Business Strategy And Planning WM Morrison Supermarkets Plc - Free Sa

Questions: Task 1: Process of Strategic Planning 1.1 Assess how the business mission, vision, objectives, goals and core competences might inform the strategic planning in Morrisons. Apart from identifying the mission, vision, objectives and core competences of Morrisons, your answer may also consider the competitive pressures, ownership and management, and a general overview of organizational strengths and weaknesses. 1.2 Analyse the factors (barriers or facilitators) that have to be considered by Morrisons when formulating strategic plans for the organization. These could include issues from environmental scanning, challenges related, but not limited, to resources required, targets, stakeholders to be involved, management roles and culture, etc. 1.3 Explain and evaluate the effectiveness of techniques used when developing strategic business plans for Morrisons. Your answer should focus on strategic planning techniques such as BCG growth-share matrix, SPACE, PIMS, Scenario Planning. Task 2: Formulating a New Strategy 2.1 Produce an organisational audit for Morrisons. You should use techniques and academic frameworks such as Capability matrix (analysis of resources competences), Value Chain analysis, SWOT analysis (strengths and weaknesses) etc. 2.2 Carry out an environmental audit for Morrisons. You should use techniques or academic frameworks such as PESTEL analysis, Porters 5 forces, SWOT analysis (opportunities and threats) etc. 2.3 Assess the significance of stakeholder analysis when formulating new strategy. Your answer should identify the key stakeholders of Morrisons and explain the significance of their analysis in the formulation of a new strategy for the organisation. A stakeholder diagram (mapping) can be used to present the stakeholders and their analysis can be carried out using a power/interest matrix. 2.4 Suggest and present a new possible strategy for Morrisons Task 3: Approaches to Strategy Evaluation and Selection 3.1 Analyse the appropriateness of alternative strategies relating to market entry, substantive growth, limited growth or retrenchment or turnaround for Morrisons. Your answer should focus on examples of alternative strategies relating to market entry, substantive growth strategies such as horizontal and vertical integration; related and unrelated diversification as well as limited growth strategies such as do nothing; market penetration; market development; product development; innovation, and disinvestment strategies (e.g retrenchment, divestment, liquidation, turnaround strategies) 3.2 Justify the selection of a most appropriate strategy for Morrisons using a criteria such as suitability, acceptability/desirability and feasibility. Task 4: Implementing a Chosen Strategy 4.1 Assess the roles and responsibilities of personnel who should be involved in strategy implementation for Morrisons. Your answer should consider examples such as top management, middle management, teams, individuals, owners, investors, strategic partners etc. 4.2 Analyse the resources required for implementing a new strategy for Morrisons. Your answer should consider examples such as finance, human resources, time, materials, technology etc. 4.3 Discuss suitable targets and timescales to be considered by Morrisons in the implementation of the new strategy using techniques such the SMART method of analysis. Answers: Introduction Morrison is a supermarket which is ranked fourth in United Kingdom. The legal name of the company is Wm Morrison Supermarkets plc. It was founded by William Morrison in the year 1899. Morrison serves services to child from their birth to age 18. They are also delivering services to family to control domestic violence, alcoholic addiction and drug. Task 1: Process of Strategic Planning 1.1: Mission, Vision, objectives and core competencies of Morrisons The mission of Morrisons is to provide effective services to children as well as youth those are in unpleasant situation and trauma. The services which are given by Morrison provide integrated services to the children and family. This is the highest priority of Morrison to provide equitable treatment to their clients, is the strategic vision of the company. The strategic goals are to build existing programs by developing innovative and funding models to meet their current as well as future needs, to expand their resources by increasing their philanthropic support through increased visibility. Its strategic objectives are to make their business unique in the UK market. The core competencies of Morrison are Tesco and Sainsbury. It offers the online grocery shopping service to the customers. Morrison feels pressure in their competitive grocery market when the owner of the company announced to tie up their business with Ocado, which is an online delivery service. It has fall their busine ss behind their competitors as online shopping is more profitable than direct selling. So their business will be slow to offer their requirements to their customers to do weekly shopping on web. The specialists of Morrison management provide nutrition, dining services and food to their healthcare industries. Morrison offers fresh food to children and family, so their growth rate is high in the market. It is the strength of their business. The weaknesses include investments in research and development (Lorette, 2015; Gates, 2015). 1.2 Factors that are to be considered when formulating strategic plans The process to develop a business the organization has to face various challenges such as the adjustment of both internal and external environmental elements. The internal elements are leadership style, human resource, organization culture, management etc. These aspects are manageable while the external environmental elements are not manageable as the companys CEO controls all the changes in nature, economic condition as well as law of government. The ageing population of Britain is a challenging situation for Morrisons. They have traditionally over indexed on older segments of the population, and in many cases these segments are to be suffered from declines in real incomes. Lack of multi channels outlets is also a challenging situation for Morrisons. 1.3: Effectiveness of BCG Matrix when developing strategic business plans for Morrisons BCG growth share Matrix: In Morrison supermarket, a technique is used for growth in their business, it is known as BCG matrix. This technique will help them to consider the services or products to take decisions regarding their services and products that should be removed as well as additional investments are to be made in order to participate nationally. BCG growth matrix consists of: Question Mark: Morrison does not generate cash as their market share is low. Therefore, the company should analyse to decide if they can merit the investments to grow their market share. Their business requires high investment, since their business has the potential to grow. So, some growth strategies have to be made by the management of Morrison and now the industry is in the position of growth in the market. Stars: Morrison does not fall in this area, as in this area they have high growth rate and high investment is required to compete in the market. Cash Cows: Morrisonss business growth is low and they are having relative market share. So, their investment is also low. Thus, leadership as well as strategies are required for growth. Dogs: Their products have low market share and it reduces the expenditure. So, Morrison has to generate their profit (Nutton, 2015). Task 2: Formulating a new strategy 2.1 Organizational audit for Morrisons SWOT analysis of Morrisons SWOT analysis on Morrison has given a clear picture of the company which points out Strength, Weakness, Opportunities and Threats for the company. Morrison has strong distribution network as well as the best supply chain management. The main goal of the company is to sell fresh foods to their clients. Due to this reason the company monitored the distribution of the products and these make sure that the products are to be delivered on time at the proper place. The market share of Morrison is nearly 12%, so the existence of the company in UK market is high. The weakness of the company is its present location and its products. Due to this reason, they are unable to increase their market share and it affects its financial areas. Another weakness is that the company recalls many products on their quality ground. These recalls will make the customers feel that they are selling low grade and unhealthy products to their customers. This will also hamper Morrisonss brand image. The opportunity of the company is that they have increased awareness among the customers about the use of organic products. Morrisons have an opportunity to cash on this trend as they are selling wider number of organic products. The threat that the company is facing from external environments are that they are unable to increase their market share for a long period of time. The company is holding a market share of 12% where Tesco leads with 30.10%. The reason behind this will be the decreasing brand image of the company. The other threat that it faces is the higher taxation from the government as well as human asset cost (Gretzky, 2015). 2.2 Environmental Audit for Morrisons PESTAL Analysis of Morrisons Political: The profit margin of Morrison will be minimized if the change in government will give an impact on taxation policies. The sale will be affected as the new government has cut down the benefits for customers, as it will result in less spending. Economical: One of the products of Morrisons is meat which gives control over the quality of their food. One of the advantages of Morrisons is that it helps to keep the price of their product low. It helps to increase their economics of scales and to keep the price of the product low. Socio-cultural: The Company has launched a technique to recognize the job profile of the colleagues by providing a National Qualified certificate and they plan to change the lifestyles of the colleagues. By providing gardening equipment to schools they help to maintain the social balance as well as their values in the society. Technological: Morrisons is planning to launch a new advance technology which helps to order the products automatically. This service will attract the customers and will give excellent customer service. Environmental: Morrisons has increased the sales of reusable bags which would maximize their profit along with needed support for global warming. Legal: Morrisons have the policy for energy; it helps to control the pollution. Morrisons also follow the Joint Stock Companies Act of 1862. 2.3: Significance of Stakeholder analysis at the time of formulating a new strategy The key stakeholders of Morrisons are customers, colleagues, competitors, suppliers, investors, communities, government and non-government organizations. Stakeholder analysis is consideration of impact of the stakeholders in the business. This analysis is used in the formulation of marketing strategy of Morrisons. At the time of developing a marketing strategy, a careful consideration to customer stakeholder group is needed. When a strategy is to be planned, it involves the decision making process and the way of interaction with the stakeholders. The power of a stakeholder can affect the failure as well as success of an initiative (Kokemulle, 2015; Lienert, 2015). A stakeholder mapping. Power/Interest matrix: The power/interest matrix classifies the stakeholders with their power and extent to which they show their interest in the actions of the organization. It is important to understand the power and interest of stakeholder. The power/interest matrix shows it. It illustrates the following: High power and high interest of the stakeholder: If a stakeholder has high power and interest then they are considered to be key player. The stakeholders are fully engaged and made possible efforts to satisfy the needs. High power and low interest of the stakeholder: They are involved in the project by communicating regularly with them about how they are wished to be kept involved. Low power and high interest: Stakeholders frequently communicate with the people. Then they get help with the project details. Low power and low interest: Their input is to be monitored for success of project (Mary, 2014). 2.4 Implementation of new strategy for Morrisons The strategic options can be evaluated in terms of cost and benefits. The cost as well as benefits can be evaluated on the basis of suitability, acceptability and also feasibility (Lienert, 2015). The following table shows the new strategies of Morrisons: Criteria Strategic Options Option 1 Organic Growth Suitability It is amiable with the existing strategy of Morrisons and its superstore has experienced the expansion in past. Acceptability Morrisons faces low risk to adopt this strategy as it expands its core business. Feasibility From the stakeholders, the superstore can manage the capital for investment Option 2 Growth by acquisition Suitability This strategy is benefited as in the past Morrisons had experienced acquisition. So the market is to be expanded at the time of recession by the use of horizontal integration. Acceptability It raises medium to high risk as the consideration of stakeholders will be in terms of expected synergies. Feasibility It requires an integration strategy with significant investment as well as capital. Option 3 Establishing online store Suitability This strategy is suitable is suitable to support the objective of corporate growth. Acceptability Medium risk due to increasing the trend of online shopping. Feasibility Online business is easy to launch and it also requires delivering the product as well as supply chain management. Task 3: Approaches to strategy evaluation and selection 3.1: Strategy relating to market entry, substantive growth, limited growth or retrenchment or turnaround for Morrisons: In the case study mentioned above we can see that the founder of Morrisons Company William Morrison started his business with selling of eggs and butter from a stall. Then he opened a small shop in the centre of Bradford that had prices attached to its product and with three check-outs. Year after year this company had expanded its business and by second quarter of 2014 this company has owned 515 superstores and 113 Morrisons M local stores spread across England, Scotland, and Wales. But now the supermarket is undergoing rapid change and it has been affected significantly by economic downtrend, with shoppers increasingly seeking value for money in addition to choice and quality. The Morrison family currently owns around 10% of the company which is less. The prices of the company are now dropping, market share of the company is now eroding, and margins are being to narrowing. So the Morrisons Company needs to implement strategies to cope up with various external and internal pressures of new and other competitive companies. (Betancourt, 2010) To solve this problem the Morrisons Company should try to enter in overseas market. There are various options available for this. These options depend on some factors like risk, cost, and control. Among the entry strategies the simplest form of strategy is exporting by direct or exporting by indirect method. For making the company international this company has to face three issues: Marketing- Company should analyze the market to take decision about which company should they select, which segment to choose, implementation of marketing effort, the way of entering in the market with intermediaries, and also what kind of information would they need for this. Sources- This Company should decide about whether to buy the material or make by its own. Investment and the degree of control- In this they should decide upon making relationship with joint venture, and global partners. (Christiansen, 2010) In the case study we can see that the market share Morrisons Company is now being to erode and prices of the company are dropping. So this company should try to build relationship with joint ventures. A joint venture enterprise can be defined as an enterprise where more than one investors share company ownership and they mutually control property rights and business operations. (Coe, Jones and Ward, 2010) If this company makes joint venture relationship with other company, it would be benefited with the followings- It can share risk involved in the business operations. It can combine its knowledge and technical knowhow needed to operate the business, in order to share it with foreign partners. It can be the only way to enter into a new market. In this way it can get source of other country. (Crainer, 2010) The Morrison Company can adopt diversification strategy for growth, expansion, and risk protection. We can see that The Morrisons Company is running its business only as a food beverage company. But if this company concentrates on diversification strategy they can get competitive advantage over the following factors- This company can get advantages over financial factors by making relationship with joint ventures. By this way this company can increase their profit, lower cost of capital, borrow money for business operations. A positive result of this diversification strategy is can also be seen in the market share of the company. If this company diverse its product to a new product and get new customers, new regions whom it can satisfy, it will automatically increase its market share. Diversification strategy will help this company to make growth. The company can move to new industry, new employee, and new customers. Diversification strategy will also help this company to protect its business from failure. If one product fail to satisfy the customers then it can use its another product. (Flores Romero, 2010) The Morrison Company should analyze their business using product-market strategy to measure their position of business, and to take necessary steps for growth. This company should try the following ways to according to Ansoff matrix- Market penetration- In this strategy the company should try to grow by using the existing products in the existing market. They should try to get new customers in the existing market Market Development- In this strategy this company should try their existing product in the new market. This strategy is to get new customer segment, new region, and new market. Product development- In this strategy the company should try to develop new product in the existing market. The aim of this strategy would be to extend the their new product range in the new market. - In diversification the company should develop new product in the new market. Different products should developed by the supply chain members of the company to meet the customer needs. (Hackner, 2010) 3.2: Strategy for Morrisons using criteria such as suitability, acceptability/desirability and feasibility: Measuring the organizational strategy for its effectiveness, it is extremely important to do a SWOT analysis. The SWOT analysis defines the strength, weakness and threat and opportunity of the company. The strategy of this company should be evaluated according to three criteria- Suitability- The suitability of this company would deal with the benefit of the strategy taken by the company in terms of economy. Feasibility- This strategy would define the resources of the company that it has for the appliance of the strategy. Acceptability- It should be focused on the expectation of stakeholders that should be according to performance outcomes of the company. It mainly deals with return, risk, and stakeholder reaction. (Hunter, 2010) Task 4: Implementing a strategy 4.1: Roles and responsibilities of personnel who should be involved in strategy implementation for Morrisons: For a successful implementation of a chosen strategy all the members of top management, middle level management, individual, owners, investors, and strategic planner have to be responsible. Role and responsibility of top management- The chief executive officer of the Morrisons must have to realize the benefit of the strategy that would be implemented. The CEO should establish a positive climate within the organization. The CEO of Morrisons should ensure that the company has all the unique characteristics that would be needed to implement the chosen strategy. The CEO should have to be involved in making plan. The CEO should be responsible for discussing with executives to make plan. He should evaluate the plan and should give feedback. (The Complexities of Determining Safe Staffing Levels, 2010) Role and responsibility of middle level management- The middle level managers have to actually implement the strategy and follow the instruction given by top level management. The middle level managers of the morrisons are responsible for disclosing the complexity in implementing the chosen strategy. Role and Responsibility of Individuals- The leaders, managers have who have authority for making change in the structure of organization should take the responsibility of implementing change. Change agents of the company should identify the key area for making change and according to that he should implement a chosen strategy. Employees of the Morrisons should also ensure the benefits of the strategy and should work towards implementing the strategy. (Welton, 2010) Role of owner, strategic planner and investors- The owner of Morrisons should analyze the plan and according to that he should support others to implement strategy. Strategic planner would be responsible for giving direction in implementing the strategy. The investors of Morrisons have to realize the benefit of the strategy and support in implementing strategy. 4.2: Analysis of the resources required for implementing a new strategy for Morrisons: Financial requirement- The Morrisons have to ensure that they have enough resources for the implementation of chosen strategy. In the study we can see that the prices of the products of Morrison are dropping. So the earnings are also decreasing. So this company should make a joint venture relationship with other company and borrow money from that venture company if the management feels that they do not have enough money for implementing strategy. Human resource requirement- The human resources of Morrison Company have to show more commitment in implementing strategy, because they are the ultimate person who will implement the strategy. The Morrisons need diverse group of person to work with them. Technological requirement- The Morrison Company needs to change their technology that they were using for the implementation of chosen strategy. It should adopt the new technology for improvement in their business. Material requirement- The Morrisons should decide on the fact that whether making a material or buying a material would be beneficial for them. Time Requirement- Time is a very crucial factor for implementing a strategy. The company needs to the define time frame for implementing the chosen strategy. (Crainer, 2010) 4.3: Suitable targets and timescales to be considered by Morrisons in the implementation of the new strategy using techniques such as the SMART method of analysis: The analyst of a company use SMART philosophy to demonstrate the objective of a company that has to be achieved by the company. SMART helps in guiding the development of the goals. We can analyze the Morrisons by SMART in the following way- S=Specific- The objective is dependent on the vision of a company. The vision of the Morrisions is being different in operating business, and provides better and quality products than ever to the customers. M=Measurable- Measurement or measurable of Morrisons should answers the question of how they will be able to meet customer expectations. In this the objectives of Morrisons would be measured against standard set. A=Achievable- Achievable defines the quantity and quality of persons that an organization have, to achieve the objective of that organization. The Morrisons has very limited numbers of persons for the achievement of their goal. Because of economic downtrend many employees of Morrisons are now giving resignation letter to the management of the company. R=Relevant- In this analysis Morrisons can measure the relevancies of their objective. They should measure the impact of defined objectives on the business. T=Time- Time is the most crucial factor in any business operation. So the Morrison Company should analyze the time and decide when the strategy should be implemented. The management of the company should assess the result of the strategy before end time to check whether any modification is needed to give standard results. (Douglas, 2010) Conclusion: To efficiently manage a business and its processes across the organization it is required to establish efficient solution that can be IT based or it can be an efficient methodology that can accelerate the overall business processes. Here in this case Morison Company have adapted their strategy of making development in their businesses using diversification strategy in which they have put a lots of efforts to prevent the risk and on the other Morison company have adopted their product- market strategy, that made it possible for them effectively sale their product. 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