Among the large markets of the United Kingdom, the fourth largest supermarket chain is of Morrison’s supermarket. It is located in Bradford, West Yorkshire, England (Bennett, 2012). It has been founded by William Morrison in the year 1899. This report analyses and evaluates the strategic management by the using the analytical modules along with defining the industry competition in the Chinese market.
The business environment of the organization is defined by the PESTAL analysis which include political, economic, social, technological and legal environment of the company. This is analyzed with respect to its competitors, customers and suppliers. The PESTEL analysis of the Morrison macro environment is defined below:
There are certain laws which have been formed keeping in mind about the environment protection. In light of this an industry has to be alert for such legislations which for the laws which are considered for the waste disposal. Also, at the time of animal disease crisis there could be devastate meat and milk production which in turn increased the production of meat, cheese, cream, etc (Economics Online, n.d.). The main watching players of UK supermarkets are the UK competition commission and the office of fair trading. The reason behind this is the high cumulative market share which lies between 14%-24%. High fees and complex regulation introduced by the UK and EU government are the problems within the e-business (Kamlavora, 2012). These are identified in comparison to the USA based supermarkets.
There is less impact of seasonal prevalence, as for Christmas time, bring an exception which usually shows increase in growth in terms of sales (Farmhand, 2009). Factors such as forecasting the economic growth rate is considered to be an important factor. However, because of slow growth rate of the economic market of USA, the sales have been drastically reduced of the last three years. This is how the economic factors affect the economy as a whole.
The social factors are more of affected by the population of the country which is affecting Morrison the most. To meet the higher expectations of the customers has become the need of the time. Also, these days the additional requirement has been provided for the mature customers that is the friendly shopping environment. This era had given rise to the concept of greenness which requires the environment friendly activities which embrace the spectrum of the brand value proposition (Seely, 2012). A major implication with respect to the grocery and food industry has been made with Chinese and other types of raw material.
The food industry of retail which needs to be transported in the equipment such as trucks and deep freezer are necessary to maintain the quality and taste of the products. However, for this there is need of uber trained and efficient labor.
The environmental factors are such as controlling the environment and keeping the environment clean which has a key area shall be it is needed by Morrison to act in a responsible way. Also, to reduce the waste there are certain implication that are made by Morrison such as sustainable consumption so that the resources are used in an efficient way which do not cause any harm to the environment. However, the society shall be sensible enough for towards environment.
UK government has strict regulations for the retailer regarding the quality and the material and their employees who deal in the online retailing of the products which are manufactured by the Morrison (The economics online, N.D.).
In this way the external environment of Morrison is evaluated. Moreover, the industry competition in the Chinese market can be analyzed and demonstrated in the following manner. The market research in the Chinese market shows the analysis with the large supermarkets that already exists in China among different contexts. In the geographical context the Hualian is considered to be the strongest competitors. Also, market research and analysis reveals the competitors as Carrefour which is typically operated among Chinese provinces and other cities. Most of the shops that are there in other provinces are such in Guangdong, Beijing, and Tianjin. Among all these the Chinese market has the competition with respect to the super low prices and fresh products that are being most competitive with reference to the Chinese market. Hence this it is determined that Morrison can take a lead among the persisting competition in the Chinese market by breaking down of the strongest strategies of its present competitors.
The resources of the company Morrison are basically of two kinds which are as the threshold resources and distinctive resources. The threshold resources consist of the competitive resources of the company such as the trusted suppliers. Trusted suppliers are the one who are responsible for the long term relationship so that it proves to be a resource for Morrison. Another resource which is identified is the large number of stores that Morrison has in Britain itself. It is a resource as having large number of stores, serves to the people for fulfilling their daily needs. Also, this is supported by the skilled employees which are the big resource for Morrison.
In addition to it the distinctive resources identified are as the four seventy five stores in Britain. Also, there are more than 131000 numbers of employees who have got various distinctive skills which proves to be a resource to Morrison. Moreover, providing to its customers with fresh food along with guarantee becomes a resource for Morrison. The stores that are present with in Great Britain have strategic location; as it is more approachable for its customers. These are the strategic capabilities of Morrison.
Along with its resources, there are such competencies which prove to be an advantage for Morrison. This is defined as the good brand image Morrison has built over years. Morrison owns the patented products. In addition to it, the distribution system is very well organized that proves to be a competency for an organization. The distinctive competency of Morrison consists of great values and quality of the products delivered. Also, it has well designed so that the customers can shop with ease. These are the capabilities and competencies of Morrison which proves to be of utmost important for an organization.
The potential that is identified of Morrison in terms of competitive advantage in the Chinese market are as follows:
Firstly, Morrison has successfully identified and analyzed the Chinese market in maintaining the global position. There are various factors upon which the potential of Morrison’s is identified in terms of competitive advantage of Chinese market. Such factors are:
These are the factors on which Morrison has successfully entered the Chinese market. Hence, it seemingly the limitless potential of the Chinese market based upon such factors. Among all the BRICS economies China has been accounted for the majority of the foreign direct investment (FDI) which has shown increased by 6% (Morrisons, n.d.). The CPC has improved upon the market orientation. The Chinese markets are considered to be politically stable and the risk factors are comparatively low. When taken to the market size, it has been ranked at four in respect of the land mass. These are such factors which are considered to be the competitive advantage which determine the potential of the Chinese market.
The mission of Morrison is to provide such services to the whole society, children and other people with the premium services. Also, there are the services which are given by the Morrison in order to give the integrated services. To treat and provide with the equitable treatment to the clients along with giving the highest priority is the strategic vision of this organization. There are various strategic goals that are needed to be built according to the existing programs and hence they increase the efficiency of the existing programs by developing and innovating the funding models in order to meet the existing requirements by the of the clients with fulfilling their future needs. This is done by expanding the resources along with the increased visibility of the philanthropic support of the clients. These are the strategic processes that are there in the UK market. As this organization is among the big five of UK market, it also offers with the online grocery shopping advantage for their clients. This by the time has become the core competencies of the company. Moreover, Morrison had a tie up with the delivery services which shall render the services with delivery, named as Ocado for online service delivery (Smithers, 2013). By this criterion, the method that was used earlier by the clients that is direct shopping has decreased somehow. This method of online shopping have many advantages over direct mode of shopping any which ways. The mission of Morrison is to provide with the whole nutritious food and other dining services that are there mentioned in the norms of healthcare industries. The vision of Morrison includes strategies that shall be implied in order to increase the growth rate in the competitive market.
The SWOT for Morrison is analyzed and descried as below:
Firstly the strength of Morrison can be described as the company has various strengths which are helpful in growth of the company. As Morrison provide with the food products at cheap prices comparatively. At the same time they are of good value as of they sell fresh food like fresh fruits and vegetables. In addition to it, Morrison attracts by their own packaging strategies that is mostly liked by the customers who further result in buying the food and other eatable from the same company. Hence, it becomes their strength. Not only has this but Morrison sold other non-food items up to number of 12,000 products. If the comparison is done, the maximum retailing is done in the United Kingdom (Lawson, 2013). These are the strengths of Morrison.
Secondly the weaknesses of Morrison that are analyzed is as the concept of Online retail concept which is considered to be the most attractive if we see it from the point of view of growing potential growth of the company. However, if we see in this concept Morrison lacks in the attractive infrastructure and that of the information and technology. Also, analyzing the health and beauty section of the supermarket there is tremendous sales in this segment. Along, with it this offers a good share in market and saturation in industry. Not only this, but in the home and leisure section there is the concept which are analyzed not to be that interesting to the customers. From the industrial point of view, they don’t provide area specifically (Morrisons , 2013). This is the weakness for Morrison.
Thirdly, there are the opportunities which are there for Morrison helps in development are as follows. Morrison is such a company which expands its market to various other markets. Along with it they aim at the non-food items too. Morrison has introduced into the markets the more quality products in comparison with the competitors in the market also. The biggest opportunity that Morrison has is that it has many small store and shopping centers in the main area of the city so that the sales are improved.
Fourthly, the threats that are there to Morrison from other competitors, are in terms of the packaging (Hines, J. (2013). The threat is that this packaging is against the environmental protection. Along with it the government has many new rules relating to the safety regulation and laws.
These are the strengths, weakness, opportunity and threat which are there for Morrison from the other competitors and the global market (Morrisons, 2011). In addition to it the business level international strategy which is recommended for the entry mode into the new market are recommended as follows. For the new market entry mode it is recommended that Morrison can enter into other foreign market by the following method. For instance there cannot be only strategy followed for entering into new foreign markets but various strategies could be mold as per the need of the time. The main strategies among them are by the way of:
This is the strategy which is recommended to be followed by directly selling into the chosen market. This can be done by using the own key resources of the company. Various efficient sales programs can be established do that this sales program so that this can be represented by its respective agents and distributors (Thomson, 2013).
It is recommended that the licensing strategy can also be followed as by this process rapid market expansion is seen. This process has by the time gained traction from the rest of the world. This many a times works well with other business model let us say with food outlet. For considering a franchise model there is a requirement for two caveats. The first model is such a business model which can be used for the sake of brand recognition at the international level (Sparkes, 2012). The second is used for the creating such future competition of the particular franchisee.
This is suggested to be applied considering being the most sophisticated in which the firms transfer the rights based upon the usage of the particular products that are being manufactured. This is specifically a useful strategy as if the buyer of the license will have relatively large market share in the market to be entered in. in other words it can be said that it has a theme for extensive production or marketing.
The joint ventures are a part of partnering strategy that is responsible for managing the company independently. This is basically known as 1 +1 = 3 procedure. The reason behind this is being two companies that have decided to work for a particular segment of market (Stamer, n.d.). This is based on the factors or either geography or usage of the product. And hence as a result creates third company to undertake it. However, profits and risks are shared accordingly.
These can be the modes of entering a new market by implying such strategies at an international level.
Conclusion
After reviewing the analysis tools, it has been concluded that Morrison has successfully developed the strategies despite of the high competition in the market. Here, the main issues that were analyzed are as the history of Morrison, along with the external environmental factors that are faced during the global competition. The major Chinese markets are the competitors to Morrison in the present era. Then after, the core competencies and the resources of Morrison are analyzed. The overall supply management seems to be critically analyzed according to the Chinese markets. Here by, it is concluded that the Morrison is successfully working according to its vision and mission.
References
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