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MANAGEMENT REPORT

ENVIRONMENTAL AUDIT
TRANG NGUYEN - 5298059

MORRISON SUPERMAKETS PLC.

as well as provides information to identify advantages and disadvantages of the company. the company needs to improve its competitive advantage to continue being one of leading companies in food retail industry. . External environment analysis which includes PESTEL and Porter’s Five forces framework defines key drivers of Morrisons which are technological and economic factors.EXECUTIVE SUMMARY Morrison Supermakets Plc. Besides. technology is also a weakness of Morrisons. Is the UK largest grocery retailer which provides good quality products and services. According to the internal environment analysis including SWOT and Strategic Capabilities frameworks.

one of the largest supermarket chains in the UK. PESTEL. the company needs to have a proper strategy.. 2013). also they are less likely to visit the supermarkets. Morrison Supermakets Plc. . Strategic Capability Analysis have been used to accomplish the aim of this report.000 friendly staffs. PESTEL Analysis . at the moment and in the future. . EXTERNAL ENVIRONMENT 1. prepared in store with the experts (Morrisons Annual Report 2013). Government has cut several benefits for customers so people tend to spending less money in supermarket and this affects to Morrison sales. Besides. . Morrison Supermarkets Plc.’s vision is providing great service with best value fresh foods. (as known as Morrisons) is the British fourth largest food retailer with annual turnover in more than £18 billion with 500 stores throughout the UK.Social: The UK had its biggest baby boom since 1972 as 813. 2013). This report will study and analysis both external and internal environment factors as well as consider how they influence operations and strategy of Morrison Supermakets Plc. EXTERNAL AND INTERNAL ENVIRONMENT ANALYSIS A. there is an creasing demand for organic foods because people have become more health-conscious. INTRODUCTION AND COMPANY’S OVERVIEW To develop sustainably in long term.I. II. Porter’s Five Forces. There are over 11 million customers visiting Morrison’s stores each week and being served by 129. SWOT. There are figures showing a slowdown in grocery market growth because of the Budget Announcement 2014 (Barry.200 births were born in the last year (William. There are more elderly people who tend to eat less than younger generation. Besides of this.Political: Change in Government may cause indirect impacts on taxation policies and reduce the net profit of Morrisons.Economical factor is one of the key factors for Morrisons because it affects directly to customers’ buying behaviour.

2013). However. However. Morrisons has contributed to the reduction in environmental damage by encouraging shareholders to view company’s reports on the website. . there has been an increasing in footprint awareness of the customers. there has been a dramatic increasing in health awareness. Porter’s Five Forces: . there are 36 million people (73%) in Great Britain accessed the Internet every day. This will result in an increase of the costs for supermarkets’ operation. 2013). Another substitute is subsistence agriculture. as well as printing documents on recycled paper (Morrisons Annual Report.The threat of entry: It is quite difficult for a new entrant to enter in food retail industry because it needs a large capital investment to build a strong brand name and be competitive in the market.Environmental: Since the report “Building a low-carbon economy – the UK’s Contribution to tackling climate change” was established in 2008 (Committee of Climate Change. more and more people tend to use organic foods. 2008). This form a path for new entrants entering in an appropriate area and being more competitive in food retail market.Technology is also a key macro-environmental factor for the development of Morrisons. 72% of people who bought goods or services online compared to 53% in 2008. Technology directly influenced the operations and processes of grocery and food retailers in general and Morrisons in particular.The threat of substitutes: A main alternative to food retail is food service. Asda. In 2013. (Office for National Statistics. Moreover. Sainsbury’s which controlled for about 80% of the UK grocery market (Mintel. . Fast-food companies. for the large majority of people. Also. these are just temporary solutions which cannot replace food retail. besides of Morrisons. take-away or eat-in restaurants which are very convenient always have strong marketing campaigns to attract customers who do not have time to buy and cook food at home. 2. Online shopping is increasing steadily. threat of entry can be seen as moderate. there are three giants in food retail market which are Tesco. People and families have farms to provide .Legal: According to Low Pay Commission Report 2013.19 in 2012 to £6. there is an increase in minimum wage for adults from £6. there still are opportunities for potential entrants because they may be supported by a relatively low entry and exit cost.. 2013). in which. Therefore.31 in 2013 (National Minimum Wage. 2013:113). .

000 and efficient supply chain and distribution network as well. with online shopping nowadays. The power of suppliers can be assessed as low.Weakness: Although Morrisons has about 500 stores in the UK but it still has limited geographic reach compared to other big brands such as Tesco. However. Tesco. 2013). Nevertheless. opportunities. it is easier for customers to compare the prices and selected the retail brand. threats of Morrisons has been detailed as below: . the customers are likely to switch to the company which offers a lower price. B. threat of substitutes can be assessed as low. Morrison Supermarkets Plc. Morrisons is absolutely able to negotiate with the suppliers to have the lowest price for the products sold in their stores. . So. INTERNAL ENVIRONMENT 1. SWOT Analysis An analysis of strengths. . moreover.The power of buyers: The bargaining power of customers is considered as relatively high. Moreover. Lidl and so on. weaknesses. the company offers a wide range of branded and private label products and large product portfolio (Morrisons Annual Report. Sainsbury’s. There are many large competitors in food and grocery retail industry such as Asda. . this cannot affect significantly to the food retail industry. There is more and more pressure for Morrisons to secure customers’ loyalty by reducing price because there are a wide range of product s supplying by many retailers for customers to select.Competitive Rivalry: is considered as extremely strong.The power of suppliers: The suppliers for food retailers include food manufactures. tends to provide fresh foods prepared in store. farmers which have a strong relationship with food retail industry. .Strengths: Morrisons is one of four largest food retailers which have about 500 stores across the UK with employee strength of nearly 130.food for their own personal needs. with the current position. . It is obvious that most customers are attracted by low prices and there are only slight different between the products of retail companies. Also. Offering good quality products at low prices is the positive point which plays a vital role for achieving customer loyalty.

.500 stores across the UK with nearly 130. strategic capabilities have been analysed as the below table: Resources . technological applicants are not really efficient in Morrisons stores. Moreover.000 items. .Product range from 30. . 2013).An efficient supply chain and distribution network .000 – 35. it is obvious that there is a link between external factors and internal factors. Morrisons can expand abroad to other countries and start to build an international brand. However.000 trolleys . the Government may change policy in tax and increase manpower cost. in despite of the downturn trend of current economic climate (Soil Association.Morrisons M local stores have Market Street where customers can see and taste the foods in store. Thank) service.Threats: There may be a growth of market share of competitors. 600 lorries and 150. According to the external and internal environment analyses. which is the main target of Morrisons. craft skills and vertical integration through Morrisons’s manufacturing business.Opportunities: There is a significant increase for organic products. Competences There are over 5.Honest and affordable price for everyone.000 skilled and trained butchers. bakers and fishmongers who prepare foods and deliver exactly customers’ requirements. Besides. distinctive .Friendly staffs who provide most appropriate advice and services and HOT (Hello. 2.A distinctive offer to customers which has been focused around fresh food.Sainsbury’s and so on. Strategic Capability Analysis: According to Morrisons Annual Report 2013.000 employees. In addition. the increase in awareness of organic and fresh food in society has created more opportunities for Morrions to develop and sustain their strategy as well as improve their competitive advantages in food and grocery retail market. Offer. . . Threshold capabilities Distinctive capabilities “More of what matters” service: . .The transparency of Morrisons’s supply chain and theirs focus on traditional crafts.

BBC.co. Jeavans. & Scholes.uk/sysfiles/Environment/documents/2008/12/01/BuildingALowCarbonEconomy. Morrisons should invest more in Research & Development which is very important for the company to define and analyse the environment factors properly in each period. Available at: http://www. Finally. Products and services which Morrisons has been providing are not very difficult to be imitated and replaced by their competitors. Exploring Strategy. Thejournal. 9th Ed. Firstly. Morrisons should improve theirs network in term of information technology which has not been well-developed since the concept of Market Street was promoted to the customers. Johnson. A. R. to attract more customers and provide a greater value which can make customers feel more satisfied. the company can have necessary and appropriate adjustments in target and strategy which help company operating more and more efficiently.ie. therefore. investing in technology can help to provide convenient service to the customers as well. Last accessed: 17/11/2013 4.co. K. Although Morrison Supermarkets Plc.pdf . Available at: http://www. the company still needs to invest more in its service. (2013) Recession hits family spending on fresh food [online]. 04th Nov. (2013) People spent less on groceries in run-up to Budget announcement [online]. III. & Whittington. Last accessed: 17/11/2013 3. is in the list of leading companies in this industry. REFRENCES: 1. London: Pearson . Committee on Climate Changle (2008) Building a low-carbon economy – the UK’s contribution to tackling climate change [online] Available at: http://image. Last accessed: 17/11/2013 2.guardian. Morrisons also should invest in employee training to maintain their strategy by improving services and after sale services.thejournal.uk/news/health-24773201. 29th Oct. CONCLUSION AND RECOMMENDATION Today.bbc. Secondly.capabilities of Morrisons are not really specific. food and grocery retail is an extremely competitive market. (2011) The strategic position. C. G.ie/groceries-ireland-budget-1151599Oct2013/#comments. Barry.

pdf.independent. 08th Aug.uk/government/uploads/system/uploads/attachment_data/file /226822/National_minimum_wage_Low_Pay_Commission_report_2013. William. H. Last accessed: 17/11/2013 6.5. p1-33. 2013 [online] Available at:http://www. Mintel (2013) Food Retail Industry Profile: United Kingdom. Last accessed: 17/11/2013 9.ons. Last accessed: 17/11/2013 10.Households and Individuals.com/ehost/pdfviewer/pdfviewer?sid=acd5a5dc-1cc840e7-84e4-d6b7cc80a0ef%40sessionmgr198&vid=6&hid=117 . The Independent. 33p [online] Available at: http://web.7m: UK had biggest population growth in Europe over past year [online]. 7.pdf.ebscohost.html.uk/ons/rel/rdit2/internet-access---households-andindividuals/2013/stb-ia-2013. Last accessed: 17/11/2013. (2013) Now we are 63.html. Last accessed: 17/11/2013 8.aspx?fileticket=whbpEnZUd7A%3d&t abid=1984. Last accessed: 17/11/2013 . National Minimum Wage (2013) Low Pay Commission Report 2013 [online] Available at: https://www. Office for National Statistics (2013) Internet Access . Mar2013.uk/news/uk/home-news/now-we-are-637m-ukhad-biggest-population-growth-in-europe-over-past-year-8751929.com/2013/annualreport/downloads/Morrisons_Annual_Report_201 3.org/LinkClick. Soil Association (2013) Organic market report 2013 [online] Available at: http://www.gov. Available at: http://www.soilassociation. Morrisons Annual Report (2013) Annual report and financial statements 2012/13 [online] Available at: http://www.co.morrisonscorporate.gov.