Term Paper on "Changing Corporate Structure to Respond to an Acquisition"

Term Paper 4 pages (1193 words) Sources: 5

[EXCERPT] . . . .

Acquisition

Safeway's Acquisition of Sobeys

The global supermarket industry is highly competitive. Simultaneously, this sector is like many others in a state where mergers, acquisitions and a general pattern of consolidation have become increasingly commonplace. For firms engaged in these types of dynamic organizational transformation, there are myriad factors to be considered in terms of planning, implementing and maintaining this transformation in a manner that serves both entities most optimally. The discussion hereafter considers a hypothetical scenario in which the Safeway grocery store chain has acquired the Sobeys grocery chain and all its subsidiary brands with a focus on the dimensions of leadership, geography, branding, location and personnel orientation.

Make-Up of Executive Teams:

One of the major factors to account for during such a process is the composition of the corporation's leadership following acquisition. In this case, Safeway is the acquiring firm and will therefore experience a minimal shift in its leadership structure. Indeed, as a reflection on Safeway's recent corporate history demonstrates, the firm has been in a steady phase of merger and acquisition across the last decade or more. Safeway has completed, since 1998, the acquisition of Vons, Dominicks, Randalls, Carrs and Genuardis food retail chains. (Safeway, p. 32) Throughout, it has maintained relative consistency with respect to its core leadership orientation even as individual officers have departed or arrived. In the instance of some of the above noted acquisitions, a new member would be elected to the Safeway Board of Directors in concurrence with the addition of a new business outlet. Bill McEwan, President & Chief Executive Officer of Sobeys Inc., would likely be a good candidate for membership on the board.

Where Sobeys is concerned, it should anticipate some leadership turnover to the extent that some of its corporate structure would no longer be necessary. With Safeway serving as its central authority, Sobeys locations would experience a turnover of corporate personnel with Safeway implanting its own HR professionals, sustainability officers and certain managerial positions. Here, it is likely that Safeway would engage its own audit of Sobeys' executive personnel in order to identify redundancies, to eliminate positions, to reappoint members of Sobeys' leadership and to disseminate clearly the impact that its ownership of Sobeys will have on leadership functions and hierarchies at Sobeys. Clarification of the evolving chain of corporate command will be an absolute necessity.

Geographic Markets:

The most immediate and obvious impact that this would have on the geographic markets occupied by either firm would be to improve Safeway's reach in Canada. At present, Safeway identifies its permeation as being largely in the United States and Western Canada. Sobeys, by contrast, identifies itself "as one of only two national grocery retailers in Canada, Sobeys Inc. serves the food shopping needs of Canadians with more than 1,300 stores in 10 provinces." (Sobeys, p. 1)

This denotes that the acquisition of Sobeys would provide Safeway with a considerably greater visibility and presence throughout Canada. This serves as an opportunity to improve its versatility in the Canadian food retail market and to proliferate further its own distinct brands and identity.

Store Brands:

With respect to these brands, by entering into the Safeway fold, Sobeys would begin to carry certain brands associated with Safeway market initiatives. Among them, Safeway's "Ingredients for Life" branding campaign, begun in 2005, has had a major and positive impact on the company's image and sales. This includes not just a conscientious selection and featuring of health product options but also a remodeling of stores with gentler lighting and more tasteful presentation of foods. These 'lifestyle' stores "showcase Safeway's commitment… READ MORE

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