Question

Using the link below, access and closely read, "A Supermarket Merger Will Redefine What You Buy At The Grocery Store." Respond to the following questions and/or statements: What are the external factors influencing the decision Kroger made to acquire Albertsons? Do not just list some factors, but also provide clear, well-written explanation of each factor. What internal factors of either or both companies will need to be addressed in this merging of the two companies and as they operate as one company? What is the strategy behind this acquisition? Be sure to remember the difference in goals, strategy and tactics, as discussed in the Week 1 class meeting! Your response should be a well-written explanation/discussion of the above questions. Be brief, but clear and complete in your response. A Supermarket Merger Will Redefine What You Buy At The Grocery Store Once you complete your response, to the questions/statements above, use the information you developed to prepare an External Factor Evaluation

Answer 1

Kroger's acquisition of Albertsons is driven by external factors like competition and FTC regulations. Internally, the merger will necessitate merging overlapping departments and addressing cultural integration. The strategy is to increase market share and achieve economies of scale.

Step-by-step explanation:

The decision by Kroger to acquire Albertsons is influenced by external factors such as market competition and regulatory scrutiny from entities like the Federal Trade Commission (FTC).

The FTC examines data on actual competition, prices, profits, and market presence of companies before and after such deals to ensure that antitrust laws, which encourage active competition, are not violated.

For instance, in the Whole Foods Market and Wild Oats Market case, the FTC required the sale of the Wild Oats brand and other assets to maintain local competition after a detailed analysis of competitive impacts.

Regarding internal factors, post-acquisition, the combined company will need to address the merging of overlapping departments like accounting and sales, potentially resulting in staff reductions and the need to unify differing organizational cultures and systems.

These processes could introduce stresses similar to those experienced during corporate downsizing, affecting employee morale and retention.

The strategy behind the acquisition would likely be to increase market share, achieve economies of scale, and enhance competitive positioning within the supermarket industry. This is distinct from more immediate tactical moves or broader long-term goals such as sustained growth or market domination.