Research Paper on "Acquisition Strategies"
Research Paper 3 pages (1220 words) Sources: 3
[EXCERPT] . . . .
Whole FoodsAcquisition Strategies
SuperValu vs. Whole Foods: Industry analysis
SuperValu vs. Whole Foods: Industry analysis
The supermarket industry is one of the most competitive in America: it is wildly responsive to shifts in consumer demand. Fuel cost increases, natural events that affect the availability of crops, and other aspects of commerce can quickly wipe away profits or challenge what would otherwise seem a sensible marketing and distribution strategy. With this in mind, the Minnesota-based chain SuperValu has focused on a traditional, low-price, high volume strategy in the rapidly growing discount supermarket market to generate revenue. SuperValu has attempted to expand into as many areas of the nation as possible and profit by offering low prices and selling at high volume to consumers. In direct contrast, the organic supermarket Whole Foods is only slowly expanding its outreach across the nation and world, taking advantage of the expanding interest in holistic cooking and organic foods. It has acquired several of its competitors to create a slightly higher-volume niche strategy and reduce competition, but it knows will never be able to price its products as low as SuperValu and instead focuses on a specific consumer demographic.
Whole Foods' cautious strategy has paid off thus far. Interest in organic food is exploding across the nation. Even Wal-Mart, the nation's largest retailer, has become a critical market player in organics. Of course, this could hamper Whole Food's success, given that Wal-Mart is able to price even organic foods at lower cost compared with specialty retailers. As the ec
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SuperValu is also challenged by rivals such as Wal-Mart, but because of cost rather than a specific market niche. Wal-Mart Supercenters, Sam's Club, Costco, and Dollar Stores have all been eating into traditional supermarkets' market share. "In 2001, Wal-Mart became the largest seller in food" (Imlay 2006). Because of Wal-Mart's ambitions to even offer organic produce even Whole Foods has been forced to reconsider its traditional model of differentiation. On one hand, increased demand for organics has driven many individuals to seek out Whole Foods. On the other hand, demand has also spurred superstore-size rivals to enter the market. Whole Foods has enabled itself to lower costs in comparison to totally independent stores. Its acquisition of its smaller competitor Wild Oats, which had significant penetration in the West, enabled it to expand its stores and sell at a higher volume (Moore 2007).
Whole Foods is thus adopting a generic strategy of Michael Porter's in which it focuses on a market niche (albeit an expanding one) for organic foods and outcompeting rivals within that niche segment by having lower costs than its rivals. It is able to serve niche, food-conscious consumers at a lower price than totally independent stores. The Wild Oats acquisition was deemed significant because, as well as eliminating a rival, Whole Foods was able to increase its volume of sales rapidly. Its number of venues substantially increased in areas of the country generally under-served by organic markets (Moore 2007). Whole Foods is… READ MORE
Quoted Instructions for "Acquisition Strategies" Assignment:
Consider the acquisition strategy of both of these two firms in the retail food industry: Whole Foods and SuperValu. In addition, classify the market of each firm (also explain why the firm meets this classification) as:
1. Emerging
2. Rapid-growth
3. Mature/slow-growth
4. Stagnant/declining
5. High-velocity/turbulent
6. Fragmented
Describe the acquisition history of each firm and this choice, given the market situation of their segment of the industry.
Answer the following questions:
1. Identify the company and their product(s)/service(s) you will focus on in this paper (if relevant) and a description of the each.
2. do an environmental scan of the industry in which this company operates. Your scan should include a discussion of the market situation and structure of this industry and all change agents relevant to the industry and firm, including but not limited to major indicators of the economy, societal/demographic trends, technological trends, and legal/regulatory issues.
3. Using the Porters Five Forces, use critical thinking skills to discuss the impact of the change agents identified in #2 on market situation, structure, and competitiveness of this industry.
4. identify the generic strategies used by the firm for the products/services you identified in #1. Critically discuss the impact of the change agents identified in #2 on all generic strategies you*****ve identified. If your firm employs a differentiated strategy, discuss the points of differentiation and explain why they are or are not competitively sustainable. Defend or challenge the alignment of the current generic strategies with the new environment. This section should include an analysis of competitors and price for your identified product(s)/services(s).
FYI: below are The Five Generic Competitive Strategies:
* 1. A low-cost provider strategy*****striving to achieve lower overall costs than rivals and appealing to a broad spectrum of customers, usually by underpricing rivals.
* 2. A broad differentiation strategy*****seeking to differentiate the company*****s product offering from rivals***** in ways that will appeal to a broad spectrum of buyers.
* 3. A best-cost provider strategy*****giving customers more value for the money by incorporating good-to-excellent product attributes at a lower cost than rivals; the target is to have the lowest (best) costs and prices compared to rivals offering products with comparable attributes.
* 4. A focused (or market niche) strategy based on low costs*****concentrating on a narrow buyer segment and outcompeting rivals by having lower costs than rivals and thus being able to serve niche members at a lower price.
* 5. A focused (or market niche) strategy based on differentiation*****concentrating on a narrow buyer segment and outcompeting rivals by offering niche members customized attributes that meet their tastes and requirements better than rivals***** products.
300 words per page. apa style. one inch margins
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How to Reference "Acquisition Strategies" Research Paper in a Bibliography
“Acquisition Strategies.” A1-TermPaper.com, 2011, https://www.a1-termpaper.com/topics/essay/whole-foods-acquisition-strategies/1739259. Accessed 6 Jul 2024.
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