1. Compare Organic and Inorganic growth for Morrisons. Evaluate the best possible method of
growth and its implications. Which would be the most advantageous to Morrisons? (30)
Organic growth is growth attained through opening up new stores or shops in new areas and
building the facilities from scratch, whereas inorganic growth is attained through the acquisition or
merging of companies. Morrisons has its own ingrained flavour of strong corporate culture that can
be easily adopted by its staff. Thus this could mean potential new staff will easily buy into the
Morrisons ideals.
Morrisons has excellent worker fringe benefits and work policies (Evidence C), meaning that they are
likely to be highly motivated. This will mean that new acquisitions through horizontal vertical
integration will mean less people will reject working for Morrisons. This could mean faster growth is
possible as Morrisons wants to eat up as much of the shopping market as possible (ASDA and
Sainsbury), as they have international branches. Also, due to the recession many small business may
fail and thus new busiensses can be bought cheaply expansion can quicken. However, workers may
feel attached to their old bosses and companies if it had a strong culture. Furthermore, Morrisons
hostile takeover will be confronted by the British Media as well as the local populace. Their CSR in G
may not be enough as their intentions remains clear to take up more market-share regardless of the
cost.
Morrisons also needs to understand that their changes in bosses will affect the hierarchy of the
business and therefore, if the chain of command is weakened through this aggressive expansion, it
may become a difficult business to control as there are simply more people to control. Through the
20 years of Sir Ken, for the majority of the time, he has expanded through organic growth, his
acquisition of Safeway led to the anger and resentment of Safeway consumers and therefore
Morrisons has had bad experiences with growth through horizontal vertical integration. However,
new bosses may change that, as it is required of the retailing business to be aggressive in expansion,
the new bosses are expansion veterans that I do believe have the experience to get Morrisons it’s
desired grab of market share. With Ken Morrisons gone, this may be a good thing for Morrisons. And
because of failure in the past, Morrisons may turn out to improve where they had fallen back before.
Furthermore, Morrisons has the money to do it, so they should rapidly before the big 3 recover.
In conclusion, it comes down to what Morrisons want. They want rapid expansion and simply organic
growth may not be enough to sustain that. They have saved a lot of money from the recession and
since TESCO, ASDA and Sainsbury are recovering, buying up retailers is Morrison’s best bet to fast
growth. Morrisons has good worker benefits and therefore should not serve as a problem. I believe
that there are experience bosses to handle expansion, and therefore as Morrisons needs a surge in
market share, Culture can be a matter solved later and Ken Morrisons can appoint a new boss that
fits the culture. Right now, its war. Morrisons needs to gain as much ground as possible and simply
this maybe the best chance they will get to give the big 3 a scare.
I wholeheartedly believe that to achieve its aggressive growth objectives, it must expand penetrate
new markets. Sustainability is another question, and with big gains there are big risks, and thus
Morrisons must be strong enough to face the music when the drawbacks of rapid expansion come
back. But for the time being, to achieve their obejctves, they need to expand mostly through
inorganic growth and thus through horizontal integration. They will gain market share and growth.