed user value whereas, the price is the x-axis. Furthermore, when it shows 7-12 and 1-2 on the clock it means that they offer more value for the client, as cost or advantages.
One feasible methodology is a low-value strategy (7-9). For Morrisons, the best tool to use for the purpose of business focus is Bowman’s strategy clock reason being is because this tool identifies the most critical part of any business for example market division, product differentiation and cost. From looking at the business progress on revenue for the year 2017, Morrisons is in route 8 which is a very low strategy. Therefore, this shows that the company will be competing against their competitors like the top 3 supermarkets in the UK.
Considering the company’s current situation where the organization is not capable of increasing market share and is unfit to keep up the positive income inflow. For Morrisons, the best position the company should consider within the strategy is the 5th route which focuses on the differentiation of the products. They should also consider 2nd route in the strategy which indicates bringing down the cost. Morrison’s concern is that the organization has turned out to be static and there is no development in the recent market share, therefore the organisation needs to expand their market share in the industry, and the product differentiation of the overall industry which is extremely essential in order to help bring the change within a product range (Lee, 2008). This change will attract clients and increase income by marketing. Hence why the organization needs to focus more on the mass advertising rather on the speciality promoting.
Ansoff Matrix Ignor Ansoff developed the model Ansoff Matrix in 1957 (figure 1), the model features four noteworthy vital choices through which an association could adjust its new or existing items into another or existing commercial centre. The matrix is utilized by organizations in basic leadership forms encompassing item offerings and market development procedures. Also, the matrix is otherwise called the Product/Market development network and the real capacity is to help associations in assessing accessible choices for development given their item and market blend. Johnson et al (2008) likewise portray it as a technique for learning the advantages or dangers related to each key alternative. The major key alternatives accessible are for an association to infiltrate its current market, build up its market, and build up its items or decent variety totally with another item into another market.
Figure 1. Ansoff Matrix. Source: Ansoff (1957), adapted from Lynch (2009)For Morrisons, the ideal approach to analyse the corporate level is by analysing through the Ansoff matrix, the reason for this is because the matrix helps the organisation develop their products and new markets. Morrisons can do this by expanding overseas, attracting new consumers by promoting and developing their convenience stores. Morrisons can increase their market share by the conventional shop, where they can sell products at the low price than the supermarkets. This will help Morrisons build a strong brand image and put a good impact on the grocery retailer.
From looking at the grocery retailing sector in the UK shows that customers are looking for more comfort in all parts of their grocery shopping habit. This is the explanation behind such an immense move in shopping routines in the course of the last 5-6 years. The pattern of purchasing when required has turned out to be progressively famous particularly among more youthful buyers (Mintel, 2016). Due to shopping habits in the UK, a recent survey shows that consumers over 81% of consumers look at products in the store and compare the best prices online, and 52 % of consumers use the same retailer all the time (Statista, 2016).