Compare organic and inorganic growth for morrisons


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Compare organic and inorganic growth for morrisons

  1. 1. Compare Organic and Inorganic growth for Morrisons. Evaluate the best possible method ofgrowth 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 andbuilding the facilities from scratch, whereas inorganic growth is attained through the acquisition ormerging of companies. Morrisons has its own ingrained flavour of strong corporate culture that canbe easily adopted by its staff. Thus this could mean potential new staff will easily buy into theMorrisons ideals.Morrisons has excellent worker fringe benefits and work policies (Evidence C), meaning that they arelikely to be highly motivated. This will mean that new acquisitions through horizontal verticalintegration will mean less people will reject working for Morrisons. This could mean faster growth ispossible as Morrisons wants to eat up as much of the shopping market as possible (ASDA andSainsbury), as they have international branches. Also, due to the recession many small business mayfail and thus new busiensses can be bought cheaply expansion can quicken. However, workers mayfeel attached to their old bosses and companies if it had a strong culture. Furthermore, Morrisonshostile takeover will be confronted by the British Media as well as the local populace. Their CSR in Gmay not be enough as their intentions remains clear to take up more market-share regardless of thecost.Morrisons also needs to understand that their changes in bosses will affect the hierarchy of thebusiness and therefore, if the chain of command is weakened through this aggressive expansion, itmay become a difficult business to control as there are simply more people to control. Through the20 years of Sir Ken, for the majority of the time, he has expanded through organic growth, hisacquisition of Safeway led to the anger and resentment of Safeway consumers and thereforeMorrisons 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’sdesired grab of market share. With Ken Morrisons gone, this may be a good thing for Morrisons. Andbecause 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 organicgrowth may not be enough to sustain that. They have saved a lot of money from the recession andsince TESCO, ASDA and Sainsbury are recovering, buying up retailers is Morrison’s best bet to fastgrowth. Morrisons has good worker benefits and therefore should not serve as a problem. I believethat there are experience bosses to handle expansion, and therefore as Morrisons needs a surge inmarket share, Culture can be a matter solved later and Ken Morrisons can appoint a new boss thatfits the culture. Right now, its war. Morrisons needs to gain as much ground as possible and simplythis 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 penetratenew markets. Sustainability is another question, and with big gains there are big risks, and thusMorrisons must be strong enough to face the music when the drawbacks of rapid expansion comeback. But for the time being, to achieve their obejctves, they need to expand mostly throughinorganic growth and thus through horizontal integration. They will gain market share and growth.