Strategic Analysis of WM Morrison Supermarkets - Essay Example

? CORPORATE STRATEGY Strategic analysis of Wm MorrisonSupermarkets Strategy is about making winning moves. It provides the joining link that helps tobring together the actions and plans of a company (Grant, 2010, p.4). Wm Morrison Supermarkets Plc or Morrisons is present in UK and is the supermarket chain operator in the country. The company officially operates across UK and Netherlands. Morrisons together with its subsidiaries is engaged in providing a wide variety of products ranging from grocery to gift cards, alcoholic and non-alcoholic beverages, garden furniture and plants.(Wm Morrison Supermarkets plc, 2011). For evaluating the strategic positioning of the company the following features are considered: Industry - Wm Morrisons Supermarkets Plc is one of the largest supermarkets in Britain’s retail industry. It is food retailer primarily in the UK. In January 2012, the supermarket chain Had 475 stores in Britain that ranged in size between 3,000 to above 40,000 square feet. Its subsidiaries are Farmers Boy Limited, a manufacturer and the distributor for food products, Neerock limited which is a meat processor company and many more (WM Morrison Supermarkets P L C (MRW.L), 2012). It positions itself in the market by branding its goods as its “own brand products”. Morrisons also stocks different branded products, ranging from low prices to high prices and obviously different qualities of product. This is a good thing for Morrisons as it offers products for all people who shop at each end of the money spectrum. Competitors – The company faces competition from retailers like ASDA Group Limited, J Sainsbury Plc, John Lewis Partnership Plc, Tesco Plc and Waitrose Plc. According to the report published Retail Week, John Lewis had surged a sales volume of 14.9% that led to ?60.8m due to the Olympic fever. J Sainsbury Plc had entered into a partnership with David Beckham to attract young children (Retail Week, 2012). These strategies increase competition for the company considerably. Morrisons are in a partnership with former England Cricketer Andrew “Freddy” Flintoff. This is helping Morrisons as he is a well-known sporting professional Market – Wm Morrisons Supermarkets Plc is a retail chain company. The market segmentation done by the company includes the consumer section particularly the domestic households which require a constant supply of food products. It also caters to the entertainment and luxury segment by offering goods for entertainment and decorating households. Products/ Services – The products/ services offered by the company include providing fresh as well as frozen foods, groceries like fruits and vegetables, soft drinks, alcoholic drinks like wine and beer. It also provides products for entertainment, baby products, pharmaceutical products, products for the domesticated pets and entertainment products. (Wm Morrison Supermarkets plc, 2011). Strategic capabilities – Strategic capabilities of a firm will denote the activities that will set it apart from its competitors. In case of Wm Morrisons, the company has tied up with two online companies known as Kiddicare present in UK and Fresh direct which is present in the US. This would help the company to enter new market segments in outside areas like in the US. It also included Steve Thompson who was the former internet store manager for Apple, in its board members (Morrisons Supermarkets plc. 2012).. There were other strategic initiatives too like appointing people with adequate market expertise in the retail domain who would help the company in its expansion motives such as Belinda Youngs as the Own Brand Director who would be responsible for enhancing the own label of the company as one leading brand (Morrisons announces four new senior management appointments, 2012).. The company also actively performs in its corporate social responsibilities that help it to maintain a good reputation in the market. It maintains its CSR responsibilities in the form of cutting down its carbon usage, handling its waste products responsibly (MRW Wm Morrison Supermarkets PLC Corporate Social Responsibility, 2012). The company had hired four new personals as the directors heading three new positions and one for internal role. This was part of its strategic capabilities move. The company hired Belinda Youngs as the Own Brand Director who would be responsible for enhancing the own label of the company as one leading brand.ick Collard had been appointed as its Commercial Director,Gordon Mowat was appointed as the Strategy Director who would focus at building the strategic agenda of the company and roll out new plans and Richard Lancaster had been promoted as the Marketing Director in the company to collaborate the marketing and customer service strategy in order to further boost the Morrisons brand (Morrisons announces four new senior management appointments, 2012). The environmental analysis of a company will help in evaluating and gaining competitive advantage for a firm (Lynch, 2007, p.114). Tools such as the SWOT analysis (strength, weakness, opportunity, threat) can help in evaluating the internal and external environment of a company (Thomson & Fuller, 2010, p.88). While strengths and weaknesses comprise the internal analysis, opportunities and treats are for the external analysis. SWOT ANALYSIS FOR WmMorrisonxSupermarkets Strengths - The strengths for the company include its wide presence in the supply chain management. The company is the fifth largest retail stores in the UK which accounts for a large consumer base. This is behind Tesco’s, Sainsbury’s, Asda and Waitrose. The company has a diversified portfolio of consumer products that is also a plus point for the company as it helps to target different consumer segments. The company has built a strong reputation of its products by labeling its products as own branded products and since people have shown a liking for these products. MorrisonsSupermarkets stand in a good position in capturing the customer attention (Wm Morrison Supermarkets PLC (MRW) - Financial and Strategic Analysis Review, 2012). Weakness – The company has limited reach in its spread. It is mostly confined within the UK. The market share of the company has also been lowered since 2005. This was because of the competitor’s growth and also their discount strategies that cost the share percentage of the company. The operating margin of the company sank from 5.77% to 5.51% (Wm. Morrison Supermarkets plc, 2012). Another main weakness for Morrisons is the fact that they do not have an online shopping option, this therefore also means that they do not home deliver products which is giving their competitors an advantage as they do. Opportunities – There are many opportunities that are available for the company. The UK market has shown a growing liking for organic products. As the retail chain focuses in food products and since it is a market leader in this regard in UK, there are chances for the company to explore organic food products in their food sections. The market in UK is growing and this provides opportunities for the company to go up the ladder by exploring new market segments. The company has recently opened more than 400 outlets in UK alone. This will help the company immensely in increasing its popularity for its products. Apart from this, UK consumers have shown a rising demand for own labeled products. The company brands its products as own labeled. This would provide opportunities to the company in expanding its customer base and increasing sales volume of its products (Wm Morrison Supermarkets PLC (MRW) - Financial and Strategic Analysis Review, 2012). Another opportunity is for Morrisons to move into new segments like their competitors, one specific area to move into would be clothing. This is because Asda has its own clothing brand and so does Tesco. This would make Morrisons more competitive. Threats- The company also faces threats from several factors. The biggest threat arises from its competitors who are adopting strategies like reducing the prices. Also, there is a recurring threat of increasing cost of manpower. As the company has chances to expand its manpower cost is also likely to go up. Lastly, the global economy is going through a recession crunch. The recent GDP index of UK has predicted that the economic stability of the country is not very healthy going by the market indicators. There are many opportunities before the company for expansion plans but it cannot realise it if the economy of the country is not strong and supportive enough for its strategies (Wm Morrison Supermarkets PLC (MRW) - Financial and Strategic Analysis Review, 2012). Reference 1. Grant, R. (2010). Contemporary Strategy Analysis, 7th Edition, Wiley 2. Lynch, R. (2007). Corporate Strategy, 4th Edition, Pearson 3. Thomson, N. & Baden-Fuller, C. (2010). Basic Strategy in Context, Wiley 4. Morrisons announces four new senior management appointments, (2012), available at: (accessed on 18 August, 2012) 5. Retail Week, (2012), available at: (accessed on 18 August, 2012) 6. Wm Morrison Supermarkets plc, (2011), available at: (accessed on 18 August, 2012) 7. WM Morrison Supermarkets P L C (MRW.L), (2012), available at: (accessed on 18 August, 2012) 8. Wm. Morrison Supermarkets plc, (2012), available at: (accessed on 18 August, 2012) 9. Wm Morrison Supermarkets PLC (MRW) - Financial and Strategic Analysis Review, (2012), available at: (accessed on 18 August, 2012) 10. Morrisons Supermarkets plc. (2012), available at: < http://targetjobs.co.uk/employer-research/morrisons-supermarkets-plc-insights > (accessed on 22 August, 2012) 11. MRW Wm Morrison Supermarkets PLC Corporate Social Responsibility, (2012), available at: < http://quote.morningstar.com/stock-filing/Corporate-Social-Responsibility/2008/1/1/t.aspx?t=XLON:MRW&ft=&d=293ea0328e9bd2b5 > (accessed on 22 August, 2012) Read More