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Customer Relationship Management

1. Background

William Morrison as named, who was the father of the current Chairman, founded the company in 1899. From its origins as an egg and butter merchants in Bradford, it has grown to be on the country's largest supermarket chains offering a wide range of products including branded and its own label products. Employing around 130,000 people and with a customer base of 10million its philosophy is to offer outstanding quality and service and a pleasant shopping experience.

[1]Since 1899 the company has expanded exponentially and has much to its history. In 2004 the company took over Safeway's establishing itself as one of the 4th largest supermarkets in the UK. Following a 35 year record of sales and profit growth since going public in 1967, Morrison's joined the FTSE 100 for the first time in April 2001 [2]. According to its published AGM 2005 [3] Operating profits of the company was £ 308.3 m representing 3.1% of the turnover. However one of the major disadvantages of the company in 2005 was the loss of 74 million due to their Information Systems and Strategic decisions.

Furthermore, the concept, technologies, and understanding of CRM are still in its early adapter stage. Most of the CRM technologies are immature and the typical implementation costs and time are long enough to frustrate potential users. Many software and hardware vendors sell themselves as complete CRM solution providers but there is little standardized technologies and protocols for CRM implementation in the market. Even the scope and extent of 'what CRM includes' differ from vendor to vendor; each has different implementation requirements to achieve the customer's expectations. CRM is one of the busiest industries which occurs frequent merger and acquisition. Many small companies merge together to compete with large vendor. Large companies such as PeopleSoft acquired small vendor to enter this 'hot' CRM market. Due to these frequent merger and acquisition, the stable technical support from the market becomes rare. Vendors publish new version - maybe more integrated software - of CRM software as frequently as they can and customers should pay for that. Often these technical immaturities or unstable conditions are combined with the customer requirements which are frequently unclear and lead the project failure. These technical immaturities may be overcome over time, but the process may be long and painful. [4]

The cost to develop and maintain the individual customer relationship involves assumptions about the direct and indirect marketing and management costs. Each customer is unique, has a different lifetime value, and has personal preferences that need to be taken into account. Given the existing cost incurred due to the takeover it is not feasible to incorporate CRM at Morrison's at the precise moment. Because implementing CRM at this moment would mean that the company exceed it current allocated budget (see 2005 annual Report for financial summary). However, the long term benefits are obvious as pointed out in section 2 and 3.

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