Amazon Buys Whole Foods for $13.4 Billion!
What can you learn from this as an entrepreneur?
WOW, just plain WOW! Was the response to the announcement made Friday, July 16th. What a huge acquisition. My first initial thought was, this will leverage Amazon as a huge giant in the business world, just beneath God! I love watching on the forefront when large companies go through this to see how the transition impacts everyone involved. How will the integrity of Whole Foods remain, what growth will be forecasted and what does this mean for the consumer?
To be a fly on the wall with all of the behind the scenes negotiations surrounding this.
*Neil Stern, contributor for Forbes states:
- How will Amazon leverage Whole Food’s brick and mortar network? Whole Foods has 456 locations across 43 states in the U.S. as well as a presence in Canada and the U.K. It tends to be in prime real-estate locations targeting a higher-end demographic. It could become a significant branding presence for Amazon and a way to increase its physical presence.
- What does this mean for Amazon’s retail food business? It will allow Amazon to dramatically increase its importance in the retail food arena. Besides Whole Foods’ $15.6 billion in sales, Amazon has struggled to get Amazon Fresh to be a significant player in the retail food game. Whole Foods is the most credible player in fresh foods in the industry. Branding an online fresh service with Whole Foods brand and perishables know-how could be a game changer.
A few great thoughts for Amazon. Again, this will be interesting to watch this big game-player and changer leverage this.
For Whole Foods this is huge for them as well as Neil reports:
- There has to be significant overlap between the Amazon Prime customer and the Whole Foods core consumer. There should be synergies to mine as the two companies collaborate.
- It instantly makes Whole Foods a player in the growing online food retail business. One of the repercussions of this deal will be in understanding the impact on Instacart, which counts Whole Foods as its largest customer.
- It provides Whole Foods with greater leverage and buying power, which should allow it to reduce core prices and become more competitive, which was one of its stated objectives in its turnaround efforts.
You can read the whole article here by Neil Stern. I am excited to see what this does for both businesses, however, I am sure the changes will be gradual.
*NICK WINGFIELD and MICHAEL J. de la MERCED report from the NY Times:
“Buying Whole Foods also represents a major escalation in the company’s long-running battle with Walmart, the largest grocery retailer in the United States, which has been struggling to play catch-up in internet shopping. On Friday, Walmart announced a $310 million deal to acquire the Internet apparel retailer Bonobos, and last year it agreed to pay $3.3 billion for Jet.com and put Jet’s chief executive, Marc Lore, in charge of Walmart’s overall e-commerce business.” Read more here.
They go on to report more insight on the two companies and the competitor Walmart. There seems to be a lot of buying power out there to grow & sustain the market share.
What can we all learn from this as business owners?
I understand that some of us entrepreneurs do not have the deep pockets like Amazon or Whole Foods, but what can we take away here to implement and grow our businesses? To assist us in cutting through the BS of life, and or business?
I would love to hear from you any ideas/suggestions on how you can implement any strategies here. Here is what I take away:
- Planning is vital when owning a business. Do jump with excitement and REACTION! Respond and plan.
- Allow things to unfold, time! Strategize your moves, timing, and the end game or destination! Always keep the solution/end in mind. Then you can plan, strategize the steps to arrive there.
- Lastly and most importantly, learn to negotiate! Go into any meeting, any conversation with the attitude that the final destination will be a win-together-situation!
As humans, we take things so personally, especially our businesses. We have self-induced judgments and we impose this upon others. We want to win and be right, however, Stephan Covey said in his 8th habit of a highly successful person that a win together mindset and a healthy environment is required for one to be a successful entrepreneur.
Remember let’s cut through the BS to get to BS!
*Neil Stern is a contributor for Forbes
* NICK WINGFIELD and MICHAEL J. de la MERCED report from the NY Times
*Stephen Covey’s Book: http://amzn.to/2sHa3Ae