Introduction
A company of interest that was recently in a merger and acquisition is Amazon Inc. The company acquired Whole Foods. The merger and acquisition involved well-calculated strategies that led to the success of the process. A company of interest that has not been involved in any merger or acquisition activity and operates solely within the United States of America is Rhino Foods Inc.
Acquisition Strategy
Amazon employed an excellent acquisition strategy for Whole Food. The strategy entailed accelerating access for Amazon. The acquisition strategy aimed at offering Amazon a breakthrough to the grocery industry. Amazon purchased Whole foods for about $13.7 billion. Insight on the acquisition and subsequent strategies to be employed by Amazon reveals that it aimed at reducing the prices of all grocery products for it to attain a higher market penetration. Amazon is a giant in e-commerce. It has successfully employed its model and technological capabilities to offer and expand its services. However, consumers use a different approach whenever acquiring groceries which may not be common within Amazon’s model. Consumers prefer walking into grocery stores and making the necessary purchases. Venturing into the grocery market would require Amazon to have physical stores (Turk, 2013). However, such an approach would not be possible as Amazon does not have physical stores. An acquisition of a firm in the grocery market would be an ideal strategy for penetrating the market. It is likely that Amazon will consider making it feasible for the consumers who do not wish to walk into the physical stores to carry out online shopping and have their products delivered at negligible costs.
The company further aims to introduce prime exclusive deals to promote customer loyalty and possibly acquire new customers. The approach entails offering hard to decline discounts to the consumers. The above strategies are backed with new ad campaigns. It is apparent that the new product promotional campaigns will create awareness regarding the products offered by the enterprise (Turk, 2013). Such an approach will enhance market penetration for the company. It is thus apparent that the acquisition was a wise choice for Amazon as it would enhance its market penetration to the grocery market.
An ideal target company for acquisition by Rhino Foods is Coffee by is GoodOnYa. The companies operate in the same market segment. However, GoodOnYa only serves market segments that prefer organic food. An approach by Rhino Foods to acquire or merge with GoodOnYa would make it possible to capitalize on the market segment with a preference for organic food. Such an approach will ensure the firms minimize the level of competition in the market share as they work on their competitive advantages to improve service delivery to the consumers.
Five Forces of Competition
An insight into the five forces of competition for Rhino foods offers insight on the level of competition in the market. Insight on the level of competition among the players in the food industry reveals that there is a high level of competition. The number of firms in the food and restaurant industry is high. There exist both small-scale and large-scale competitors in the industry. The forms are aggressive in their approaches to penetrate new markets and expand their activities.
The bargaining power of the consumers is high. Rhino Foods ought to address the significant powers of the consumers. The consumers have a significant influence on the demand patterns. The enterprise ought to meet the expectations of consumers to avoid a scenario where they lose their market share. The consumers incur little or no costs in switching between the various restaurants. The high number of restaurants offers the consumers a wide range of options. The high availability of substitute options for going out to Rhino Foods makes the bargaining power of consumers to be high.
The bargaining power of suppliers is weak. There is a high number of suppliers. A large number of suppliers weakens the individual impact of a supplier on the activities of Rhino Foods. The number of supplies in the market is high, which gives Rhino Foods an opportunity to work with the best suppliers.
The threat of substitution is high. There is a high number of substitutes for Rhino Foods products. For instance, the consumers have an option of preparing their own food from home or going to other restaurants. The low switching costs are a strong force that increases the threat of substitution.
Insight into the threat of new entrants to the market is moderate. The low switching costs increase the threat of new entrants. The capital required is also moderate. The cost of brand development is also weak. Such a combination of factors makes the threat of new entrants to be moderate. Insight on the five forces of competition affirms that it may not be easy for a company to withstand the level of competition in the market (Mishra, & Spreitzer, 2009). It requires effective management practices such as proper planning that would enhance the likelihood of attaining the goals and objectives of the enterprise.
Business Level and Corporate Level Strategies
Insight on the corporate level strategy for Amazon reveals it utilizes concentric diversification. The approach relies on leveraging the technological capabilities for business success. The strategy has been a key factor for success for Amazon as it has grown to be the largest online retailer across the globe. Insight on the business level strategy for Amazon reveals that it relies significantly on cost leadership. The enterprise operates with a very little profit margin for individual products. Cost leadership has been successful has it has the needs of the customers at the center of all pricing strategies. It is further successful due to the passion for invention and commitment to operational excellence.
Several developments in the corporate strategies for Amazon may enhance its efficiency. For instance, it may consider increasing its presence in the developing markets. It may consider strategies to ensure successful entry into developing markets (Mishra, & Spreitzer, 2009). Developing countries present several opportunities for e-commerce sites. It may be prudent to consider increasing its presence in the mortar and brick business. Such an approach would help increase market reach and build on brand popularity.
Insight on the business and corporate level strategies for Rhino Foods reveals that Rhino Food employs employee exchange programs as one of the business level strategies. Notably, the approach aims at managing the seasonal staffing demands to the benefit of employees and the company. Insight on the business level strategy for the company points that the company focusses on offering quality yet affordable means to the clients. A plausible recommendation that may enable Rhino Foods to improve its business strategy may require product and market diversification. It should offer more products to cater to the varying needs of customers (Mishra, & Spreitzer, 2009). For instance, it may introduce food products on its menu that cater to the needs of vegetarians and people with a preference for 100 percent organic food.
Corporate Governance Mechanisms- Rhino Foods Inc.
Insight on the operation of Rhino Foods reveals an effort to embrace proper corporate governance practices. The company undertakes a vital role in risk governance and internal control. The approach aims at ensuring that the company takes the necessary measures to ensure that it recognizes all the possible risks and takes necessary measures to mitigate the risks. The second corporate governance practice that the company embraces is the aspect of governance structures. The enterprise has a clear governance structure where all employees are aware of their duties and mandate (Adams, Hermalin, & Weisbach, 2010). The governance structures avail themselves of a mechanism for peaceful resolution of conflicts. It further avails itself of an avenue for handling various matters that have an impact on the employees.
An ideal recommendation that may help in the development of proper corporate governance would entail promoting the management of employee affairs. There may need to push for employee motivation. An approach to embracing strategies that promote employee retention would help overcome the issue of high employee turnover.
Leadership at Rhino Foods has been instrumental in promoting efficiency in activities of the organization. The leadership seeks to motivate the employees to enhance their efficiency and productivity. The management promotes servant leadership where those having higher ranks do not relent from offering the right guidance to the junior employees.
A recommendation in leadership practices for Rhino Foods would entail promotion of change and effective change management. Notably, the company does not have an online presence (Adams, Hermalin, & Weisbach, 2010). A change in management of activities for the company may require it to embrace technology and possibly create a strong online presence.
Rhino Foods is committed to being an ethical corporate citizen. The enterprise complies with all the set regulations that govern the hospitality industry. The enterprise further embraces a share value. It depicts concern for the environment, economy, and the health wellbeing of the community members. For instance, the company is keen on offering healthy meals to the consumers. It depicts care for the environment by employing proper waste disposal techniques.
References
Adams, R. B., Hermalin, B. E., & Weisbach, M. S. (2010). The role of boards of directors in corporate governance: A conceptual framework and survey. Journal of economic literature, 48(1), 58-107.
Mishra, A. K., Mishra, K. E., & Spreitzer, G. M. (2009). Downsizing the company without downsizing morale. MIT Sloan Management Review, 50(3), 39.
Turk, M. (2013). Amazon Web Services. Amazon Inc.
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