Analysis of Culture Mix Effects in Amazon's Wholefoods Acquisition

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A study of the effects of the culture mix in the Aquisition of
Wholefoods by Amazon
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Table of Contents
1.0 Introduction................................................................................................................................3
1.1 Purpose..................................................................................................................................3
1.2 Academic topic area and general business context of the problem.......................................4
1.3 Specific business context of the problem..............................................................................5
Reference List..................................................................................................................................8
Appendix..........................................................................................................................................9
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1.0 Introduction
Introduction
Corporate strategy encompasses an organisation’s corporate actions and decisions with an aim to
accomplish business objectives and gain competitive advantages. The acquisition is an important
corporate strategy in which a firm purchases significant portion shares of another company. The
study shall outline the purpose, academic topic area and business context of the research topic on
the effects of culture mix on the acquisition of Whole foods by Amazon. Amazon is an American
multinational company that focuses on artificial intelligence, e-commerce and cloud computing.
Whole foods is an American supermarket chain that deals with products free from artificial
colour, preservatives, flavours, sweeteners and hydrogenated fats.
1.1 Purpose
Corporate strategy and governance are two important topics studied in an academic career. The
topic area can let students determine scopes of a firm’s activities. It is easy to understand how
business processes assist in supporting business goals. A firm’s external environment and
resources can be identified by studying corporate strategies. The study on corporate governance
can make learners understand the collection of processes, systems and mechanisms in which
business activities are managed and controlled. The learners can acquire knowledge on how
organisations develop strategic aims, apply leadership style, supervise employees and report
shareholders regarding business progress. The acquisition is a major corporate strategy that
enables learners to understand how companies take initiatives to acquire shares of another
organisation to have control over it (Tricker, 2015). When a company acquires another company
with a different culture, both managements witness the effect of culture mix. Employees may go
through different sets of values, behaviours, and business practices. Learners can identify the
effect of culture mix on the acquisition of Wholefoods by Amazon. Therefore, the aim of the
proposed research is as follows.
 To investigate the effect of the cultural mix in the acquisition of Wholefoods by Amazon
Objectives
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 To evaluate the positive effects of the cultural mix in the acquisition of Wholefoods by
Amazon
 To evaluate the negative effects of the cultural mix in the acquisition of Wholefoods by
Amazon
 To recommend actions to mitigate the negative effects of the cultural mix in the
acquisition of Wholefoods by Amazon
1.2 Academic topic area and general business context of the problem
The general area in which the research problem resides is a corporate strategy. Corporate
strategy is the portfolio action taken by companies to create maximum value for their businesses
(Hickman and Silva, 2018). In order to build and implement a corporate strategy, companies
have to focus on areas like portfolio management, organisational design, and resource allocation.
Portfolio management concerns with how departmental units relate to each other. Resource
allocation emphasises on two areas like capital and people. Businesses need to identify the core
competencies and ensure that their resources are adequate to implement chosen strategies. The
organisational design ensures that firms have effective and efficient structure, systems and
procedures to produce maximum value for the business.
The specific area in which the research problem resides is the acquisition strategy. The strategy
aims at acquiring shares of another company and controlling its business activities. Companies
need to recognise the opportunities and issues of acquiring another firm. They can have
advantages of increased market share, vertical integration of supply chain, shareholder value
enhancement and potential tax benefits. The pitfalls of acquisition are a loss of brand image, loss
of talent, the clash of culture, and others (Bender, 2019). If companies with two different cultures
mix through acquisition, conflicts may occur among management.
The problem identified in the research is the effect of culture mix on the acquisition process.
When a firm acquires another firm with a different culture, it becomes challenging to operate
business due to different values and perspectives of employees. Multicultural teams may not
perform well due to the presence of negative cultural stereotypes. Professional communication is
misinterpreted due to the presence of individuals having different cultures. Some employees may
face problems in understanding professional etiquette. Different working styles of people from
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different cultures result in conflicting situations leading to lower productivity. Low productivity
of acquired business results in reduced brand recognition of parent companies.
1.3 Specific business context of the problem
Amazon has acquired Wholefoods a few years back. Both organisations operate in different
fields of business. Amazon is an American based company that deals with areas like digital
distribution, consumer electronics, artificial intelligence, cloud computing and others. The
products available in the e-commerce platform of Amazon are video games, software, food, toys,
jewellery, apparel, furniture and others (about amazon.uk, 2019). The organisation was formed
in 1994 in Washington, US. Wholefoods market was established in 1980 in Texas, US. It sells
products that are free from hydrogenated fats, sweeteners, colours and preservatives
(Wholefoodsmarket.co.uk, 2019). The retailer is popular for its organic selections.
The acquisition of Wholefoods market by Amazon has combined two leading brands of retail
industry. Amazon has succeeded in expanding its multichannel offerings and enhancing
customer service after this acquisition. The acquisition is much popular due to the mixing of two
cultures. Amazon has made its name for cheap and efficient business models, whereas
Wholefoods has prided itself by empowering individual stores and giving them a personal touch.
Amazon follows decentralised culture, where managers make decisions and pass them to
employees (The Conversation.Com, 2019). Wholefoods empower employees to emphasise on
healthy and high-quality foods. It has a high-empowerment kind culture that enables employees
to put customers in the centre of the business.
The business may have faced some challenges or opportunities after the acquisition. It is
necessary to find out how culture mix has influenced the business to plan for future development
and growth. The mixing of both cultures may enable employees to deal with different approaches
of doing businesses. The management and employees may face difficulties in dealing with
different managerial styles. The chance of occurring conflicts is high due to the involvement of
people from distinct cultures.
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Conclusion
The study has developed an aim to understand the effect of culture mix on the acquisition of
Wholefoods by Amazon. The specific and general contexts of the topic areas have been
discussed. The importance of researching the effect of culture mix has been covered here.
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Reference List
aboutamazon.uk 2019. About Amazon. [online] Available at: https://www.aboutamazon.uk/
[Accessed 25 Mar. 2019].
Bender, R., 2013. Corporate financial strategy. Routledge.
Hickman, C.R. and Silva, M.A., 2018. Creating excellence: Managing corporate culture,
strategy, and change in the new age. Routledge.
The Conversation. Com 2019. With its purchase of Whole Foods, is Amazon's goal to
revolutionise food distribution?. [online] Available at: https://theconversation.com/with-its-
purchase-of-whole-foods-is-amazons-goal-to-revolutionise-food-distribution-93161 [Accessed
25 Mar. 2019].
Tricker, B., 2015. Corporate governance: Principles, policies, and practices. Oxford University
Press, USA.
Wholefoodsmarket.co.uk. 2019. Whole Foods UK. [online] Available at:
https://www.wholefoodsmarket.co.uk/ [Accessed 25 Mar. 2019].
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Appendix
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