Wm Morrison Supermarkets Plc or Morrisons, as it is commonly known, was founded by William Morrison in 1899, and is now led by his son Ken Morrison. From an egg and butter stall in Bradford, the company developed into market stalls until 1985 when a small store was opened in the town center. From 1958 to 1967, Morrisons kept on developing and went public in 1967.
In March 2004, Morrisons took over Safeway creating a new force in the UK food retailing market. Morrisons is currently in the midst of the acquisition process of Safeway. This would be a long-term process and according to a Mintel report , the customer hasn't yet linked the two brands. With this acquisition, Morrisons is the new force to be reckoned with in the UK retailing environment behind the three giants, with 13.1% of market share.
The main strength for the group constitutes its continual focus on quality and value, while remaining competitive on price. The Morrisons supermarkets, according to the same Mintel report, are renowned "for their no nonsense, no frills approach to retailing". Moreover, Morrisons has enjoyed a strong financial record since its listing on the stock market in 1967. Morrisons also got its own strong brand reputed for its quality and value.
"The board of Safeway continues to believe that a joint venture with Morrisons represents an opportunity to create a new dynamic force in UK food retailing", said David Webster, Safeway chairman.
The acquisition process of Safeway require lots of expertise and experience. There is currently some debate regarding the future of Morrisons and its ability to merge the Safeway outlet into the group.
[...] The following figure from the book ‘International Business', 2nd edition, from Stuart Wall and Bronwen Rees, represents the different options for Morrisons to penetrate the Chinese market. Taking into consideration the previous analysis of the country we want to get in, the joint venture partnership seems to be the best fit for our company. We will then analyze this option for our case. Figure7. Market entry strategy (Source: International Business, 2nd edition Stuart Wall Bronwen Rees, Prentice Hall, Financial Times p.313) 4.2 The Joint Venture Stuart Wall defines Joint Venture as the creation of a new identity in which both the initiating partners take active roles in formulating strategy and making decisions. [...]
[...] With this acquisition, Morrisons is the new force to be reckoned with in the UK retailing environment behind the three giants, with of market share. Figure1. UK top ten food retailers' market share (Source: Mintel report Food retailing UK November 2004) Morrisons in numbers more than 450 stores in UK equipped with petrol stations 4th largest supermarket chain Annual turnover of billion 10 million customers a week of share in the UK grocery market and one of the fastest growing supermarket chains more than 150,000 employees working in stores, distribution centers and head office administration functions (Source: student pack from Morrisons, http://www.morrisons.co.uk/165.asp ) 1.2 SWOT analysis of Morrisons In order to present the company's strengths and weaknesses, the SWOT analysis will be examined. [...]
[...] The plan could be implemented in January 2006 as the market scenario is ripe for Morrisons to penetrate the Chinese retailing sector The budget plan This brief budget overview will give an idea of the money involved for this project. Three main steps would be taken in considerations such as: 1. Research, Identification and selection 2. Negotiation and agreements 3. Operational cost Research, Identification and selection Market research . £3000 (Chinese food retailing market, market shares, grocery, supermarkets stores) Market monitoring (local agency) . [...]
[...] Since China is also a member of the WTO, the wish to improve its capacity to pay is also a part of the requirement. Chinese capacity to pay is improving and is poised to get better on a short/medium term period. Caveats As said earlier, China is improving its business environment and tries to be even more open to international trade. A country which was really protectionist is now opening its market to foreign investment by liberalizing its market. The 12 C analysis gave us some more information on the country. [...]
[...] 2.3 China 12 C Framework analysis In order get a general overview of the chosen country, I will now use the 12 C framework analysis and apply it to this country. Country 1.3 billion people 37% of this population is urban China's total country size: 9,597,995 WTO member since December 2001 Growth rate average for the last ten years: China is the 6th biggest global economic power Currency The Chinese currency is the YUAN or the RENMINBI Here is a table of the value of the YUAN over the years compared to the $ and the Date YUAN $ Table9. [...]
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