Morrisons Supermarket: A Company Investigation - Case Study Example

Morrison’s Supermarket: A Company Investigation Contents I Overview Page II Oraganisational Chart Page 2 III Share Price Chart Page 3 IV Current Share Price Chart Page 3 V Pest Analysis Page 6 VI SWOT Analysis Page 7 VII Conclusion Page 8 Morrison’s Supermarket: A Company Investigation Overview: Morrison’s Supermarket has at present 360 stores (Morrison’s, 2006) down from its high 378 in March 2006. Listed as Wm Morrison Supermarkets, it is considered the fourth largest chain of supermarkets in the United Kingdom next only to Tesco, Asda owned by Wal-mart, and Sainsbury’s (Wikipedia, 2006). Morrison’s operate with the strategy of placing more value for money with the slogan “More reasons to shop at Morrison’s” as well as “The very best for less,” (Wkipedia, 2006). Morrison’s website (2006) claims, “Our aim is to provide all our customers with the very best value for money wherever they live, and uniquely, we have always charged the same prices in every one of our large stores.” These are backed up by hundreds of special offers each time (Morrison’s, 2006 and Wikipedia, 2006) from discounts to “buy one take one” topped by the wide range of goods offered from their own label “Bettabuy” and “Farmer Boy” to branded ones such as the overtaken and now defunct Safeway (BBC News, 2005) upmarket group products called “The Best.” Morrison’s is generally acknowledged to cater to “the lower end of the mainstream supermarket sector, offering value above choice and premium quality,” of which executive chairman Sir Ken Morrison was quoted as saying “I don’t know what a middle class shopper is,” (Wikipedia, 2006). Morrison’s manages its own commercial operation in-house from buying, packing, to distributing its fresh fruits and vegetables, meat products and fish, with their own temperature controlled warehouses, meat processing and fleet of transport. The company now employs about 130,000 members of staff in stores, factories, distribution centres, and head office administrative functions. They also enjoy a chunk of about 10 million weekly shoppers with their 360 stores across the nation. At present, the company’s Share Price Chart is as follows: (Source: Morrison, 2006) Its Current Share Price is reported as: Currency: GBpCode: MRW.L Date 04/07/2006 Time Last Trade 17:03 Price 202.00 Closing Price 201.75 Change 0.25 Bid 202.00 Day High 204.25 Ask 202.25 Day Low 199.75 Year High 218.00 Day Volume 13,548,524 Year Low 183.25 (Source: Morrison, 2006) Morrison was founded in 1899 with a stall in Bradford Market selling egg and butter with its founder William Morrison inspired at innovating to lead the way in supermarket retailing. In 1958, the first town centre shop was opened, followed in 1961 by “Victoria” the first supermarket with 5,000 sq/ft of retail space selling fresh meat, green grocery, among other provisions, with a free parking. By 1967, it went public, with the shares over-subscribed at 174 times. 80,000 investors cashed in. In 1971, the Hilmore House head office was opened and by 1976, new produce Cutler Heights depot became operational after taking over Whelan Stores. By 1980, Morrison opened its “Farmer Boy” factory and in 1988, the Wakefield distribution centre opens. In 1988, Erith Greater London store opened and by 1999, the centennial store at 100th opens at Nelson. In 2001, Morrison Supermarket joined the FTSE 100 and by March 2004, it merged with Safeway (Morrison, 2006). Marketing and Communications: Employing the Market Street format that presents skilled butchers, bakers, fishmongers, pizza makers, among other well-versed staff to address its clientele, Morrison have successfully integrated among other marketing strategies a home-based service to its customers. Other stand-out marketing offers include returns for volume orders, and bell ringing announcement of newly baked goodies. Morrison’s maintain its own website for the internet-using consumers, clients and the public that can be viewed at http://www.morrisons.co.uk/default.asp. In its website, it can be gleamed that it employs a lot of marketing and communication tools to reach out to the consumers for its 360 stores from sponsoring major league sports such as football, to maintenance of its own press or media relations office. Information is basically taken cared of to address the public’s concern in the website providing customer service contacts and hotline (Morrison, 2006). Among other things, Morrison’s also addresses its customers by employing well-trained staff to cater to their personal grocer and shopper’s needs besides well-informed customer service representatives in all stores. This has earned Morrison Supermarket the Grocer Magazine Gold Award for Customer Service in June 9, 2006, it’s second in a row (Morrison, 2006). PEST or STEP Analysis: As for most thriving corporations, this study undertakes a PEST or STEP Analysis addressing the Social, Technological, Economic and Political macro-environment affecting Morrison Supermarket which are basically external allowing no control by the firm. This is based on existing researched materials gathered by this researcher from various sources as indicated. As for the social factor, Morrison had to address disgruntled, ill-fated and displaced employees of the Safeway takeover of about 2,000 staff members (Wikipedia, 2006). In another issue, it paid a lumpsum £2,000 to one 78 year-old customer when it slipped and was physically damaged in one of its stores (Irwin Mitchell, 2006). Since these issues are on the spotlight through media coverage, all have a negative impact not only on the corporate image of Morrison but also to its public image. Technologically, with the adoption of a wide-scale operation as presented by the takeover of Safeway, Morrison had to address a more flexible pricing scheme which it had boasted as the same all throughout its previous operations (Wikipedia, 2006). This will eventually cater to the Safeway method of retained managers and employees who had also been adversely affected with Morrison’s uniformed pricing scheme. Although the centralised uniform system and policies may present an easy and convenient management style, the company have to address a timely and variety of needs of its clientele which in the end were handled by the store operations team in every locality. Real time and adept technology would need adopt to these fast-changing factors in the local market and centralised and uniform strategy could slow down strategic operations. As with Economic issue, Morrison’s “shocked the stock market with its […] profit warning(s), largely caused by falling sales at (formerly) Safeway stores.” While it was pointed out that Safeway changed accounting system three weeks prior to takeover as well as inflated books that created a budget deficit of £180 million (Wikipedia, 2006), other analysts attributed the fall with the indifference of Morrison to traditional methods and management strategy employed by former Safeway management (James, 2005). Political issues that need to be addressed by Morrison include the anti-trust policy for owning a huge number of stores with the Safeway takeover, as well as the Greenpeace claim that it has “the worst environmental policy on fish” claiming among others that it is “plundering our oceans and endangering entire species of fish to stock their shelves […] show no concern for which fish species they sell, where they come from, or how they’re caught,” (Greenpeace, 2006). SWOT Analysis: In consideration of the presented existing materials, the following may be attributed for Morrison supermarket when employing the SWOT Analysis: Conclusion: As is the case, this research acknowledges that the slogan value for less as the biggest strength of Morrison Supermarket that caters to a majority of the lower mainstream market. Its presence as well as adoption of small-scale grocer as adopted from its Safeway merger experience allows it flexibility that hopefully would nail its corner turn. As it claims, it remained true to the founder William Morrison’s principle of value, quality and customer service (Morrison, 2006). It’s perceived stiff management style (Hall 2005, Wikipedia, 2006 ) where uniform prices, salaries, policies among other things, employed to all its main office and branch stores is considered one of the greatest weaknesses of Morrison. It was criticised for underestimating the Safeway takeover when it came to management and its refusal to retain senior managers were also emphasized. Other negative factors include limited choice for quality products in its stores. So much as the Safeway takeover presented merger problems, it also gave a huge opportunity for Morrison to expand its market. This has been addressed properly with the adoption of smaller convenient stores called the “Rump” and “Choice” stores. It also presented re-launching opportunities for other or new brands that cater to a wider market. Internal conflicts and traditional management is the biggest threat to the equilibrium of Morrison Supermarket. It’s hardworking, skilled and above-the-line performers may opt to find better pastures as uniformity do not fit aggressive sales and marketing people that usually are the force in a fast-changing market economy. Although it can be maintained that Morrison Supermarket have a long history ahead and can look forward to better days as market share have slowly began to accumulate, it also need to address changes, both inside and out, in consideration of various analysis methods such as PEST and SWOT. Reference: BBC News. “Safeway Disappears after 43 years.” Nov 23, 2005, from http://news.bbc.co.uk/2/hi/business/4463882.stm Greenpeace. “Morrison’s have the worst environmental policy on fish.” March 17, 2006. From http://www.greenpeace.org.uk/oceans/media/pressrelease.cfm?ucidparam=20060317123332 Irwin Mitchell. “Supermarket accident - £2000 compensation.” 2003. From http://www.irwinmitchell.com/RecentWork/supermarket-accident.htm James, Hall. “From Yorkshire Hero to City Zero.” Telegraph/ June 12, 2005. From http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/06/12/ccmorr12.xml&menuId=242&sSheet=/money/2005/06/14/ixcoms.html Letchworthgc.com From Site © Copyright Letchworth Garden City Heritage Foundation 2002. Morrison Supermarket. Website. 2005. From http://www.morrisons.co.uk/default.asp Internet Center for Management and Business Administration, Inc. “Pest Analysis.” Net MBA. 2002-2006. From http://www.netmba.com/strategy/pest/ The UK High Street. From http://www.theukhighstreet.com/Morrisons-Supermarket_L1565/ Wikipedia. “Morrisons.” 2006. From http://en.wikipedia.org/wiki/Wm_Morrison_Supermarkets Read More