Strategic Plan And Implementation For Wm Morrison Marketing Essay

This report is focus on developing a strategic plan and implementation for Wm Morrison supermarket Plc popularly called Morrisons. From a report I read on a publication by channel4, I discovered that Morrisons supermarket started way back in 1899 by William Morrison who was an egg and butter merchant with a dream (Channel4, 2009). He opened his first town centre shop in 1958 at Bradford after making his name on the market scene. In 1961 the company converted an old cinema into their first supermarket and called it Victoria. It spanned 5,000 sq ft of retail space selling fresh meat and green grocery with the added lure of free parking. In 1999 Morrisons celebrated its centenary with the opening of its 100th store but the big boom was in 2004 when they took over Safeway to boost their size and competitive strength. Presently they have been placed at the 4th position on the Top 10 list of UK’s supermarket chains. The company’s 382 superstores and 124,000 employees serve over 10 million customers weekly making them gain 11.5% of the market share in the UK grocery sector.

In contrast to the other major UK supermarkets groups like Tesco, ASDA, and Marks & Spencer, its strategy is predominately based on selling fresh food and groceries products at lower prices, and doing so only from large stores, rather than expanding into the convenience store market. They uniquely source and process most of the fresh food they sell through their own manufacturing facilities giving them close control over Provenance and quality (Morrissons, 2010).

In addition, Morrisons is the only one of the big four supermarket groups which does not offer its customers an online shopping service and as a result they have more people serving in store. This gap is one of the major intent of this report and all strategies that will be employed will be geared towards improving their product and services to move them further upward in the UK top 10 grocery chain.

ENVIROMENTAL ANALYSIS OF MORRISONS

The external environment is a key elemental factor that can affect the growth of any business positively or negatively. The key environmental factors that affect the growth pace, Market share, and competitive strength of Morrissons will be addressed in this section of my report with focus on the Industry, company’s portfolio and competitors.

The steps presented in the figure 1.0 are clear indicators of how I strategically carried out an environmental analysis on Morrissons. Further breakdown of these steps is shown in the later part of this report.

STEP BY STEP PROCESS I employed:

Figure 1.0 Step by step process for environmental analysis

The UK grocery industry is highly saturated by four key players (Tesco, ASDA, Sainsbury and my case study Morrissons) enjoying 75.6% of the market share (Tnsglobal, 2009). For this reason, the quest for survival is a continuous process with no player willing to lose out. The competition from rivals and socio-political factors are becoming tougher. Morrissons is presently among the big four with 11.7% market share and maintaining the 4th position on the top 10 UK supermarkets at the moment (Morrissons, 2010). A figure I estimated to be 1:6 the 75.6% total percentage of market share enjoyed by the big four.

SWOT analysis is a tool that helps reveal the factors that would guarantee the success or failure of a business in any given business environment ranging from the industry they belong to the company’s portfolio.

After I carried out a SWOT analysis to evaluate the strength, weakness, opportunities, and threats of Morrissons, my findings where;

SWOT ANALYSIS FOR MORRISSONS

STRENGHT (controllable)

They are Fresh food specialist i.e. sales of fresh foods that meets organic specifications.

Major percentages of their products are owned label products.

They in-house commercial operations

Morrissons has a record of supply chain integrity

They have trained and skill human resources.

They have unique price in all their stores.

Their food manufacturing business Farmer’s Boy achieved ISO22000 international food safety compliance certification

WEAKNESSES (controllable)

They have poor strategic store location as compared with the other big three.

Poor awareness programs for promotions.

Poor accessibility by locals e.g. I have been in the UK for four months now and I have only come across one Morrissons store and it was even at Manchester.

Lack of effective marketing strategy.

They have limited product line

Low market share compared with the other big three

Lack of Patents/proprietary technology

OPPORTUNITIES (uncontrollable)

There is prospect for an increase in demand for fresh food as the campaign for healthy eating increases.

OFT regulations for fair trade could be an avenue for Morrissons to capture more market share.

The expertise of Morrissons’ work force as a result of their improved staff training programs is an opportunity for better customer service.

New technological changes in the industry will boost their products and services.

THREATS (uncontrollable)

Fear of imitation by competitors

OFT new regulations for fair trading may also affect their position presently in the UK grocery industry

Increase in taxation

Changes in demography can affect their sales figure.

Increase in interest rate by investors

Innovations and growth of other competitors is another major threat for Morrissons

The forth coming election could cause a change in government which may cause a corresponding change in present Government regular affecting the grocery industry.

The SWOT analysis in figure 1.1 presents my findings as regard the controllable and uncontrollable factors that affect Morrissons at the moment of writing this report. To achieve further identification of the key influences on Morrissons in the industry I have employed the PEST (Political, Economic, Social, and Technological) analysis and the Porter’s five forces.

PEST ANALYSIS

POLITICAL

Political reforms like the forth coming general election come with new government regulations that may affect and cause a change in Morrissons own plan.

Changes in the standard of operation and fair play by the industry regulatory bodies (OFT).

Restrictions in expansion plan as regulated by the OFT

ECONOMIC

The present fluctuation in global finance has been deemed to be a contributing causal factor for the financial standing of morrissons.

Another factor is Increase in the increase in value added tax (VAT)

Seasonality and weather conditions

Market and Trade cycles

SOCIAL

Feedback from potential customer reveals that Morrissons is not strategically located hence the poor accessibility experienced by customers.

Demography i.e. the population that are potential consumer of fresh food

The life style of such population can also be a factor

Media views about Morrissons can

TECHNOLOGICAL

PORTER’S FIVE FORCES

Porter’s five forces is tool that gave me an insight into the current position of morrissons and gave me a clue on whether or not they can move up the top ten table. It also gave me the idea behind morrissons’ business status.

This analysis assumes that there are five important forces that determine competitive power in a business. They include;

The bargaining power of buyers

Threat of new market entrants

Threat of competitive rivalry from competitors

Power of Suppliers

Threat of new products (including technological change)

Supplier power

Threat of substitute

Buyer power

Barriers to Entry

Degree of rivalry

Social

Legal

Environmental

Political

Technological

Demography i.e. the population that are potential consumer of fresh food and groceries.

Competition legislation e.g. Fair Trading Act and Competition Act.

Employment legislation.

Consumer Protection Legislation e.g. Food Safety Act

Competition from competitors (Tesco, Asda, M&S).

Customer loyalty.

Strategic location of stores.

Political reforms and Government regulations e.g. When a law is passed to reduce the maximum number of stores a firm can own or when or restrictions is made as to demography.

Technological changes in means of distribution and purchase i.e. online shopping and Home delivery

Figure 1.0 SLEPT analysis of Morrisons

My analysis

http://tutor2u.net/business/images/Ansoff%20Matrix%20w500.gif

The success of any business can be greatly determined by the environmental factors it is affected by. The effect could be as a result of the location, competition and Government regulations. So far reports have shown that Morrisons major setback can be traced to poor demography and online shopping services.