Morrisons Supermarket Essay

1253 words - 6 pages

Hand-in Assignment

Introduction
A supermarket business founded by William Murduch Morrison back in 1899 starting as a wholesale egg merchant, then changed into a retail organization after becoming a private limited company. The company’s breakthrough happened during the 1960’s when Morrison’s first supermarket was opened, then followed by two other supermarkets, and during that period the Morrison’s ‘M’ logo was designed. More business grow occurred by the acquisition of Whelan Discount Stores and the development of new headquarters and other facilities, the business grew until to a point where the warehouse and distribution centre has become too small in the 1980’s, where the decision ...view middle of the document...

Product development can bring new choices to customers such as online retail and home delivery (e.g. Ocado). Diversification can bring more lines in the business such as the addition of clothing, electrical and other services (e.g. Sainsbury).
Porter’s Five Forces
Porter’s five forces help in analyzing and understanding the competition from external sources and the internal threats (Slack and Lewis, 2009).
The suppliers’ power is relatively low in the case of Morrison since they control their own supply chain and are mainly based on vertical integration. Besides that, the external suppliers are numerous and it is not a big issue for Morrison to switch suppliers.
The buyers’ power in this industry is always high and sensitive. It is easy for the buyers to switch mainly because the products in different supermarkets are very similar. Buyers are also sensitive to price and always seek for value. Products such as loyalty cards and promotions can also play a role in customers switching stores.
Rivalry in the industry is above medium, there are many competitors but on the other hand the industry can also be considered oligopolized since ‘the big four’ supermarkets hold 76.4% market share (Tesco 29.9%, Asda 17.5%, Sainsbury’s 16.7%, and Morrisons 12.3%) in January 2012 (BBC, 2012). Mainly the supermarket industry growth has become steady and little differences in product.
Threat of substitutes, when we are talking mainly about obtaining grocery, there are few substitutes, very few people buy or get their grocery from farms or other means beside the supermarkets. There is a population that would choose convenience stores at times, but then again, many of the convenience stores are now owned by the giant supermarkets such as the likes of Express Tesco.
Threat of new entrants can be considered low when it comes to new entrants due to huge capital requirements and economies of scale, the entry barriers are very difficult to sidestep, especially gaining market share and compete the ‘big fours’.

Marketing Strategies
Marketing Mix can be helpful in defining the choices and strategies the organization can take, the 4Ps (Product, Place, Price, & Promotion) can be used to evaluate the marketing strategy at Morrisons as a whole business using the available data (Kotler and Keller, 2006).
Product: with more than 27,000 lines at each store, Morrisons provide a wide range of products to the customer depending on store size and location, with some products meeting specific local tastes for e.g. regional beers (Williamson et al, 2004).
Place: until 2004, most of Morrisons stores were located at the north of England, after the acquisition of Safeway in 2004, Morrisons stores expanded all over England. Many of the stores were located nearby major roads (Williamson et al, 2004).
Price: according to researches by journals from Which? magazine in 1996, a...

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