Acquisition and Modifications of Arugula Grocers - Essay Example

?Strengths: Freshest, healthiest products in the market at Competitive prices; The company provided according to the CEO, Kathleen Norton, the freshest, healthiest products and the fact they extended the same to compassionate caring of their customers. Evergreen Natural Markets offered healthy vegan products that are gourmet, natural, and organic at competitive prices and this gave them an edge in this highly conservative market segment. This marked them out to those customers who preferred the freshest products in the market, majority of whom lived in their market of operations. Unified and cohesive team/ workforce ; The company has a unified and cohesive team that offer high quality service, a unique and an entrenched customer service platform that is in place rooted in the founder’s vision. The patriarch of the firm had built a culture of intricate customer service; they went deeper by understanding their customer’s needs completely Culture of intricate customer service; Through innovative means of handling their customers such as the delivery service Evergreen established its pedigree in customer service compared to its competitors. Customers and market: Their market comprised of highly educated, upper income, health conscious and informed; this means that they were able to sell easily their natural and organic foods to them. The company prided itself on immaculate service and superior and fresh products, meaning that were able easily convince their target market to buy those goods from them. The market for natural products in Rocky Mountain States had the highest rates of growth in terms of market expansion, given as 11.4 percent against a Midwest rate of merely three percent. Original marketing expertise: Their marketing technique even though simple, but it has been effective over the years, as the customers have grown accustomed to it. The quirky, original hand painted signs displayed both outside and indoors had a remarkable success in imprinting the company’s brand name. Strong brand and reputation: The founder had built a strong brand name through provision of quality products over a long period luring many people to the image of the brand; this in fact aided the company in the process of acquisition. Effective and efficient management: Their acquisition strategy and general management style and decentralized system of control had achieved considerable results for the firm. Their style of management was very sophisticated for such a relatively small firm; as such, styles were typical of large firms, the company introduced comprehensive appraisal of their operations. The firm holds on to their staff especially those who occupy important decision-making roles. The overall strength of the stores and the firm itself is the company’s CEO; she is the rock of the company making important decisions that have propelled the company to its heights from the humble beginnings that it was founded upon. Norton oversaw acquisitions that contributed to a considerable degree to the company’s overall gross profits; the growth in the company’s profit is the foundation of its growth. Weaknesses: Risky acquisition style: The Company has lost money before in its mergers and acquisitions in the past three years; this process of investing in loss making enterprise was not properly thought out. Non-prime Location of the company stores: The company was located in areas that were lower in prime compared to rival supermarket chains in the same region; this might affect its level of comparability and growth potential. Lack of superior access to distribution channels compared to competitors: Larger competitors in the same area had the advantage of own branding of their own goods unlike the case study, whose products were perishable and therefore unlikely to be branded. Opportunities: Political/Legal A new cross regional market: By moving out of the Rocky Mountain West region, the company had expressed its thirst for a market far away from the region of its establishment. The acquisition of the Arugula Grocers is a huge move that will aid it in accomplishing the growth of its traditional establishment. The new acquisition represents a new mode of acquisition much different from their previous acquisition modes, reflecting a structure that if well cultured might result in comparatively higher returns in the future. International markets: The company has not yet untapped the international markets that would be much profitable especially with global trend of people taking organic foods Economic Positive economic outlook: The economic outlook for the company is impressive, considering the persistent drive by national and regional bodies for the society to adopt a more healthy life and food choice. In retrospect, this is exactly the kind of service that the company is offering to their customers in the Rocky Mountain West region and their subsequent new regional acquisition. Weak Competitors: The company provides relatively fresher products compared to the company’s rivals, an area that demands full exploitation to gain maximum benefits, in fact, 65 percent of the company’s profit are because of this venture, through this venture, and Evergreen gained competitive advantage over the competitors in the Rocky Mountain West. Socio-cultural/Environmental Culture that appreciates diversity in the market: Evergreen culture that cares about the wellbeing of the company’s customers and one another, which reflects on the local clientele and employees premised on the belief that knowledge leads to provision of better choice endears to its local/regional people who are the potential client Society trend of eating natural and organic foods: The trend towards the eating of green, healthy foods offers and create a great market opportunity to Evergreen to be tapped into Conducive climatic conditions: The climatic conditions in most of its locations are appropriate for the growth and cultivation of organic foods and this offers a great opportunity for continued existence in the market Technological Investing in efficient technology reducing cost: The company hired out an officer whose duty was to lead the company into the new generation’s ways of doing things. Such innovativeness is the key to the success of the enterprise in the future, it will bring with new ways of doing things that will contrast sharply with the manual way of conducting day-to-day business. With its position as the leading natural foods retailer in the Rocky Mountain West region, and accompanied by new ways of conducting their business, this is a spur for future’s growth. Threats: Political/Legal Diverse political climate of new acquisitions: This will pose a threat since the company will be faced by many different legal and tax obligations in different States, which may be a challenge posing threats of legal cases for non-obligation Economic Stiff competition: The Company has many competitors in a market that is increasingly becoming popular which may reduce its income and sales in future Threats from rivals firms for poaching their employees: The firm is constantly facing threats from rival firms who want to poach their top performing staff members much to the chagrin of the company which damages its brand reputation Socio-cultural Uncertainty in the society-eating trend in future: The Socio-cultural threat to Evergreen is among its greatest threats since this company is currently relying on the trend towards the eating of green, healthy foods. If this were to change, then it is likely that the entire company may end up collapsing; an occurrence that must be prevented at all costs. Technological Failure to adjust swiftly with technological changes: The technological threat to evergreen was prevalent because of its swift expansion and since technology is a fast-paced industry that is continually changing, they fear that such highly dynamic environment might push them out of business Environmental Climatic conditions: The environmental threat to Evergreen may be because with global warming, the conditions necessary for the growth of the fresh products it sells may be changed. This is the concern of every business, the changing environment from a rich to a dryer one because of human activities, being in the organic food business Availability of cheaper GMOs: they face constant threats from companies that are providing GMO’s as they are easily available at a cheaper offer unlike their organic counterparts reducing their market base and sales Evergreen’s Success: One of the reasons why Evergreen has become so successful is the fact that it has been able to retain the loyalty of its customers through the maintenance of the quality of its products. In addition, even when this company makes acquisitions, it always ensures that it keeps all the stores acquired local, and the previous management intact. In addition, the continuous rate of acquisition as well as the expansion into new markets, namely those east of the Rockies. The able management of the company as well as the development of a strong organizational culture has ensured that all its employees work towards the achievement of it goals. The optimistic attitude that is displayed by the management of Evergreen towards the acquisition of other chains is perhaps the reason why this company has remained successful and accounts for its continued growth. Improved Performance: It is a fact that all the stores that have been acquired by Evergreen have immensely improved in their performance and this can be attributed to the management style of this company. One of the reasons why these stores have improved in their performance is the fact that Evergreen has tended not to make any radical changes within them soon after acquisition. Instead, it has ensured that the management of these stores remains intact for a while longer while an analysis of the changes that can be implemented in made. In addition, Evergreen treats all of the employees of these stores with respect and their jobs are secured so that there is a swift change of loyalty towards this company. The products that these stores sell are produced locally, with very little being brought outside the locality and this has ensured that not only the cost of the products but also their transportation has become cheaper. Moreover, Evergreen, with its policy of selling only the best quality product has created a confidence in individuals who would otherwise not have bought anything from the newly acquired stores. Arugula Acquisition and Modifications: The approach that has been adopted by Evergreen in the acquisition of Arugula has involved the maintenance of the latter’s management. While Arugula’s management was ready to leave as soon as the acquisition deal was completed, Evergreen persuaded it to remain for another six months so that there could be no disruptions in the management of Arugula. In addition, there were no mass firings of staff that was attached to Arugula and these were instead retained just as had been the case in Evergreen’s previous acquisitions. One would say that among the first modifications that Norton should make at Arugula is the establishment of a management-employee communication system similar to that at Evergreen. This is to ensure that the employees at Arugula know that the new management actually cares for their wellbeing, as is the case with other Evergreen employees. Read More