In 2004 Morrisons, which operated mainly in the north of England, acquired Safeway, a British supermarket chain which owned 479 stores, mainly in Scotland and the south of England. The acquisition quickly ran into difficulties caused in part by the outgoing management of Safeway changing their accounting systems just six weeks before the transaction was completed A. Objectives of Morrison’s Takeover of Safeway
Morrisons Supermarket aims for sustainable growth as a broad supermarket leader in England as well as for segment leadership. The mission of Morrisons Supermarket, on the other hand, is to secure the growth of its business in a sustainable manner, while at the same time constantly improving the company’s profitability. The strategy to achieve this involves four elements: 1. Striving in order to reach a leading position in attractive markets 2. Focusing on securing a competitive share of the supermarket segments. 3. Working in order to improve the company’s efficiency and cut costs in operations. 4. Continuous growth through selective acquisitions for as long as they are able to create shareholder value. B. Benefits of Safeway Takeover
from its numerous branches situated in the United Kingdom.
· Unique Economies of Scale and Scope in product research and development arising Quality Products owing to heavy emphasis on research
Morrisons Supermarket’s commitment to research & development activities has always been one of its top strategies to remain competitive in the market. · Differentiated Products
Through the production and marketing of differentiated products originating from their research and development activities, Morrisons Supermarket is able to create its own firm-specific advantages.