Amazon's Acquisition of Whole Foods: A Bold Move to Revolutionize the Grocery Business

Amazon's acquisition of Whole Foods for $13.7 billion is a bold move that will revolutionize the grocery business. With more than 450 stores in urban locations, Amazon can now reach consumers through retail stores. This acquisition will increase competition in the sector and start a price war among competitors like Walmart. Amazon's low-price strategy will attract more consumers to buy fresh products at low prices. The acquisition will also allow Amazon to add to its data and analyze buying patterns and behaviors of consumers. This will provide a whole new buying experience and introduce new offers according to the needs of the consumer. Amazon can use Whole Foods stores along with online sales to cut the revenue of Walmart and become the ruler of the grocery business.

CRAFTING & EXECUTING STRATEGY
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Statement: “Amazon acquiring whole foods is one of the boldest move which will
revolutionize the grocery business and will give a whole new experience to the consumer”.
The acquisition of whole foods by Amazon at eyepopping amount of 13.7 billion dollars was one
of the biggest event in 2017. The deal which can change the future of entire food industry.
Amazon has already been into grocery business through amazon fresh but acquiring whole foods
which has more than 450 stores in urban locations will allow them to reach consumers through
retail stores (Wasik, 2017). As most people in US likes to see the food products before buying to
ensure its quality and freshness which cannot be achieved through online shopping. According to
a survey, its proven that Americans spend about 6% of their income on grocery and its also one
of the purchases that people make on regular basis. This data is greater than automobiles and
smart phone industry. This proves that the food industry still remains a reliable and profitable
investment (Taylor, 2017). It is evident that acquiring food chain will only increase the existing
completion in this sector and will further start the price war among its competitors like Walmart.
The other reasons in support of the thesis statement are listed below:
 Establishing any grocery chain takes a very long time due to the intensity of competition
in this sector. The acquisition has made amazon an overnight retail grocery competitor.
As amazon is already known for its strategy to sell products at low prices which will
reflect in the grocery business too, making the competition fiercer. This will certainly
attract more consumers to buy fresh products at low prices (Hartung, 2016).
 Amazon acquiring whole foods allows them to add he amount of data and as amazon is
known for its mastery to analyze the data to understand the buying pattern and behaviors
of consumer. This will provide a whole new buying experience whole company can
introduce new offers according to the need of the consumer.

 Attack on Walmart: amazon decision of acquiring whole food has brought it into direct
competition with another giant in this business Walmart. Amazon can use whole foods
stores along with online sales to cut the revenue of Walmart which can make the ruler of
grocery business.
 Amazon can use its low-price strategy to remodel whole food brand concept. It can add
item like coke bounty, packaged juice etc. which were previously not sold by whole
foods. The addition of these products along with other products will give lower the
average cost of a cart.
Although the deal to acquire was 13.6 billion through it was a cheap deal for amazon. The
acquisition amount is only 65% of cash which amazon had in last quarter (Berman, 2017).
Also, the long-term debt of amazon is only 7.7 billion so for a company whose market
capitalization of 460 billion dollars can easily afford more risk without any significant risk.
Hence it is evident that the strategy to acquire whole foods seems profitable for amazon. This
it can be said that the acquisition will revolutionize the grocery busses and will give buyer a
whole new experience.

References
Berman, L. (2017, SEPTEMBER 8). Target Just Declared War on Amazon's Whole Foods Business and
Walmart. Retrieved from The Street: https://www.thestreet.com/story/14299010/1/retail-
price-wars-target-cuts-prices-to-compete-with-walmart-and-whole-foods.html
Hartung, A. (2016). The 9 Reasons Why Amazon Buying Whole Foods Is A Good Idea. Retrieved APRIL 17,
2018, from https://www.forbes.com/sites/adamhartung/2017/06/16/the-9-reasons-why-
amazon-buying-whole-foods-is-a-good-idea/#2c001b3e6f15
Taylor, K. (2017). Amazon is the new Walmart - and Whole Foods just inherited all of the e-commerce
giant's baggage. Retrieved 4 18, 2018, from https://www.businessinsider.in/amazon-is-the-
new-walmart-and-whole-foods-just-inherited-all-of-the-e-commerce-giants-baggage/
articleshow/60339272.cms
Wasik, J. (2017). Amazon's Real Agenda Behind Whole Foods Bid. Retrieved 4 18, 2018, from
https://www.forbes.com/sites/johnwasik/2017/06/21/amazons-real-agenda-behind-whole-
foods-bid/#13fa80c413df