Morrisons their consumers and that too on affordable

 

 

Morrisons hold one of the highest position
in the UK food retail sector, but throughout my analysis it also shows that
compared to their rivals Morrisons does lack behind in competition. One of the
major concerns for Morrisons can be their online retailing is not that strong
due to this they lose out on customers that prefer online shopping. Morrisons
could increase their options for organic food growth as not many of their
competitors have that option which will also separate them from their rivals in
the grocery industry. Morrisons also wants to focus on providing fresh food for
their consumers and that too on affordable prices which the consumers can
afford. (Morrisons’ annual report, 2015). Overall Morrisons could improve
their market share as well by targeting the right market and to become the lead
grocery industrialist.  

 

Conclusion

 

 

Throughout my analysis it shows that
there is evidence to suggest that the Porter’s strategies and the Ansoff Matrix
model is still useful in today’s grocery retail industry. Morrisons has been
making profit but should increase on their sales a bit more by amending on
their strategy methods. One of the recommendations that can be suggested is
that Morrisons should focus on their expansion internationally so that they can
target different markets in Europe and America which will also give them a
brand name internationally. Morrisons could also increase on their market share
by opening more conventional stores so that they get known more and gain more
customer loyalty. The three terms stated by Johnson (1988) show that the
strategy of the low cost which is Morrisons main strategy could be feasible in
the national markets but could also be imitated by other competitors which does
has its own risk factor.

 

Recommendations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The
stock market seems to have an impact on Morrisons as well when the shares for
Ocado had dropped by 8% where as Morrisons shares had gone up by 6%.  This was a vital time for the grocery
industry internationally but the chief executive of Morrisons had stated that
he will be signing a deal to supply fresh, frozen product to the US online
Retailer to help them. (Pratley,
2016)

The recent changes in the government
might affect Morrisons strategy as it might affect them internationally, since
the Brexit has been taken place, UK food retailers including Morrisons have
been put towards risk, Migrant workers are an important part of the industry so
therefore this had a negative impact on the food retail industry as a lot of
people came under pressure that they might lose their jobs and a lot of
organisations including Morrisons might suffer from this. (Independent.co.uk, 2016)

 

Government
Issues and Stock Market Crash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One of the risk factors for this
strategy could be that Morisson might not have enough capital or investment to
support them overseas so therefore to expand they could partner up with other
organisations to gain more name and financial support.

Another strategic option for Morrisons
is their overseas expansion, this option is suitable but Morrisons might face
problems when it comes to British products. There is not a high risk in this
but it will be a new experience for Morrisons because if customers like their
products abroad chances are that they might be able to open more stores
internationally.

 

One of the main factors to consider
within the strategic analysis is the organic growth. Looking at suitability
Morrisons will find it easy to expand on their organic food strategy because it
has been doing that in the past. It is the easiest option available to Morrison
to expanding on their organic growth because Morrisons can easily get funding
for their investment by their stakeholders. (Morrisons-corporate.com.)

 

The last step is Acceptability, this
focuses on two other aspects which are the financial aspects and the
stakeholder aspects.  

The second option is feasibility which considers
the internal side of an organisation to see if they have the resources to
accomplish certain strategies if not they will exclude these choices.

The model focuses on three steps which
are suitability, feasibility and acceptability. To consider suitability the
organisation needs to look at the external environment to make sure that the
strategic choices are suitable for the organisation.

 

The strategic analysis is one of the
most common factors to consider when analysing the performance of an
organisation as companies need to keep on changing their strategies to survive
in the environment against competition. To analyse and conclude the Johnson and
Scholes framework can be adapted to provide a comprehensive result. (Johnson &
Scholes,2009)

Strategic
analysis

 

 

 

 

 

 

 

 

 

 

If Morrisons
wants to adapt this method which is quite risky because they will have to
produce products from scratch and would need to get rid of what they are
selling now, this could be risky due to the concept of customers not liking the
new products and they might lose out on their customers loyalty. These
strategic options can analysis the cost and benefits for an organisation in the
long run.

The last option
is diversification, Doyle (1997) stated that the diversification comes under
three forms which are full diversification, backward diversification and
forward diversification. The organisation chooses which method to focus on
depending on the situation whether they are entering a new market or just
competing against their competitors.

Morrisons does
this by producing new products with little changes and different versions of
their existing products in existing market so that they do not lose out on
customers either way and still provide products with changes to them by meeting
the wants and needs of new customers too.

The third option
is product development; this is when an organisation wants to focus on a new
product in the existing market.

Morrisons focus
should be on their market penetration as that is one of the safest strategies
because they focus on their existing customers and their needs but by following
this strategy they can also attract new customers with similar needs. The
section option is market development which focuses on the existing products to
launch them into the new market. One of the risks that are associated with market
development has been stated by Hooley also said going into the new market costs
money and therefore if the strategy fails, the organisation itself will lose
out on a lot of money and might also lose the value of the product (Hooley, et.
Al (2004). Morrisons could focus on this strategy by expanding overseas in
Europe or America, but to ensure that they implement this strategy properly
they would need to carry out market research that would provide them with the
best results and will need to find out about their supply chain management.

Ansoff matrix was one
of the most common methods used by organisations and was developed by Igor
Ansoff in 1957 and highlights the four major strategic options for an
organisation to adapt. (Lynch, 2009) the
first option is Market Penetration,
(see Figure 3) according to Hooley, the option to enter within the marketplace
is a low risk option that makes use of the existing resources. (Hooley, et. Al (2004)
One of the disadvantages for this strategy is that the company loses out on new
investments due to their focuses on existing customers which you could be a
risk for their regrowth in the market. Morrisons can consider expanding their
market by providing more organic foods, to do this they could focus on opening
more stores throughout the country.

Ansoff Matrix

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Morrisons should focus on the
differentiation strategy because they need to increase their market share to
ensure that happens they need to focus on producing different products for new
customers to regain their growth. Due to adapting this method of strategy
Morrisons would need to ensure that they concentrate on mass marketing a lot
more than usual as they should keep their prices the same but should change
their prices if needed with the trend as this would help the organisation create
revenue in the long run. (Newburry,2006)

The last strategy focuses on being non –
competitive. This strategy is the riskiest one, if you are not competitive
against your rivals then in the long run the organisation will be affected.

The third strategy is Hybrid which looks
out to achieve different products and low prices compared to their rivals.

The second strategy is the low price
which focuses on the pricing of a product.

Differentiation strategy focuses on
products that are different from their rivals and will benefit the business by
gaining profit.

it shows that the strategy clock is made
from 4 segments which are differentiation strategies, hybrid strategies, low
price strategies and non-competitive strategies. (See Appendix 3)

This model itself is one of the useful
models to expand further into an organisations market structure and to focus on
the important parts which are cost, product differentiation and market
segmentation. Rhyne stated that the model either focuses on the differentiation
which is the perceived value or with the customer needs which is market
segmentation. (Ryhne, 2009).

 

Bowman
Strategy Clock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As stated by Porter, an organisation can
also combine two strategies to ensure that they get the best results but it is
best to stick to one strategy because failure to do this can also lead to a
risk for the organisation itself.  Morrisons should not use focus strategy as their
main because they would not be able to cover earthing and will not be able to
achieve their goals.

Focus is also
a part of the Porter Generic Strategy model and it focuses on targets that have
been narrowed down to achieve advantages for the organisation in the long run. Considering the
analysis cost leadership is the most appropriate strategy for Morrisons as the
company sells products based on average market price to earn higher amount then
their competitors. Another strategy Morrison can also use is their differentiation
on lower cost products against their competitors which sets them apart.
Morrisons provide food at a lower cost that are harder to find at stores such
as Lidl and Aldi which gives them their uniqueness, to ensure that they gain
more customers they should bring the products more to attention by consumer
online and in store. 

Differentiation
is also a part of the strategy model which tends to focus on the products to
ensure that they are different and unique so that they meet the demands and are
valued by the customers. Differentiation is an important part of this model because
if the product is not different and unique it will have the same price as the
usual products as their competitors but if the products are unique and
different the pricing will also increase and so will the demands of the
products. 

Cost
leadership strategy focuses on a strategy to ensure they become the lowest cost
organisation. Morrison’s focuses on the cost leadership as they ensure that
they provide different experiences for their customers and provide products
with different designs to ensure that their competitors do not stand a chance
against them.  

According to
Porter’s Generic strategy model, there are three options available to
organisations to gain advantage for competition which are cost leadership,
differentiation and focus. (Porter ,1985)

Morrisons will need to emphasis on their
strategy by providing different products and services for their consumers to
ensure that their company stays in lead.

Competitive advantage is something that
gives an organisation lead against their competitors.

 

Competitive Advantage  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Morrisons is a
well-known retail grocery industry that focuses on their wholesale performance
and ensures that they provide the best for their customers. Looking at figure 1
(in appendix 1) it’s showing that their turnover was up by 1.2% in the year
2016 and 2017, Since 2011 it’s the first time that the sales have been so
positive for Morrison’s. The performance for the organisation has been rapidly
growing due to new in store experiences the customers are experiencing. Looking
at figure 2 (in Appendix 2) It is showing that from 2013 to 2017, Morrisons
have expanded their stores in Rontec petrol stations and have also launched a
new flower website to ensure they target audiences that tend to buy flowers for
occasions so they can provide next day delivery for them. (Mintel.com, 2018) Morrisons has
also introduced online and in store options which are also known as “food to
order” to provide different types of party food that customers can pre-order
and collect from stores. This has been beneficial for Morrisons as not many of
their competitors have launched this option.

Within this
report the tools that will be used and the techniques will evaluate the
strategy of Morrisons and will be extracted from the SWOT analysis used
previously in assignment one.  

 

Introduction