Case ANALYSIS of Morrisons Grocery Retailer
Course: MBA Full-Time
Module: MBA 4059 Strategic Management and Marketing
Tutor: Tom Patilo
Student No.: 0810354
The University of Bolton, RAK
Submission Date: 31. 05. 2009.
II. Morrisons Analysis
A. Morrissons Structure, Culture, Leadership and Performance
B. SWOT, Core Competencies and Competitive Advantage
C. Marketing Mix
“The greater the risk, the bigger the win!” is a well known rule practiced by exceptional leaders in the world of business. Morrisons chairman, Sir Ken Morrison, did just that when strategically deciding to acquire Safeway. After a period of trials and tribulations, as expected with any acquisition, Morrisons rose to become successful as the UK’s fourth largest grocery retailer. Benefitting from UK grocery-retail trends including space expansion and increasing sales and market size, the “Big Four”, Tesco, Asda, Sainsbury’s and Morrisons, held a significant 75% share of the total grocery retail market in the UK. What Morrisons had not taken advantage of was format development and sales growth of non-food sectors; instead, they remained a single format superstore offering food lines only. Apparent change of consumer trends from value to quality was noted. However, price continued to be a consumption priority as the UK sank into a recession.
Through a series of management and marketing theories and frameworks, this essay will analyze: Morrisons structure, culture and leadership as these factors affected their business performance pre and post acquisition; their strengths and weaknesses applied to the external environment with existing and potential opportunities and threats, core competencies and competitive advantage; as well as their marketing mix.
II. Morrisons Analysis
A. Morrisons Structure, Culture, Leadership and Performance
Structure, culture and leadership significantly impact and ultimately dictate a company’s performance. The following paragraphs will distinguish the extent to which each factor positively or negatively affected Morrisons in years prior and post acquisition.
Morrisons structure can be described as corporate governance, managed by a board of executive and non executive directors (Tricker, 1994; De Wit and Meyer, 2004) including the company’s Chairman, Sir Ken Morrison and later Sir Ian Gibson, CEO-Marc Bolland, Group Retail Director, Trading Director, Finance Director and four other non-executive directors (1).
Another way of explaining Morrisons corporate structure is through a concept developed by Mason (2003), the “leader-driven” structure that entails the explicit selection of a proactive directional strategy by the company’s leader, in this case Sir Ken Morrison’s strategy of growth by acquisition.
Following their acquisition of Safeway, Morrisons went through re-structuring in their Finance Department. In the wake of the unexpected profit warnings, their Finance Director, Ackroyed, plus two others had resigned or were forced to resign, as implied by information given in the case. The company struggled with Safeway’s accounting system, failing to retain the majority of Safeway’s head office employees and the effect on their performance was considerable.
The second contributing factor to their lower than expected performance (in relation to structure) was the poor performance of the acquired Safeway Compact Stores. Being a single format superstore, Morrisons simply had no experience and know-how of managing this type of store.
Culture, as the foundation of an organization, is the key to successful performance. Similarly, pre-acquisition, Morrisons’ hospitality, great value for money and tradition resulted in a positive perception by their customers as a trustworthy and honest grocer. Change by acquisition caused inconsistence, as not enough attention was...
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