The main aim of this article is to focus on the SWOT analysis of Morrisons by analyzing the internal and external business environment. For this purpose, the strengths and weaknesses of Morrisons, along with the opportunities and threats, are critically analyzed so the company’s competitive positioning can be evaluated in the market.
If we talk about Morrisons, it is a British grocery business with over 500 locations throughout the United Kingdom. It is one of the country's leading grocery chains, offering a vast variety of food, drink, and household supplies.
Company | Industry | Number of countries | Revenue 2022 | Key operations | Key Competitors |
Morrisons | Retail | 1 (United Kingdom) | £18 billion | Supermarkets, Online Grocery, Wholesale | Tesco, Sainsbury's, Asda |
Over the years, the organization has continuously generated high sales and profits. The success of Morrisons can be largely attributed to the variety of products it offers, which appeal to a wide range of customers. Morrisons corporate has also been able to properly manage its costs, allowing it to remain competitive while retaining excellent profits.
The implementation of the efficient supply chain can have a positive impact on the Morrison’s stock price, and luckily the company has been able to achieve this through its effective supply chain management. The corporation has made significant investments in its supply chain infrastructure, including logistics and distribution networks. Morrisons' supply chain is one of the most efficient in the UK retail sector, allowing the company to keep costs down while maintaining its competitive edge. Verdict Retail has claimed that the efficient supply chain of Morrisons has been a great point of difference for the company.
Morrisons has also made significant investments in technology to improve the efficiency of its operations, such as self-checkout systems, electronic shelf labelling, and data analytics. It has been stated by Retail Week that Morrisons is investing in machine learning to improve the performance of its ambient and long-life items (about 26,000 SKUs), with an emphasis on innovative short-life products to come.
Morrisons is devoted to sustainable practices, which are evident in its sourcing, packaging, and waste management strategies. The company has set high goals for lowering waste, increasing the usage of renewable energy, and reducing its carbon footprint.
Source: Morrisons
Morrison's predominantly operates in the United Kingdom, limiting its potential client base and growth opportunities in comparison to worldwide competitors. This lack of worldwide visibility may also restrict access to suppliers and relationships.
Source: Ocado Group
Morrison's corporate strategy relies primarily on physical storefronts, which can be costly to operate and are sensitive to changes in consumer behavior, such as greater internet purchasing. This reliance also restricts the company's capacity to reach out to new clients in locations where physical storefronts are not practical. Statista highlighted that the company’s sales performance was highly affected because of its lack of online performance, as the sales declined by 3.9%.
Source: Statista
Morrison's product selection is constrained in comparison to rivals, which may put off some customers looking for more options. This may also hinder the company's capacity to target specific markets and distinguish itself from competition. However, the company provides some of the offers to its customers. For instance, Morrisons top offers include WIN VIP Ticket to Eurovision.
Morrison's has few company ties, which may hinder its ability to harness their resources and reach new customers. This lack of cooperation could also restrict prospects for innovation and make it more difficult for the business to adjust to shifting market trends. Morrisons has been working with its strategic partners, such as suppliers and logistics.
However, Brexit issue in the UK has hindered it and caused a decline in Morrisons stock price.
Source: Financial Times
Morrison's digital capabilities are inadequate in comparison to competitors, which may limit its ability to reach customers in the growing online market. The company was able to increase its sales after partnering with Amazon by offering both in-store and online capacity. However, limited digital capabilities still remain a weakness as competitors like Tesco have more market share gains.
Source: Investors Chronicle
Morrisons may take advantage of the growing online retail market by increasing its online visibility and optimizing its e-commerce operations to serve a larger customer base. With online grocery shopping projected to increase further, Morrisons may benefit from investing in digital capabilities to remain competitive in the industry.
Source: Global Market Insights
Morrisons may separate itself from competitors and attract a more health-conscious client base by offering a selection of plant-based, organic, and locally sourced products. This is also reflected in the Morrisons slogan "Food, More of what matters".
According to Healthy and Sustainable Diets: Consumer Poll, a majority of consumers (63%) expressed the desire to make their diet healthier, with 68% of respondents stating they would like to increase their consumption of fruit and vegetables, while 61% indicated their intention to lower their calorie intake.
Morrisons can adapt to changing consumer preferences and behaviors by analyzing data and incorporating customer feedback into its product offers and marketing initiatives. Morrisons can respond rapidly to shifting trends and retain customer satisfaction by remaining flexible and adaptive. For instance, coca cola offers Morrisons a range of products so it is able to keep up with the latest changing trends and preferences of the consumers.
Source: Think with Google
In order to broaden its customer base and revenue sources, Morrisons can look at options for international growth. If we talk about Morrison’s current strategy, it can tap into unexplored markets and boost its client base by partnering with established vendors or opening locations in new markets. Retail Gazette states that Morrisons has broadened its international wholesale market by partnering with British Corner Shop, an international grocer.
Customers' shopping experiences can be improved by technological improvements at Morrisons. Morrisons may use technology to improve convenience and increase customer pleasure, from personalized recommendations to self-checkout and mobile payments.
Furthermore, Morrisons may use data analytics and artificial intelligence to optimize its supply chain and inventory management, resulting in cost savings and enhanced efficiency. According to McKinsey, to meet evolving customer expectations, retailers are expected to incorporate advanced analytics and physical technology into the shopping experience.
Source: McKinsey
Morrisons faces fierce competition in the grocery industry from both established players and new entrants. Morrisons must focus on differentiating themselves through product offerings, customer service, and price competitiveness in order to remain competitive.
Source: Statista
Economic uncertainty and volatility can have an influence on consumer spending and grocery demand, reducing Morrisons' stock price, sales and revenue. Furthermore, inflation and currency changes can raise input costs and reduce the company's profitability. According to The Guardian, the rate of inflation in UK supermarkets has risen sharply, approaching 15%, resulting in an average increase of £682 per year on grocery bills.
Regulatory and legal pressures can raise compliance costs and have an influence on Morrisons' operations. Noncompliance with regulations can result in fines, penalties, and reputational harm, all of which can harm Morrisons' financial performance.
Morrisons' traditional brick-and-mortar retail strategy may also be threatened by disruptive technology and business models. Morrisons' operations may be affected by e-commerce and digital retail platforms, necessitating the company's investment in digital capabilities in order to remain competitive. According to McKinsey, some leading grocers are repurposing their stores as fulfillment centers, maximizing the use of their existing assets instead of investing in new ones to address such challenges
Source: McKinsey & Company
Natural disasters and supply chain disruptions can also have an impact on Morrisons' operations, resulting in stock shortages and supply chain interruptions. Morrisons corporate must have strong supply chain management practices and contingency plans in place to ensure business continuity in the case of unforeseen catastrophes to minimize these risks.
It is stated by McKinsey that in 2019, a relatively calm year, losses incurred globally from natural disasters such as earthquakes, floods, and fires amounted to $150 billion.
Source: McKinsey & Company
Strengths
| Weaknesses
|
Opportunities
| Threats
|
Morrisons' strengths, in conclusion, are its strong financial performance, efficient supply chain, innovative technology, and sustainable practices. However, it has limitations such as a restricted geographic footprint, reliance on physical storefronts, a limited product range, limited strategic collaborations, and limited digital capabilities.
Morrisons has the potential to increase its online retail market, satisfy rising customer demand for healthy and sustainable food through Morrisons slogan, and respond to changing consumer behaviors and tastes, and capitalize on technological advancements. Morrisons' future competitiveness and growth will be reliant upon addressing its weaknesses and capitalizing on these opportunities.
Morrisons
annual turnover 2021 | Statista. (2022, March 29). Statista.
foodmanufacture.co.uk.
(2016, May 6). Morrisons’ supply chain is ‘a key strength’: analysts.
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Morrisons is innovating around customers. Retail
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Plc, M. (n.d.). Planet.
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Eley, J. (2019,
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shares hit despite Christmas sales growth. Financial Times.
Rethink supermarkets
and start with Morrisons. (2021, February 11). Investors’ Chronicle.
Wadhwani, P., &
Gankar, S. (2020). Online
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Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share
& Forecast, 2020 – 2026. In Global Market Insights Inc.
Healthy and
Sustainable Diets: Consumer Poll. (n.d.). Food
Standards Agency.
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Allen, E. (2023). The shift in shopping: The data that reveals the permanent
changes to U.K. consumer behaviour. Think
With Google.
Nazir, S. (2022, July
25). Morrisons
expands global wholesale reach with new partnership. Retail Gazette.
Rebooting retail:
How technology will shape the future of retail. (2020, June 8). McKinsey
& Company.
Armstrong, M. (2019,
August 20). The state of the UK
supermarket landscape. Statista Infographics.
Wearden, G. (2022,
November 8). UK grocery inflation hits 14.7%; recession looms as housing
market weakens – as it happened. The
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