In March 2004, WM Morrisons PLC completed the takeover of Safeways with a ? 3bn offer of cash and shares, this deal instantly made Morrisons a nationwide company and the 4th largest retail supermarket in the UK with its total store count jumping up from 199 to 403 currently, after the purchase of stores from the Somerfield/Cooperative group. With “every week 9 million customers pass through our doors and 124,000 colleagues across the business work hard each day” Morrisons (N/A), this is a far cry from its humble beginnings in 1899.
In 1899 William Morrison, an egg and butter merchant, started he’s selling from he’s stall in Bradford Market. Jump forward to 1958 and William Morrison’s son Ken, company chairman from 1958-2008, took control of Morrisons, from he’s ailing father, and moved the company from market stalls and opened a small town centre shop in Bradford the first of its kind in Bradford to offer self service and have products are priced. In 1961 Morrisons opens its first ‘supermarket’ converting a cinema in 5,000sq ft of retail space.
By 1967 Morrisons becomes a public company after significant growth and expansion, with the share offer being oversubscribed with more than 80,000 investors trying to purchase shares. Now building infrastructure with the completion of a distribution centre in Wakefield completed in 1988 and expanded in 1990. But further expansion outside of Bradford and Northern England does not happen until 1998 when it opens its first store in Southern England, located in Erith, Greater London. Followed by its inclusion in the FTSE 100 in 2001 it’s acquisition of Safeways in 2004.
To its meteoric growth in that period of 2004-2009 where Morrisons became one of the ‘Big Four’ supermarket chains and winning various food retail awards such as Food Retailer of the Year and picking up multiple awards at The Grocer awards and its total stores jumped from 119 to 403. It was clear to many analysts and its competitors that Morrisons would suffer from growing pains in all aspects of its business with many questions being asked of Morrisons, such as; Did Morrisons have the infrastructure in place to support such rapid expansion? •Was its current business model suitable for such large scale revamp? Could its current operations support the strain of this expansion?
Would Morrisons have to change its business image for being the ‘food specialist for everyone’ to compete effectively with the ‘big four’? This case study will focus on Morrisons infrastructure, specifically it’s IT systems and will look at the decision making process that went into and led to Morrisons deal with Oracle in 2008 to “implement a complete Oracle retail suite of merchandising, planning and stores applications, plus the Oracle E-Business Suite for financials, HR/payroll and manufacturing. IDG (2008). It will also look at the key challenges companies face when implementing such wide sweeping changes to its IT systems and review the outcomes of this system against Morrison’s original strategy. Firstly, with the increasing developments in IT systems it is becoming more common for companies of all sizes to utilize some form of IT in their business, from a sole trader compiling monthly sales figures to a big plc like Dell who generate and complete sales completely from an online setting.
When it came to Morrisons making significant changes to its IT systems it had a wealth of information and real examples to follow or in the case of J Sainsburys with its rushed and failed ? 290million implementation of IT systems aimed at lowering costs, successful business model change in regards to Dell Inc and it’s change to operate completely online which help massively in stock control technology while dealing with custom orders.
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