Development of Strategy Report Sample

Development of Strategy Report

Instructions

1. Your assignment should address the question(s) and stated learning outcomes by drawing on appropriate learning from Modules 1 to 6 of the subject materials.

2. The assignment is an opportunity to demonstrate your learning, including theory and its practical application. To address the question(s) in this assignment, you are to draw from the core materials in the subject notes, prescribed readings and textbooks, and the resources provided in Blackboard, but you should not be limited by these materials.

3. The assignment counts for 30% of your total mark in this subject.

4. The total word limit for this assignment is 3,000 words. You are cautioned that there are penalties for exceeding the word limit, namely a deduction of marks. There will be no penalty if the assignment exceeds this word limit by 10% or less. However, for every 500 words or part thereof beyond the stipulated assignment word limit of 3,000 words, ten marks will be deducted from the total of 100 marks available for the assignment. You must declare the total number of words in your assignment.

5. The Assignment Assessment Rubric provides guidance on the criteria and performance indicators against which your submission will be assessed.

6. Answers must contain original thought and ideas applied to your selected organisation. You must acknowledge, through accurate in-text citation and referencing, any idea supported by or contrasted with the work of another author. Note that academic work created by the use of Artificial Intelligence (AI) online software or a contract cheating website service (a website posing as a ‘study support’ or similar service) and claiming it as your own work, will be subjected to an allegation of academic misconduct investigation per the Student Academic Misconduct Policy.

You are required to produce a board report for new board members on the state of your selected organisation’s current strategy, and to provide reasoned suggestions and recommendations for the way forward for the organisation. Your selected organisation may be of any size or type and be from either the private, public or not-for-profit sectors. You can change the selected organisation’s name to protect its identity if you wish (note this in your report if you do so). Your report is to be composed of three parts:

• Part A — Executive summary and organisation profile, including the current strategy. This is to make certain that the new board members are thoroughly conversant with the organisation and its strategy (ie ‘on the same page’).

• Part B — Analysis of the organisation’s current strategy and an evaluation of its effectiveness.

Evidence is required to support your analysis.

• Part C — Options, recommendations and conclusions for action by the board. This is to convince the board that your options analysis is sound and supports the recommendations for improvements you suggest. Your profile of the selected organisation and outline of its current strategy in Part A is necessary to set up the context for your report. Your selected organisation’s profile is important because it provides the key information that is needed to analyse and evaluate the organisation’s strategy. You may use any relevant content from your Presentation to complete this part of the assignment. (Note: if you use content from your Presentation, ensure that you indicate this in your referencing, for example: Presentation: date of presentation submitted/student no.)

As you work through the report, you may need to adjust the profile of your selected to support your responses. This reflects the iterative nature of strategy development. Also, the profile will be useful for you to answer exam questions at the end of the semester.

Solution

Part A: Executive summary and organization profile

Executive Summary

The following report outlines an in-depth analysis of the strategic development put into place at Morrisons, a leading UK retailer. This report is structured in three primary areas including the company profile and current strategy, analysis and assessment of the current strategy, and recommended options for future growth. Morrisons is in the competitive UK retail sector, providing fresh and affordable food with strong links to British farmers. The business strategy for Management Assignment Expert of the firm has been focused on vertical integration, own supply chain management and optimizing its online & digital capabilities.

Morrisons was established in 1899 and now employs over 110,000 employees working more than 500 stores across the UK. This company is big on farm to fork: it cuts out the middleman (and the costs). Part B performs an in-depth analysis of a the current tactics using different strategic tools like SWOT analysis, Porter's Five Forces, VRIO Framework and BCG Matrix. The strengths identified in the SWOT analysis, such as a vertically integrated supply chain, brand loyalty and sustainability focus are the main points brought to the forefront of this paper. Porter Five Forces analysis indicates the threatening competitive rivalry Morrisons has been facing, but it has also been countering by owning its supply chain and strength in consumer reliance.

The VRIO framework demonstrates that Morrisons operation of its own supply chain is a valuable, rare and inimitable resource. Whilst on the BCG Matrix Morrisons is a "Cash Cow" relative to other UK grocery sector competitors – declining market growth warrants more drastic action. Section C outlines strategic alternatives for the board of directors and makes its recommendations. It suggests Morrisons should strengthen its digital offering from online shopping to home delivery to stay in the game. It also advises supplier diversification to reduce reliance on British agriculture and risk exposure. These initiatives will establish Morrisons as a lasting winner in retail.

1. Corporate Profile and Current Strategy of Morrisons

1.1. Corporate Information

Morrisons, formally Wm Morrison Supermarkets plc, is one of the UK's leading supermarket chains, founded in 1899 by William Morrison in Bradford, West Yorkshire (morrisons, 2024). Originally starting as a market stall, Morrisons has grown into a major player in the British grocery industry. As of 2024, Morrisons operates over 500 stores and employs around 110,000 individuals, making it one of the largest employers in the country (morrisons, 2024). Morrisons is part of the "Big Four" UK supermarkets, along with Tesco, Sainsbury’s, and Asda.

The company operates in the private sector and serves millions of customers every week (morrisons, 2024). Morrisons generates billions in revenue annually, with a large portion of its income coming from its food retail business (morrisons, 2024). In addition to retail operations, Morrisons has expanded into the wholesale market, supplying third-party retailers with food and grocery products.

1.2. Sector of Operation

Morrisons operates primarily in the private retail sector (morrisons, 2024). The company focuses on providing fresh food, groceries, and household goods to its customers. The core business model of Morrisons associated with the supermarket chain (morrisons, 2024). In addition, the same is also diversified into wholesale markets and online retail.

1.3. Primary Stakeholders

Morrisons’ primary stakeholders include

• Customers

The millions of customers who shop in Morrisons stores or online (morrisons, 2024).

• Employees

Over 110,000 employees are working in various roles across stores, distribution centers, and corporate offices (morrisons, 2024).

• Suppliers

Morrisons develops strong relationships with its suppliers (morrisons, 2024)..

• Shareholders

Morrisons is a publicly traded company (morrisons, 2024). It means that shares of the company are available to purchase through stock exchanges like LSE.

• Regulators

The company follows UK laws and regulations, health and safety and environmental impact.

1.4. Purpose and Mission

The priority of Morrisons is to provide the fresh, highest quality nutrition to the consumers (morrisons, 2024). Morrisons focuses on supporting different regional farmers along with save up on the expensive transportation costs and carbon footprints (morrisons, 2024). The company wants to maintain its position as the price leader for a major part of its range, while also being the retailer of choice for fresh quality and sustainability.
Morrisons mission is to provide the best value for customers, by controlling its supply chain 'from farm to fork', with vertical integration at the heart of what it does in order to maintain control over quality (morrisons, 2024).

1.5. Resources

Morrisons is enriched with a strong British heritage. Morrisons has ensured its access to the UK's extensive production facilities of farmers, manufacturing capabilities and skilled staff (morrisons, 2024). This company has its own distribution as well, which will allow them to maximize supply chain efficiency. Morrisons generates billions in revenue from its retail and wholesale business both, thus is financially capable of investing in growth strategies down the line (morrisons, 2024).

1.6. Strategic Alignment

Strategic alignment is achieved by providing a mission statement and clear goals communicated throughout the organization. Morrisons' management stresses improving operations, minimising waste and delivering excellent customer service (morrisons, 2024). Performance indicators and KPIs align with strategic objectives, while employees are trained on a regular basis so that they understand what the goals and values of the company are. Great Leadership cultivates a collaborative culture that ensures all departments work in unison towards company mission.

2. Current Strategy of Morrisons

The current course that Morrisons has taken is to keep the business vertically integrated and to continue competing on prices through it pricing policy while expanding its foot in online (Mkansi & Nsakanda, 2021). Its "farm to fork" initiative allows the company to own, or at least control, a large share of its supply chain which should translate into lower costs and better quality control as well as faster delivery of fresh products to customers. This has been a key USP for Morrisons for many years.

In more recent years, Morrisons has also optimized its online capabilities by revamping its e-commerce platform to make it faster and easier to use, as well as expanding checkouts for online shopping and delivery (morrisons, 2024). Morrisons is working on creating less plastics waste, reducing food waste and becoming more environmentally friendly. In addition, by sourcing a majority of its products locally, Morrisons also remains committed to supporting British farmers as part of its sustainability goals.

Part B: Analysis and evaluation of the current strategy

1. Reflect on internal context of current strategy of Morrisons in support of SWOT analysis

Table 1: Evaluation of current strategy of Morrisons referring to SWOT analysis
(Source: created by the author and information obtained from reliable secondary sources).

2. Review of the external context of Morrisons

Porter’s Five Forces

Table 2: The external context of Morrisons referring to Porter’s Five Forces
(Source: created by the author and information obtained from reliable secondary sources).

3. Value creation and its significance in the current strategy of Morrisons

3.1. VRIO Framework Analysis

The VRIO framework will help in evaluating the resources and capabilities (Beamish & Chakravarty, 2021). The same enables Morrisons to gain competitive advantages.

Table 3: VRIO Analysis of Morrisons
(Source: created by the author and information obtained from reliable secondary sources).

3.2. BCG Matrix

Table 4: Value creation of Morrisons based on BCG Matrix
(Source: created by the author and information obtained from reliable secondary sources).

The BCG Matrix classifies business units or products based on their market growth and market share (Gunasekarage, Luong & Truong, 2020). The core grocery business of Morrisons is categorized as a "Cash Cow". It means generation of “significant revenue” but operates in a “slow-growing market”.

Figure 1: Key concept of BCG Matrix
(Source: Gunasekarage, Luong & Truong, 2020)

The online retail division of Morrisons has been indicated as "Question Mark" with adequate “growth potential” but “low” market share. The wholesale division of Morrisons can be indicated as "Star" with medium growth and market share. In addition, the non-food retail segment is classified as a "Dog," indicating that it has low growth and low market share and may not be a strategic focus for future investment.

Rationale for the Selection of Tools and Analysis of Outcomes

SWOT Analysis is an appropriate tool as it aids in revealing Morrisons' internal strengths and weaknesses (Chofreh et al. 2021). It aims to develop a strategy standing on existing strengths, yet working out the weaknesses. Porter's Five Forces has helped in measuring Degree of Industry competition, Bargaining power of suppliers and buyers, Threat from New Entrants and threat from Substitutes. Morrisons resources and capabilities were evaluated using the VRIO framework. Morrisons BCG Matrix was applied to catalog its business units, split in terms of market growth and market share. This tool highlights areas that need investment which reveals the core grocery business as a "Cash Cow; providing back revenue yet strategic management maintenance.

Part C: Options and recommendations for action by the board

1. Addressing the Issues Identified in Part B

The analysis in Part B highlighted several critical issues facing Morrisons

• Over-reliance on UK Market

Morrisons has a high exposure to the UK market, which makes it susceptible to economic downturns in the market (morrisons, 2024).

• Limited Online Presence

Morrisons has a considerably weaker online positioning compared to peers like Tesco and Sainsbury's, which restricts the grocer in exploiting booming online demand (Macchiavello, Reardon & Richards, 2022).

• Intense Competition from Discount Retailers

Morrisons faces growing competition from discount retailers like Aldi and Lidl, which offer lower prices and are rapidly expanding their market share.

• Supply Chain Vulnerabilities

Despite Morrisons' vertically integrated supply chain, its heavy reliance on UK agriculture leaves it exposed to risks such as climate change and fluctuating agricultural prices.

2. Strategic Options for the Board

Table 5: The strategic options of Morrisons including the severity of each strategy in terms of priority, consequences and implications
(Source: created by the author and information obtained from reliable secondary sources).

3. Recommendations to the Board

Based on the analysis of the options presented, the following strategic actions are recommended for Morrisons;

• Diversify Supply Chain

The impact of supply chain risks can be mitigated by rapidly decreasing overall dependence on UK agriculture (Albors-Garrigos, 2020).

• Expand Digital Capabilities

With the rise in popularity of shopping online, this promises to be Morrisons' primary objective. For Morrisons, investing in an easier to use and improved e-commerce platform is about acquiring new customers and keeping those who already shop online.

• Adopt Competitive Pricing Strategies

Morrisons must play hard in pricing so that it can compete with discount retailers. Cutting operating costs will help Morrisons discount more without shrinking its margins.

• Enhance Sustainability Initiatives

Track record in sustainability provides option to highlight it as a key Continental European strategy to capitalize on increasingly evolving consumer eco-awareness. Focusing on its organic and plant-based offerings will also get it there (Brand, Schwanen & Anable, 2020).

• Invest in Technological Innovation

Morrisons must keep on contributing to technology for more productivity, quicker arrangements, and expanded client experience. In fact, AI, robotics and data analytics could help supply chain management hit a home run with customer satisfaction.

• Consider Geographic Diversification

Its international exposure is a medium-term aim, and it provides sizeable global growth to lower reliance on the UK market.

Reference list

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Beamish, P. W., & Chakravarty, D. (2021). Using the resource-based view in multinational enterprise research. Journal of Management, 47(7), 1861-1877. Retrieved from: https://doi.org/10.1177/014920632199557 [Retrieved on 23 September 2024]

Benker, B. (2021). Stockpiling as resilience: Defending and contextualising extra food procurement during lockdown. Appetite, 156, 104981. Retrieved from: https://doi.org/10.1016/j.appet.2020.104981 [Retrieved on 23 September 2024]

Boons, F., Doherty, B., Köhler, J., Papachristos, G., & Wells, P. (2021). Disrupting transitions: Qualitatively modelling the impact of Covid-19 on UK food and mobility provision. Environmental Innovation and Societal Transitions, 40, 1-19. Retrieved from: https://doi.org/10.1016/j.eist.2021.04.003 [Retrieved on 22 September 2024]

Brand, C., Schwanen, T., & Anable, J. (2020). ‘Online Omnivores’ or ‘Willing but struggling’? Identifying online grocery shopping behavior segments using attitude theory. Journal of Retailing and Consumer Services, 57, 102195. Retrieved from: https://doi.org/10.1016/j.jretconser.2020.102195 [Retrieved on 22 September 2024]

Chofreh, A. G., Goni, F. A., Klemeš, J. J., Moosavi, S. M. S., Davoudi, M., & Zeinalnezhad, M. (2021). Covid-19 shock: Development of strategic management framework for global energy. Renewable and Sustainable Energy Reviews, 139, 110643. Retrieved from: https://doi.org/10.1016/j.rser.2020.110643 [Retrieved on 23 September 2024]

Gunasekarage, A., Luong, H., & Truong, T. T. (2020). Growth and market share matrix, CEO power, and firm performance. Pacific-Basin Finance Journal, 59, 101257. Retrieved from: https://doi.org/10.1016/j.pacfin.2019.101257 [Retrieved on 22 September 2024]

Keiningham, T., Aksoy, L., Bruce, H. L., Cadet, F., Clennell, N., Hodgkinson, I. R., & Kearney, T. (2020). Customer experience driven business model innovation. Journal of Business Research, 116, 431-440. Retrieved from: https://doi.org/10.1016/j.jbusres.2019.08.003 [Retrieved on 23 September 2024]

Macchiavello, R., Reardon, T., & Richards, T. J. (2022). Empirical industrial organization economics to analyze developing country food value chains. Annual Review of Resource Economics, 14(1), 193-220. Retrieved from: https://doi.org/10.1146/annurev-resource-101721-023554 [Retrieved on 22 September 2024]

Mkansi, M., & Nsakanda, A. L. (2021). Leveraging the physical network of stores in e-grocery order fulfilment for sustainable competitive advantage. Research in
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Papanagnou, C., Seiler, A., Spanaki, K., Papadopoulos, T., & Bourlakis, M. (2022). Data-driven digital transformation for emergency situations: The case of the UK retail sector. International Journal of Production Economics, 250, 108628. Retrieved from: https://doi.org/10.1016/j.ijpe.2022.108628 [Retrieved on 22 September 2024]