Research Paper on:
Research Proposal; The Motivations behind Morrison’s Takeover of Safeway

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of some stores to other supermarkets in the interests of competition, with Waitrsoe and Sainsbury taking these over. However, it can be argued tat with the current level of competition  and concentration in the UK supermarket industry the only way for a company that was not one of the main three, to compete, was by making an acquisition., Wal-Mart had  already followed this model acquiring Asda, and now Morrison are more able to compete with the former Safeway stores. 2. Aims and objectives The research will examine the takeover  of Safeway by Morrison, focusing on the stores that remained with the company and assessing the reasons behind the takeover, especially considering that this may be influential on the  2006 operating loss, which was the first year of loss ever reported by Morriosns (Davision, 2006). . The main hypothesis is that * Due to the high level  of concentration in the UK supermarket industry and the domination by a single firm the only way for a potential competitive to increase sales in a significant manner is to  include acquisition in the competitive strategy that is formulated. The secondary hypothesis is that * In order to compete with the large supermarket chains in the UK differentiation  alone is not enough, there also needs to be the ability to benefit from economies of scope and/or scale. 3. Background The  supermarket industry is mature and fiercely competitive, however with top 4 companies controlling 69% of the market the level of concentration is high, and the market, which sells 47% of  all food, responds in a way that indicates this position (Euromonitor, 2006). Tesco, Sainsbury and Asda have been the top three for many years and as such they are able