Business Planning Research Proposal Example | Topics and Well Written Essays - 1500 words

Business Planning - Research Proposal Example The ability of a supplier to drive up prices would depend on the extent to which Morrisons can control this supplier. So far, Morrisons has been able to control a group of farmers producing carrots, onions, potatoes and mushrooms. This view is supported by information from the website that when in season Morrisons gets 100% of its carrots from British farmers, as well as 90% of other food items like onions, potatoes and mushrooms. Harnessing the supply of such food items from British farmers means the farmers have very few markets to for their products. This therefore creates a situation whereby Morrisons can easily determine the prices at which it buys these food items. Hence the suppliers' power to influence the prices is reduced. On the other hand, Morrisons supports and controls the entire market outlet of local and small suppliers. This power exerted by Morrisons can be seen in the information that Kelly's ice cream and Sharpes Eden Ale can only be found in our Morrisons Cornish stores. It therefore shows that these suppliers have limited power to drive up the prices of their products to Morrisons. Buyer power denotes the ability of Morrisons customers to drive down prices. So far, no documented evidence exists on how customers have influenced the pricing of products at Morrisons. Given that Morrisons operates along side other chains like ASDA, Sainsbury, LIDL, TESCO, Somerfield, Waitrose, the customers have variety and choices at their disposal, and can easily switch from one supermarket to the other. However, they can rarely drive down prices. So Morrisons can only have its prices determined if they were dealing with a few powerful buyers who would dictate the terms. Competitive Rivalry The competitive rivalry surrounding the Morrisons business environment is determined by the number and capability of its competitors. Some of these competitors include: Asda, Lidl, Tesco, Marks & Spencer, Netto, Somerfield, Waitrose, and others. If these competitors can offer equally attractive products and services as Morrisons, then Morrisons would most likely have little power in the market. These competitors are many and are likely to strive to provide quality products and services too, such that Morrisons hasn't the tremendous strength to control the market. Threat of Substitutes The ability of Morrison's customers to find substitute products and services from different supermarket chains would determine the level of rivalry between Morrisons and other competitors. As seen above, there are many supermarket chains trading in the same products and services as Morrisons, giving customers a host of choices at their disposal. Therefore substitution for Morrison's products is easy and viable, weakening its power to command the market. Threat of New Entrants Morrison's power in the supermarket business would be affected by the ability of other investors to enter the market. If it isn't so costly, in respect of time and money, to enter the supermarket then it is expected that more of similar businesses would be started and this would increase the strain on Morrisons to loose its leadership role in the market. Going by the number of supermarkets that have set u in the UK recently, including LIDL from Germany, one can tell that investing into the supermarket business is not so costly in terms of time or raising the venture capital. Hence Morrisons faces severe