Unit 6 Business Decision Making Assignment WM Morrison Supermarkets

Unit 6 Business Decision Making Assignment WM Morrison Supermarkets

Unit 6 Business Decision Making Assignment WM Morrison Supermarkets

Introduction

In organization decision making enables the business manager to take plan and implement correct strategy or feasible action for the business (Munier, 2011). In the present business decision making assignment WM morrison supermarkets report business decision making tools and techniques are used for WM Morrison Supermarkets Plc to take decisions for their business. Company deals in food retail business and sells varieties of retail products, general items and currently has more than 500 supermarket stores in UK. In first of the report variety of different sources of data collection are used to assess the behavior and attitude of consumers of Morrison. Further in the next part, data analysis techniques are used to examine the collected data in effective manner. In third section with the help of spreadsheet, different  information and knowledge  are produced for the purpose of decision making and in last section, software were used for making decision in organization.

Unit 6 Business Decision Making Assignment WM Morrison Supermarkets - Uk Assignment Writing Service

Task 1

1.1

It is planned that primary and secondary method of data collection will be used for carrying out survey in the area of Greater London. This survey will be based on collection the relevant information from the customers regarding their behavior and attitude towards the Food Discount Retailing scheme of WM Morrison Supermarkets Plc.

  • Primary Data collection: Primary data will be collected to support the management of WM Morrison Supermarkets regarding the new discounting scheme. This data collection method facilitates the researcher to collect fresh data from the market (Saunders et. al., 2006.). It will assist to access the correct data from the customers of Morrison about their attitude and behavior towards the new retailing scheme of the company. For this the research will be conducted from the existing customers of supermarkets of London belonging to different age groups and different income levels.
  • Secondary Data Collection: Secondary data will also be collected for the purpose of effective decision making of management of Morrison. These data will be collected from the wide range of sources which were based on behavior and attitude towards the discount retailing scheme of the companies. It will be collected from journals, researches, and online websites and from many other secondary sources and publications which show the reports about the performance and other data related to supermarkets in London. (Walliman, 2011).

1.2

  • Survey Methodology: For collecting the data from the consumers of WM Morrison, survey methodology of questionnaire and interviews was used. Data has been collected from the customers of Greater London by asking them to fill the questionnaires and recording the responses received them from questions asked personally as well through interviews.(Rodgers, 2007). Questionnaire  included both open and close ended questions to recognize the consumer behavior and attitude of customers towards the Food Discount Retailing Scheme of WM Morrison Supermarkets Plc.
  • Sampling Frame: To access the information from the customers of retail market of Greater London area, random sampling method was used. Through this sampling frame, data has been collected which is required by the management of Morrison (Saunders et. al., 2006). The sampling population included the existing and past customers who visited the supermarkets at London belonging to all age groups. The sampling frame included those customers who were able and willing to fill the questionnaire and give responses for questions asked from them.

1.3

Questionnaire for a survey into consumer behavior and attitudes towards Food Discount Retailing

Name: _________________________

  • Age
  1. 15 - 18 years                                       
  2. 18 - 28 years                                                   
  3. 28 - 35 years                                                   
  4. Above 35 years                                              
  • Gender
  1. Male                                                               
  2. Female                                                            
  • Income
  1. Below £1000 per month                      
  2. £1000 - 3000 per month                                  
  3. £3000 - 5000 per month                                  
  4. Above £5000 per month                                  
  • Working Status
  1. Student
  2. Graduate/ Post Graduate
  3. Business
  4. Service                                                                       
  • Marital Status
  1. Married          
  2. Unmarried                                                      
  • Distance travelled by you to regular grocery store?
  1. Less than 2 km                                               
  2. 2 km to 4 Km                                     
  3. 4  km to 6 Km                                    
  4. More than 6 km                                              
  • Do you use Food Discount Retailing schemes while shopping in grocery stores?
  1. Yes                                                            
  2. No                                                              
  • Frequency of shopping at food discount retailer shops in a week?
  1. Less than 2                                         
  2. 3 to 5 times                                        
  3. More than 5 times
  • How often you shop at Morrison during the time of Food Discount Retailing Schemes?
  1. Less than 2                                         
  2. 3 to 5 times                                        
  3. More than 5 times
  • Are you satisfied with the food retailing schemes of retail companies?
  1. Highly satisfied                                              
  2. Satisfied                                                         
  3. Neutral                                                                       
  4. Unsatisfied                                                     
  5. Highly unsatisfied                                          
  • Do you consider that due to shopping schemes, your expenditure in grocery stores is increased?
  1. Yes
  2. No
  • Do you agree that Food Discount Retailing Schemes attract you to buy grocery products from retail stores?
  1. Strongly Agree                                   
  2. Agree                                     
  3. Neutral                                                           
  4. Disagree                                                         
  5. Strongly Disagree
  •  Your opinion about the Food Discount Retailing Schemes of grocery stores?
  • Suggestions for improvement in Food Discount Retailing Schemes of WM Morrison Supermarkets Plc?

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Task 2

2.1

The responses were received from the target population  through the survey into the consumer attitude and behavior towards food discount retailing. Out of total population 19% were between the age of 15-18 years, 35% between 18-28 years, 25% between 28-35 years and 21% were above the age of 35.

The following table shows the responses related to income group of population:

Income per month

Percentage of population

Below £1000              

14

£1000 - 3000

33

£3000 - 5000

24

Above £5000

29

The responses relate to working status are as follows:

Working status

Percentage of population

Student

15

Graduate/Post graduate

30

Business

24

Service

31

There were 44% males and 56% females who responded. There were 41% married and 59% unmarried shoppers. 69% population used the food discount schemes and remaining 31% did not. While using the food discount schemes 46% used to shop 3 to 5 times at Morrison, 22% used to shop more than 5 times whereas 32% only 2 times. 74% believed that due to these schemes their expenditure at retail store  has increased and the remaining 26% believed it has not.

The following table shows responses about how many people agree that food discount retailing schemes attract them to buy grocery products from retail store:

Strongly agree

22

Agree

31

Neutral

27

Disagree

12

Strongly disagree

8

Calculation of measures of central tendency

The following is the calculation using responses about how many people agree that the discount schemes attract them to buy grocery products from retail stores:

Mean = 22+31+27+12+8/5

            = 20

Median = n+1/2 th term (8, 12, 22, 27, 31)

            =5+1/2 th term

            = 3rd term

            = 22

Mode = Highest value or frequency

            = 31

2.2

From the analysis of responses received from the survey into the consumer attitude and behavior towards food discount v retailing schemes at retail stores and calculation of measures of central tendency from the data collected for generation of information for management of Win Morrison Supermarkets Plc., it can be concluded that most of the customers are satisfied with the food discount retailing schemes provided by existing retail stores at London. The average population that agrees that the discount schemes attract them to buy grocery products is 20. The middle value of the data when arranged in ascending order is 22 and the mode of 31 represent that the highest population of the data collected is 31 which represent the number of respondents who agree. This means that most of the population agrees that the main reason for increase in expenditure on grocery store and increase in buying of grocery products is the food discount retailing schemes at the retail stores.

 2.3

Calculation of standard deviation as the measure of dispersion

Value

Mean

Value-Mean

(Value-Mean)2

22

20

2

4

31

20

11

121

27

20

7

49

12

20

-8

64

8

20

-12

144

Total

 

 

382

Standard Deviation = √382/5

                                    = 8.74

The standard deviation of 8.74 shows the risk of deviation of mean 20 from its path. Thus risk may deviate up to 8.74 on either side under the situations.

2.4

Quartile, percentile and correlation coefficient are useful in terms of business context, as this statistical measures help to draw some valid conclusion for the organizational purpose.

  • Quartile: Quartile calculates the value of data into four different parts and applying this tool on the  financial accounting  data of the company like Morrison (Black, 2011). It will give the results into four different quartiles and splits the financial data in terms of smaller and larger values. Value of second quartile determines the median and third quartile shows the upper quartile of split the financial data in form of 75% (Bang, 2011).
  • Percentile: Values of percentile helps to determine the number of observations in terms of values. Percentile value is calculated by dividing the total number of data into 100 equal parts and by applying this tool on financial data of company, the value of different percentiles such as 25th percentile, 50th Percentile, 75th Percentile etc. can be determined (Wegner, 2010).
  • Correlation coefficient: It is one of the most useful tools for analyzing the relationship between the two or more variables. Through this statistical method, business can examine that whether positive or negative relationship between the variables (Koori, 2010). It examines the positive or negative relationship between the values 0 to 1. On the basis of value of correlation coefficient ‘r’ relationship can be measured and business can takes their decision. For example is the correlation value between the sales and advertising expenditure is moderate, than company can increase its advertising expenditure to generate higher sales as it adverting and promotion of company increases the sales revenue (Sinclair and Ashkanasy, 2005).

Task 3

3.1

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Conclusion: From the above graphs which were produced with the help of spreadsheet, it was concluded that sales revenue of the retailers were increasing from last five years. It was assessed that the all the four major retailer of UK are on the track of growth. Morrison has tough competition with the Sainsbury and on comparing their performance it was analyzed the sales of the company was higher in past five years (Gibson, 2011). On the other hand, other two retailers Lidl and Aldi have less sales revenue in compare to Morrison and Sainsbury. They are the small food retailers and not have any greater competition with the food and retail products sell by two major supermarket chain of UK. Graphs also shows that growth rate of Js Sainsbury’s and Wm Morrison are higher in compare to the other retailers (Andersen Dysvik and Vaagaasar, 2009). Increasing sales revenue of these companies depicts that in future also they will achieve higher sales revenue.  

3.2

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Calculation of forecasted sales

 

2014

2015

2016

Wm Morrison

Y = 942.9x+13611

1912611.6

1913554,.5

1914497.4

Js Sainsbury’s

Y = 1111.4x+17781

2256140.6

2257252

2258363.4

Lidi Ltd

Y = 13.02x + 147.04

26369.32

26382.34

26395.36

Aldi

Y = 826.9x + 694.7

1666071.3

1666898.2

1667725.1

3.3

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3.4

To,

The Management

Wm Morrison Plc.

Subject : To provide information about threat to discount food retailers and ways to respond. with them.

Introduction:

This report aims to provide the relevant information to the mangers of the company about the threats to the food retailers and the methods to deal. The information is based on the analysis and evaluation of data collected from survey.

  • Threat to discount food retailers: On examining the sales revenue of the Wm Morrison Plc of last five years, it was evaluated the sales revenue of the company increased. On the bass of graphical figures the performance of the company was towards increasing trend. It depicts that in compare to previous year results, the number of customers has increased (Gravette and Wallnau, 2009). But the company has threat from the discounted food retailers of the market. Their products have tough competition with the prices of discounted food items offered by Js Sainsbury’s, Lidl Ltd and Aldi.  It makes direct impact on the sales of the Morrison and also affects the sales revenue of the company.
  • Ways to respond to threat: Management of Wm Morrison Plc has to responds towards this discounted food items offered by the other retailers. Morrison can also start to offer their products at discounted prices and also the combo offers and schemes for customers (Hedgebeth, 2007). These promotional offers will attract the customers of  marketing strategy  and company can also respond to these retailers by offering the coupons and free gifts. It will also help to retain the customers for long term period and also satisfy their needs and wants in compare to its competitors.
  • Conclusion: Thus it can be concluded that the threats to the company can be dealt with effectively by using the recommendations and suggested ways.
  • Regards:
  • Research Manager:

Task 4

4.1

There are different information processing tools which can be used by the Morrison in perspectives to operational, tactical and strategic decision such as:

  • Management Information System: It is based on the approach of human resource which is totally based on the computerized technology (Williams, 2011). With the help of MIS (Management Information System) Morrison can directly search the records, analyze them and collect all the records at one common database of computer system.
  • Executive Information System: EIS is that system which helps the managers and executives of Morrison to access all the information related to their supermarket chain business. It composed of both internal and external business data.
  • Decision Support System: Morrison Plc can use this system for planning purpose and operational use as it takes help of decision making tools. On the basis of which information at large scale can easily be accessed (Gravetter and Wallnau, 2009).

4.2

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The network diagram and determination of critical path is as follows:

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The various routes or paths on the network diagram are as follows:

A-C-F-J = 12 days

A-D-G-J = 18 days

A-E-H-I-J = 22 days

B-H-I-J = 17 days

Critical path = Path with the longest duration

                        = (A-E-H-I-J = 22 days)

Thus the critical path of the project is A-E-H-I-J HAVING DURATION OF 22 DAYS.

4.3

Net Present Value: On the basis of net present value method, Morrison Supermarket Plc should consider the Project A for their business. This project has greater viability in compare to Project B as net present value of this project is greater and will bring higher cash flow for the company (Rodgers, 2007).

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Internal Rate of Return: From this investment appraisal technique, projects which have higher IRR will be favorable for the Morrison (Koori, 2010). On analyzing the viability of the Projects A and B, it was assessed that Project A is feasible for the company and should select as most appropriate and profitable investment for their supermarket business. The IRR calculated using excels function is as follows:

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Conclusion

From the above study it has been concluded that using of different decision making tools and techniques in the organization are very essential. It helps the management to take their valid decision by generating the information through different software and using of statistical tools. Application of these methods also helps in making the selection of right projects for the business.

References

Andersen, S. E., Dysvik, A. and Vaagaasar, L. A., 2009. Organizational rationality and  project management . International Journal of Managing Projects in Business. 2(4). pp.479 – 498.
Bang, C., 2011. Managerial Decision Making, The Essential Pocket Strategy Book.John Wiley & Sons.
Black, K., 2011. Business Statistics: For Contemporary Decision Making. John Wiley & Sons.
Gibson, A., 2011. Exposure and understanding the histogram. Peachpit press.
Gravetter, J. F. and Wallnau, B. L., 2009. Statistics for the Behavioral Sciences. Cengage Learning.
Hedgebeth, D., 2007. Data-driven decision making for the enterprise: an overview of business intelligence applications. VINE, 37(4). pp.414 - 420.
Kourdi, J., 2010. The Economist: Business Strategy: A Guide to Effective Decision-making. Profile Books.
unier, N., 2011. A Strategy for Using Multicriteria Analysis in Decision-Making: A Guide for Simple and Complex Environmental Projects. Springer Science & Business Media.
Rodgers, P., 2007. Commercial Awareness and Business Decision Making Skills: How to understand and analyse company financial information. Butterworth-Heinemann.
Saunders, M. et. al., 2006. Research Methods for Business Students, Harlow: Prentice Hall.
Sinclair, M. and Ashkanasy, N., 2005. Myth or a Decision-making Tool?.Management learning. 36(3). Pp. 353-370.
Walliman, N., 2011. Your Research Project: Designing and Planning Your Work. SAGE.
Wegner, T., 2010. Applied Business Statistics: Methods and Excel-Based Applications. 2nd ed. Juta and Company Ltd
Williams, S., 2011. Making Better Business Decisions: Understanding and Improving Critical Thinking and Problem Solving Skills, SAGE.
Internal rate of return. 2011. [Online]. Available through: http://www.princeton.edu/~achaney/tmve/wiki100k/docs/Internal_rate_of_return.html> [Accessed on 28th November 2014].