Whole Food in Texas - Essay Example

Assignment) Case Study Whole Food is a Texas based food company which was founded by John Mackey and his girl friend Renee Lawson in association with Mark Skiles and Creig Weller in 1980. John Mackey was appointed as the chairman and CEO of Whole Foods. His acquisition strategy regarding independent small food stores and groceries helped him to uplift the company to be the nation’s one of the largest health food stores. The company aimed not only at the product quality but also the betterment of the employees, customers, shareholders, and the environment.

They largely focused on social service activities such as sponsorship of several charitable foundations, and low interest loan program for local farmers in addition with the economic development operations. In order to meet the customer satisfaction, the firm expanded its prepared food section and added a restaurant area; it influenced the customers to spend more. The company had given comparatively good salary and incentives to the employees considering them as team members rather than employees.

That was the real secret behind the success of the company. The CEO received only $1 per year in salary whereas the company executives were earning 19 times the average annual salary of full time team members. It shows his higher concern toward the success of the company. Wild Oats Markets is a Colorado based food company founded by Gilliland Elizabeth Cook in 1987. The company’s main growth strategy was new store developments and acquisitions. By this concept, they could acquire ranges of business ventures such as natural food stores and farmers markets.

Even though Wild Oats is comparatively a smaller company, it competed with Whole Food Markets. Gilliland was the first CEO of the company and he was replaced by Perry Odak in 2001, and subsequently by Gregory Mays. This frequent appointment and termination of company’s executives led to many problems such as store closing, problems with suppliers and doubts in money collection that affected the smooth operation of the company. The Whole Foods Market made a merger agreement with Wild Oats Market on 21st February 2007.

The merger would positively influenced Whole Food as it would lead to immediate entry into several new markets. In this period, the market trend was highly concentrated on organic and natural food industry. The increased media focus on the negative aspects of the fast food opened up a favorable situation for natural foods. Therefore, the integration strategy of these highly reputed firms would fasten their economic growth as well as international expansion. The study clearly reflects that these two organizations are well established which also possess experienced and skilled management team.

Hence, this amalgamation process may assist the integrated firm to take advantages of cost reductions, greater purchasing and bargaining power, and new team-member talents. This integration seems to be vertical merger and it increases the market reputation of the company. In order to prevent this merger deal, the Federal Trade Commission (FTC) filed a law suit against Whole Foods. The FTC argued that the merging firms were the largest players in the food industry and this integration would certainly impinge on the developmental expectations of traditional food industries.

However, Whole Foods and Wild Oats successfully defended this suit and attained court sanction for the amalgamation. Works Cited “The Whole Foods Market and Wild Oats Merger”. Darden Business Publishing, University of Virginia, Dec 23, 2008.