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Woollacott, E. (2015). Morrisons 'has the best own-brand products' - AOL. [online] Aol.co.uk. Available at: -own-brand-products/ [Accessed 12 Feb. 2019]. YouGov (2019). Brexit drives Brits to buy British…but only if the price is right | YouGov. [online] Yougov.co.uk. Available at: -reports/2017/04/18/brexit-drives-brits-buy-british-only-if-price-righ [Accessed 23 Feb. 2019].
Student no. 100174033 21 16.Appendix: Appendix 1: Porter Five Force: Bargaining power of Buyers: This is determined by a few factors like substitute products can be found in market, cost of switching choice of products to competitors’ one or is the product differentiated or standard. (Porter, 1979) The bargaining power is high as consumers can choose from several alternatives in the grocery industry. Buyers can then switch to other competitors of Morrisons easily without high switching costs. Moreover the differentiation of Morrisons is not significant as similar categories of product are offered by other grocery stores. Bargaining power of suppliers According to Porter (1979), a supplier is powerful if the switching cost is high, the product is unique or it is dominated by a few companies. There are up to thousands of products, which provided by large number of suppliers, can be found in Morrisons. This lower the bargaining of suppliers as Morrisons can choose their suppliers depending on quality and price. Moreover, with plenty choices of supplier in the grocery industry, the switching cost is relatively low or even no switching cost. Morrisons is having a high bargaining buyer power with its suppliers due to its position of one of the largest supermarket chain in the UK. The Threat of new entrant: The grocery market has been dominated by 4 majors brands which are Tesco, ASDA, Sainbury’s and Morrisons which account for almost 70% (see Appendix 3) The capital investment of new entrants will be extremely high to be competitive with the existing brand. Meanwhile, compared with the new entrants, Morrisons has more experience in operation, better knowledge of the market, established networks with suppliers and distribution channels and better customer service skills. These lower the threat of new entrants. Threat of substitutes: Although there is no substitute for food products, the substitutes of Morrisons could be observed as other competitors in the supermarket chain. Apart from completing with major players, the threat of substitutes is potentially higher in the future for Morrison as the market share of discounters like Lidl and Aldi is increasing. Lidl and Aldi account for 7.3% and 5.3 market share respectively, which is the new high record, in 2018 (Chapman, 2018). In the
Student no. 100174033 22 future, more consumers may switch to low-end supermarkets to save money due to the influences of inflation and stagnating wages. (Butler, 2017) Rivalry among the existing competitors: The grocery retailing industry is extremely highly competitive. Morrisons faces the intense