The Business Environment in Relation to Morrisons - Essay Example

The business environment in relation to Morrisons The business environment comprises of both internal and external factors that challenge the entire business’ operations. A company often faces the external environment comprising of consumer markets, competitors, and interest groups. These stakeholders push for the analysis of PESTLE (political-legal, economic, socio-cultural, and technological) environments (Qin, 2007: 90). The following is an outline of environmental factors in relation to the strengths and opportunities of the Morrisons supermarkets. The details further establish the salient use of the variables in rebuilding the supermarkets’ strategic framework. The company’s factors of success Morrisons has competently claimed its position in the U.Ks retail market through the lead in delivery of quality food and groceries. The supermarket chain has grown tremendously after merging with Safeways Company. Morrisons currently has the capability to make on-point deliveries effectively than the competitors. The outlet discovered that, some of its drawbacks resulted from poor distribution and delivery channels. Therefore, it strategized accordingly, and in the modern day, the company has a neat flow of goods to reach the final consumer via the outlets it established. The company has reduced the overall overheads through the procurement of privately owned transportation means, and outlets. The company enjoys customer loyalty through the delivery of quality goods satisfactorily at the time that the consumer may perceive the need (Henry, 2008: 66). Morrisons Company seeks to deliver value profitably to the consumer for mutual benefits. It first establishes customers’ needs and determines the most pressing that call for immediate attention. The company wins over the competition through intense research to ascertain any changes in the markets and the availability of new markets. Suppliers’ core value to a business is to deliver materials and inventories. Morrisons realized that, their suppliers were incompetent and the costs of sourcing them were relatively high. Therefore, the supermarket has established supply chains thus, resulting to reduced costs of materials and effective distribution of products to its various chain stores. The main factors towards the growth of supermarkets are; customer satisfaction, reduced costs hence considerably low prices, and effective delivery of quality products (Bensoussan & Fleisher, 2008: 68). The supermarket has continuously erected food stores in an attempt to reach all entire market, which still remains inadequately catered for. Through the strategic mission and vision statements, the company propels the set plans and strategies to achieving its goals and objectives. Morrisons’ vision and mission statements express their practices inertly, and more emphasis relates to customer satisfaction. The company enjoys economies of scale by the fast and the effective rate of diversification of investment (Qin, 2007: 90). Through ethical practices, the company experiences drastic increases in the net profit sales. This enables the company to remunerate its shareholders with adequate dividends, an aspect that entices investors to purchase the equities. Although, this may seem profitable to the investor, the grocery stores gain increased capital basis to diversify on their investments (Daft, et al 2010: 68). Political environment Morrison supermarkets spread in the diverse country of Great Britain, with more than 364 branches nationwide. The branches range from Midlands, Scotland, North, and the Southern parts of England. However, the company does not operate foreign markets in spite of the high returns on its investments (Qin, 2007: 90). The company sales casted an after tax profit of $57million after tax profits; hence, it has the ability and capacity to engage in profitable foreign markets for desired returns. The company has strategically repositioned its approach in the market by targeting the grocery market segment above other needs. This propelled Morrisons to rank forth in the competitive U.K consumer market through exemplary performance in economic growth. Similarly, the government 27% expected tax cuts, would stimulate economic growth among businesses; thus, the supermarket stands the opportunity to maximize investments profitably (Seth & Randall, 2011). During such a period of reduced taxes, Morrison’s supermarkets will earn more after tax profits, and be able to diversify faster throughout the country and eventually join the global business village. Morrison supermarkets auger well with the constitution by offering employment at desirable remuneration thus leading to increased incomes. The store comprehends perfectly with the country’s set objectives as it further seeks to reach consumers. The country has more than 24million consumers, and 5 million find it hard to access the stores. Therefore, Morrison supermarkets diversification strategy, aims to meet the demands of the left-out consumers. Variation of tactics and accountability in national growth remain the significant elements, elevating Morrisons to the current position. The company is vulnerable to political oppression since; it abides to the law and focuses on general welfare in economic growth (Applegate& Johnsen, 2007: 55). Economic environment Competition prevails as a norm in the business society, establishing that no particular market is perfect. The chain store company remains exposed to competition from other market players seeking sovereignty. Currently, the company ranks forth in the UK consumer markets, which results from the measures it employed during to recover over economic crisis and a time when costs were inclining. The only way that a company can beat competition relies much on demand and supply variables. Morrison supermarkets ensure a steady cut on overheads, thus maintaining its costs of production and delivery processes (Seth & Randall, 2011: 68). Whenever costs reduce, the company ensures that prices reflect on the costs incurred and not additional costs. Thus, the supermarkets offer the cheap priced but quality produce to the customer. The resulting effect is that, the demand of Morrison’s products increases accordingly at the constant prices. Therefore, the company stands the ability to maximize its output so that, its supply meets demand effectively. Morrison’s unity with the employees has coerced all programs to the organizational performance. The firm ensures adequate remuneration and submission of taxes thus, playing a key role in the economic growth (Qin, 2007: 90). Socio-cultural environment The proper research that Morrison conducted led to tailoring of products to serve the convergent needs in UKs community. Morrison observed that, to cater for the needs accordingly, the company needed to focus on demographic segments and comprehend the ages to establish similarities. Thereafter, the grocery giants established that consumers among the different ages shared similar beliefs and norms that affected their buying behaviors. The company realized that the consumers needed fresh groceries at favorable prices on demand (Qin, 2007: 90). The supermarkets research team established that, the customers wanted value, satisfaction, thus supply, and distribution networks operating under the company’s framework were established. Morrison’s products reach the consumer adequately following the implementation of proper distribution channels. Therefore, the giant grocery outlet enjoys increased profitability following customers’ loyalty to purchase its products. A contributing factor to the loyalty exhibited, follows the company’s zeal to avail quality products and deliver value and satisfaction. The supermarket has intensified in diverse investments targeting to reach all the segments and serve the customers who suffer in accessing chain stores (Kellow, et al 2011: 89). Morrison supermarkets thus serve the needs in all segments accordingly unlike other supermarkets and food stores. Technological factors Technology is paving its way to possess the entire human life following the introduction of digital products. Through technological advances, companies reach consumers precisely and meet their needs with much convenience. Technological advancements tend to pose opportunities as well as threats to- all businesses. Supermarkets in the UK adapt to technological changes and exploit the opportunities profitably (Great Britain, 2005: 78). For example, Morrison supermarkets conducted e-commerce to reach the consumer. The practice enables the consumer to establish prices of different products and vary them to those of the competitors to make a decision. Bearing in mind that, Morrison prices its quality goods cheaply compared to others, chances are that the consumer will place an order upon the products it offers. Morrison supermarkets practice online marketing of products and prompt delivery after order. Legislative factors Different countries abide by different laws and regulations outlined in their respective constitutions. Therefore, businesses procured under each country must as well abide to the constitution. Morrison grocery stores endure on the constitutional and ethical practices in producing and delivering products that are upto the agreed standards by the government of UK. Its operations involve the overall participation of employees and; therefore, the company ensures that their rights remain a major concern for a beautiful co-existence (Kew & Stredwick, 2005: 80). Conclusions Businesses should determine the kind of factors that prevail in their internal and external environments. Therefore, it is harmful for a business to avoid ascertainment of the crucial factors in the environments as negligence may distract operations and eventually result to a stale state (Dransfield & Dransfield, 2005: 67). There is no known market that runs freely from the above factors as perfect market situations are more of tales to phenomenon. Bibliography Dransfield, R., & Dransfield, R. (2005). Applied business: AS level for OCR. Oxford: Heinemann. Kew, J., & Stredwick, J. (2005). Business environment: managing in a strategic context. London: Chartered Inst. of Personnel and Development. Great Britain. (2005). Somerfield plc and Wm Morrison Supermarkets plc a report on the aquisition by Somerfield plc of 115 stores from Wm Morrison Supermarkets plc. London: TSO. Kellow, J., Costain, L., & Beeken, L. (2011). The calorie carb and fat bible 2011: the UK's most comprehensive calorie counter. Peterborough: Weight Loss Resources. Seth, A., & Randall, G. (2011). The grocers the rise and rise of supermarket chains. London: Kogan Page. Daft, R. L., Kendrick, M., & Vershinina, N. (2010). Management. Andover, Hampshire: Cengage Learning EMEA. Bensoussan, B. E., & Fleisher, C. S. (2008). Analysis without paralysis: 10 tools to make better strategic decisions. Upper Saddle River: N.J., FT Press. Henry, A. (2008). Understanding strategic management. Oxford: Oxford University Press. Applegate, E., & Johnsen, A. (2007). Cases in advertising and marketing management: real situations for tomorrow's managers. Lanham: Rowman & Littlefield. Qin, Z. (2007). Introduction to E-commerce. Berlin: Springer Berlin. 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