In this paper, the analysis of Whole Foods and Wild Oats merger will be provided, and some important answers will be given. Therefore, while summarizing the entire case of Whole Foods and Wild Oats Company merger, it can be said that this case provided detailed information regarding both company backgrounds and their merger stories. In this case, it is mentioned that Whole Foods is an old brand that is serving the organic food industry since 1980. The company proved it within the industry and followed strong strategies to grow their business. The management of this company strived hard to increase the number of stores in different cities and states. Therefore, John Mackey the chairperson and CEO showed their interest to acquire Wild Oats Company to benefit their business in the long run. The background of Wild Oats Company clearly shows that it was an underperformed company since beginning. However, it was a competitor for Whole Foods as it was dealing with the natural food industry.
As Wild Oats Company was going in debt so, the company accepted the deal offered by Whole Foods Company. When integration of both stores started and Wild Oats handed over one-third of their stores to Whole Foods FTC claimed a lawsuit against Whole Foods and Wild Oats merger. Despite the challenging environment Mackey and his management team was working strategically and they were integrating the benefits and payroll functions as well. Moreover, the Whole Foods Company already sold 35 outlets, closed 12 and totally acquired one-third stores of Wild Oats. It was a great start to their deal, and it was threatening for other competitors in the market. Therefore, FTC took action against Whole Foods as they did not want Whole Foods to work in both Organic as well as natural food industry.
On the claim of FTC, the court was analyzing the situation and FTC Appeal, but it was not giving any final decision to break the deal. However, Whole Foods CEO Mackey was becoming reluctant on his decision. The reason was that he was worried that how he will undo the deal because it will cost them great loss. He was expecting that the margin of benefits will be decreased, and he will face loss in millions of dollars. Therefore, he was unsure of his decision and started deciding his next move. However, he was unable to decide that what will be the possible implications of the court’s impending decision. As they already had invested a lot in the acquiring process (Aprill, Payne and Ring 11).
1. While considering the situation of Wild Oats Company from their start, it can be said that this company is continuously facing losses in their business. In other simple words, it can be said that this was a historically underperformed company. On the other side, Whole Foods company sales and market reputation were much better than Wild Oats Company and by acquiring a company that is under debt already Whole Foods might face problems, and it could be a baseless decision to acquire an underperforming company. However, the fact is that Wild Oats Company was operating in Rocky Mountains, Pacific Northwest, and Florida and after this merger, Whole Foods entry in this area could have provided them great increase in their sales (Aprill, Payne and Ring 8). As Wild Oats was operating in all those areas where whole foods were unable to stable its position and by acquiring a large company of natural foods market, Whole Foods could attain competitive advantage, and it could have become a market leader. Therefore, it can be said that this merger makes sense for the growth of whole foods company. By doing so, Whole Foods sales would have increased, and it can open more stores in further new areas.
2. The merger of Wild Oats and Whole Foods was a serious threat to other competitors in the market. Considering that FTC claimed against the whole foods for acquiring Wild Oats. FTC wanted to block the merger, and thus he filed a lawsuit against wholes foods. It was because FTC never wanted the monopoly to be created due to the merger of both organic and natural food industry. Moreover, the traditional grocery stores were assuming that the merger will create an anticompetitive market, and it will become a giant company that will cross all records of other grocery companies. On the other side, Whole Foods and Wild Oats respond to this claim in a very positive manner. They cleared this point that they both deal with natural and organic food industry only whereas, supermarkets and their industry are different. They all have alternatives at the mainstream of the supermarkets. Therefore, according to them, the merger should not be stopped. As they already signed the deal and they started working on their merger, so it was difficult to stop this because many wild oats stores were rebranded under the whole foods name. Moreover, all benefits and payroll functions were also completely integrated. The merger was strategically planned properly, and it was the reason that integration process showed careful planning and core competency. Thus, the US court and district court could not take the decision to block the merger and rule for FTC (Aprill, Payne and Ring 10).
Works Cited
Aprill, Chris, et al. Whole Foods Market And Wild Oats Merger . Case Study. Virginia : Darden Business Publishing, 2008. Print.
