A Case Study

of WM. Morrison
Supermarkets PLC
 ABSTRACT

Wm. Morrison Supermarkets PLC (Morrison) is an integrated retail company that

procures, manufactures, markets and supplies various products through in-store and online

portals. It is one of the oldest retail market players in the retail segment in the UK. This analysis

is aimed in an effort to understand the different strategies implemented by Wm. Morrison

Supermarkets PLC and whether or not their strategies remain relevant, applicable, and feasible in

this generation’s supermarket industry. SWOT Analysis and Porter's Five Forces were used to

better understand and get to know the company. After analyzing the case, it has been seen that

the company is not in a good shape though they have a considerable market presence, they

remain unable to cash on those factors. The best significant leg up that the company can go for is

a combination of strategy considering the focus on differentiation of the products and price

lowering. The company must also adapt to the fast-pace society and demands of technological

shifts and advancements and seek to respond to greater advancements in their marketing

techniques.
 TABLE OF CONTENTS

INTRODUCTION 1
ANALYSIS AND FINDINGS 3
Figure 1: SWOT Analysis 3
Figure 2: Porter’s Five forces 5
CONCLUSIONS AND
RECOMMENDATIONS………………………………………………………………………….9
 AN OVERVIEW OF WM MORRISON SUPERMARKETS PLC AND ITS PROBLEMS

Organizations must perform at reliable and successful levels in order to provide the best

customer experience. Such will be achieved by implementing a fit strategy in place. Wm.

Morrison Supermarkets PLC is an example of a company that excelled in corporate strategy

making them go from an egg and butter stall to one of the United Kingdom’s largest chains of

supermarkets. The company also started other four operations with the name Kiddicare,

Morrison Cellar, NUTMEG clothing, and Morrison Online. The success of this company and its

later developments were credited to its never-ending commitment to providing the best customer

experience and doing its job right.

This analysis was done in an effort to understand the different strategies implemented by

WM. Morrison Supermarkets PLC and whether or not their strategies remain relevant,

applicable, and feasible in this generation’s supermarket industry. As one of the leading

companies in their industry, they were the ones who spearheaded the trend for self-service

shopping, which revolutionized the shopping experience for most customers. Although Morrison

Supermarkets have set great leverage for themselves, it is still undeniable that there is an

imminent rise in competitive pressure. This roots from the aggressiveness of strategies and

marketing gimmicks from the competing companies. Rise of technological advancements is also

becoming a threat to the company as people are leaning towards digitalizing everything, even

shopping experiences. The abrupt changes in customer preferences are also something that could

potentially affect the economical standing of the company. The company in recent times facing

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bad financial trend is also due to the decrease in the revenue, operating income and in the net

income (Rhyne, 2009).

Upon optimizing the SWOT analysis and Porter’s Five Forces Analysis to better

understand and get to know the company, the results were conclusive that the company should

better analyze and implement changes in regards to their product mixes. They should also

optimize and pay attention to their human and intellectual capital.

 ANALYSIS AND FINDINGS

SWOT ANALYSIS
SWOT Analysis is a strategic planning tool that can be used by Morrison (Wm)

Supermarkets Plc to elevate its competitive position by assessing situational analysis through

identifying organizations internal and external factors. Here are some of the factors that helps

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 Morrison Supermarket to progress in the market place, be aware of the things to improve and

build its competitive advantage.

1. A clear unique selling point 1. Increasing demand of own product

2. A strong foundation in UK 2. Market for organic products
3. Diversity of business 3. Emerging new market to global
4. Ownership of supply chain, market
manufacturing sites, market streets
and training academy
STRENGTHS OPPORTUNITIES

WEAKNESSES THREATS

1. Lack of convenient stores

2. Limited non-food offering 1. Intense competition
3. No online product scheme 2. Emergence of new and advance
4. Limited geographic coverage technology
5. Staff turnover 3. Consumer preference change

Figure 1: SWOT Analysis of Morrison

WM. Morrison Supermarket PLC is an integrated retail company. Its diversity in business

is a great advantage to compete in market economy. Offering a variety of products gives a

company the upper to its target customer especially that Morrison Supermarket focuses its

market in providing fresh food and organic products. It also operates and manage its own

manufacturing facilities, supermarket and distribution centers making them a company that holds

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a strong foundation in UK. These strengthen the company’s business structure and operations in

some key aspects. Having also a unique selling point benefits the company for they can easily

catch the attention of their customers by providing resilient buying services.

Understanding the area of weakness of a business provides them an overview of the

things that needs to change and improve. The lack of convenient stores can be a weakness for

there are consumers who opt the fast-serving process of convenient stores unlike going to a

supermarket that it takes a lot of time to find the product as well as paying it. Limited non-food

product, no online product scheme, limited geographic coverage, and staff turnover are some

weaknesses that if not addressed sooner can become facets of damage.

Analyzing the external factors of a business like its opportunities and threats must also be

prioritized. The increasing demand of product, market differentiation, and emerging oneself to

the new market is a good opportunity to boost company performance. With these a business can

come up ways to strengthen some aspects of a company. Intense competition, emergence of new

and advance technology, consumer preference change are some threats that if not address as soon

as possible could result to a great loss. That is why having enough knowledge and information

enables a business to sharpen its strategies and transform some disadvantage into profit.

Providing a detailed insight on how to combat outside forces helps a company perform well.

PORTER'S FIVE FORCES ANALYSIS

Porter's Five Forces Framework is another strategic tool for analyzing and understanding

underlying attractiveness of Morrison's Supermarket in terms of profitability. With the used of

Five Forces managers in the company can develop a strategy for enhancing its competitive

advantage and long-term profitability in Retail Industry.

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 RIVALRY
THREAT OF POWER OF POWER OF THREAT OF AMONG
NEW BUYERS
SUPPLIERS SUBSTITUTES EXISTING
ENTRANTS (HIGH) COMPETITORS
(LOW) (LOW) (HIGH)
(HIGH)

• High • Cost relative • Buyer • Product • Differentiation

Switching cost to selling price information differentiation • Exit barriers
• High • High threat if • Buyer volume • Buyer • Number and
Economies of vertical • Buyer price switching cost Size of
scales integration sensitivity competitor
• High Capital • Importance • Industry
requirements of volume to growth rate
supplier/purch
asing power

Figure 2: Porter’s Five Forces Analysis of Morrison

Threats Of New Entrants

Emergence of new entrance is very low. Small business retailers won't be able to compete

from the high production of goods or services to providing large amount of capital Morrison

Supermarket was able to build an effective barrier to safeguard its competitive edge by building

high economies of scales and keeping define its capital requirements by building capacities and

spending money on research and development.

Power Of Suppliers

Suppliers in dominant position decrease a company profit in the market. But due to a

company's strong brand presence, supplier fear the risk of losing their contracts with large

company. In Morrison Supermarket, the power of supplier is low because they are concern to

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meet the criteria sufficient to supply this company. Aside from that Morrison Supermarket was

able to build efficient supply chain with multiple suppliers. They experiment with product

designs using different materials so that if the prices go up of one raw material, then company

can shift to another. And developing dedicated suppliers whose business depends upon the firm

so losing one supplier won't really hurt that much.

Power Of Buyers

Consumers that have high bargaining power manipulate a business by pressuring them to

reduce prices or increase a quality of a product or service offered. Its vast range of choices makes

them dominant. Prices are also highly competitive so buyers can easily switch to other brands

without any loss, especially that Morrison Supermarket don't offer loyalty cards, there reasons is

they emphasize more on pounds not points in there store. So, Morrison Supermarket must take

actions that gives them the upper hand and a lower bargaining power of their buyers by

expanding its target customer, introduce new product, and rapid innovation of new product.

Threat Of Substitutes

Substitutes limit the potential returns of a business. The threat could be high if a

substitute

offers a value proposition uniquely different from the present offering of the industry. To lower

this threat Morrison Supermarket must focus more on service oriented rather be than product

oriented, understand the core needs of consumer rather than what to consumer is buying, and

increase the switching cost for the customer.

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Rivalry Among Existing Competitors

Intense rivalry drives down prices and overall profitability of an industry. Morrison

Supermarket are having a hard time to compete with companies like Tesco, Asda Sainsbury. His

lack in terms of online shopping business, loyalty cards for customer gives Morrison

Supermarket the disadvantage unsteady growth rate. To avoid this Morrison Supermarket must

build a sustainable differentiation and instead of competing with competitors collaborate with

them.

WM. Morrison Supermarkets PLC does achieve its vision given that customer preference

changes overtime. The company's way of positioning their product is seemingly suited to the

people's interest. Focusing to the provenance quality and being a provider of fresh foods to buy is

a sound strategy. Still, Morrison Supermarket has to consider other variables that needs

improvement, whether there is a need to change or adapt and copy rival's strategy to cope up

with the drastic market environment. As well as complying with technological advancement and

addressing the weakness they lack of.

BUSINESS LEVEL STRATEGY

Michael Porter's Generic Strategies are useful framework for organizations to identify

potential niche in which they can gain competitive advantage in any industry. Each strategies

have the potential to outperform competitors but it has been learned that a combination of these

generic strategies aligning it on parity is the most sought strategies. Cost or differentiation

strategy alone cannot withstand a competitive market. According to Which Magazine's research,

among all the supermarkets in United Kingdom Morrison's was the lowest priced superstores in

UK. It supports the stated pricing policy in which a company is prepared or willing to share its

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profit with its customer. Aside from that, the prices of goods in other Morrison stores are

identical to their main stores.

Morrison Supermarkets is also known for its differentiation strategy by offering fresh food and in

house prepared food. Although some of their goods like fruits and vegetables were pre-packed

and bar coded, the reason for that is Morrison company anticipate the possible loss, through

damage caused by self-selection in that part. As Porter mentioned on his work, there's still real

danger to a firm that associates generic strategies because if it fails to achieve any of those

strategies then a company would be stuck in the middle.

CONCLUSION AND RECOMMENDATIONS

In conclusion, organizations must perform at reliable and successful levels in order to

provide the best customer experience. The dilemma for Morrisons’ is that the company has

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become static and there is no growth in market share and increasing it requires the company to

exercise product differentiation which will bring the variety within a product range. The best

significant leg up that the company can go for is a combination of strategy considering the focus

on differentiation of the products and price lowering. This increment in sale will bring the

required revenue for the company which will highly benefit the organization, its management,

and its target market.

Throughout the study it has been seen that the company is not in a good shape though

they have a considerable market presence, they remain unable to cash on those factors. The

results garnered from the SWOT analysis shows how the weaknesses and threats the company is

facing outweighs its current strengths and opportunities. By using Porter’s five forces analysis it

shows how the company should analyze and redraw their product mix as well as other corporate

mixes to advance and best be catered with immediate aid and effect against the corporate crisis

against the high power of buyers, high threat of substitutes, and high range on corporate rivalry.

The Morrison Company is an effective producer of smart tags, yet it should consider

operational changes to remain successful. The company should also pay attention to their human

and intellectual capital as it determines greatly how their day-to-day operations push through and

meet the market demands. Strategies should also surface out of the company’s management

system such as exercising a reward system strategy to boost employee service and premium

cards that grants discounts for loyal customers on special seasons. The management furthermore

must seek to respond to greater advancements in their marketing techniques to maintain the

company’s competitive edge against today’s overwhelming market galore. Adapting to the fast-

pace society and demands of technological shifts and advancements to cover manufacturing,

supply chain, finance, logistics and distribution with flexible resource planning.

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