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Amazon Web Services : nearly 30% of the market share in the world cloud infrastructure

Customer convenience

Amazon prime subscriptions - grew by 53%

Adaptability
E-commerce
Increasing usage of technology.

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Key drivers in the business environment for Amazon

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Key drivers in the business environment for Amazon

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Adaptability
E-commerce
Increasing usage of technology, not only for R&D
Government influence on technology
Political stability in developed countries

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Expanding (entering a new market)
A merging of existing customers
Making new relationship with suppliers and inverstors
Government support for merger
Creating more competition in the market
The economy will benefit from the fall in prices
distribution will be faster for customers
Increase in online buyers

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- Relationship building (customer & supplier)
- Expansion
- E-commerce
Adaptability

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Key drivers in the business environment for Whole Foods

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Key drivers in the business environment for Whole Foods

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Healthy lifestyle trend is increasing demand
Environmental policies
Higher household income
Rural-to-urban population shift

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organic food as demand increased

Enviaronmental environment

Increased demand on Fair Trade products .

Supermarket that cover the needs of Vegan and vegetarian people.

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E-commerce
Technology development

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Amazon is known for its low prices, helped set Whole Foods free from that reputation.

Prices dropped as much as 43% on a range of Whole Foods products.

Price cuts in the first two days after the merger boosted customer traffic by an average of 25% over the week before.

The lower prices are now in all 470 Whole Foods locations across the United States, and could have longterm effects on Americans' perception of organic and healthy food. If organic produce remains at a lower price point and is more accessible for online orders, it may normalize organic food for a greater number of Americans — not just those who buy $3 avocados

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Green lifestyle
More interest in organic products

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-Strategies for short,medium and long term.

-Strategy Based on consolidate operations for market research analysis.

-Also invest in market strategy, sales & R&D keeping itself future developed.

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Key drivers in the business environment for Amazon 

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Key drivers in the business environment for Amazon 

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Customer focused.
Take risk from market leadership.
Incorporate owners values.
Build culture thats right for company.
Avoid bureaucracy.

Increasing accessibility to technology.
Reduced cost of technology and logistics.
Globalisation.

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People are busier, time is more valued convenience
A more technologically involved environment

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Differentiation strategy: targeting specific clients

Middle-High prices

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Selling Amazon Echos, making Whole Foods products available on Amazon.com

The decision to not allow local brand managers to pitch their products to store customers.

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Culture, structure and leadership style for Amazon

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Culture, structure and leadership style for Amazon

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-tough culture, a reputation for haveing hard-working employees
-Amazon’s evaluation system is relentless. Employees don’t have time to recover their own life

-visionary and efficient leadership.
-Look at future
Eg. $25000 prize to design the best picking robot , and they focus on machine learning

Culture, structure and leadership style for Whole Foods
-an large, enjoyed a much different atmosphere
-one of America’s ‘Great Places to work’
-willingness to let people’s individuality shine through
-employees’ belief in the company’s mission and purpose

-Whole Foods Market maintains an organizational structure that empowers the firm to flexibly address changes and differences in markets.
-based on differences in market condition
-Whole Foods Market has a global hierarchy in its organizational structure.(a) global headquarters, (b) regional offices, (c) facilities, and (d) stores.

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Industry success factor in whole food merger market

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Industry success factor in whole food merger market

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-Making actions in position amazon knew that whole weat customers are literally ‘rich’ .

• Secondly, interesting fact , whole foods has a strong private label business on 365 brands.

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Culture, structure and leadership style for Whole Foods 

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Culture, structure and leadership style for Whole Foods 

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- Strong relationships
- Effective communication
- Trust
- Team working

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Amazon go grocery store eliminates cashier position entirely and instead use technology- this likely leads to job loss for the whole food workers.

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Culture, Structure and Leadership (Whole foods)

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Culture, Structure and Leadership (Whole foods)

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Organizational culture :

1. Focus on teams-Supporting team member happiness and excellence

2. Participation -employee participation in the context of its organizational culture

3. Semi-formal interactions-social relations with other employees

4. Transparency- financial reports not just to investors but also to employees

Divisional organizational structure:

1. Four-tier hierarchy-main levels or tiers, namely, (a) global headquarters, (b) regional offices, (c) facilities, and (d) stores.

2. Geographic divisions-address differences among regional markets

3. Functional structure in each division-each regional administrative team implements mandates based on regional market conditions

4. Teams- supports business profitability through sales talk and retail service directly provided to customers

Leadership style

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Whole foods focus on developing their own brands/products
Save money on marketing (word of mouth)

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Culture- Vertical lines of Authority, hierarchical culture.
Strong culture of teams, forbs article . Employees are referred to as team members. Culture that fosters team working.

Leadership style- John Mackey. Much like culture large emphasis , on team working, information from team members taking peoples ideas in to consideration before making a decision.

Structure - 4 tier hierarchy
1. global headquarters
2. regional offices
3 facilities
4 stores (only few)

geographical divisions regions of the us different demographics require unique style for different regions.
functional structure in each division
sub teams.

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- Growth of grocery delivery sector
- Entering the meal prep and meal delivery industry
- Wallet less payments
- Stronger market presence

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Customer loyalty
online marketing (sponsored search)
Being able to deliver products everywhere, linking with drivers opening distribution centres in major cities

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Provides exotic food not available in other stores
Focus on carrying high quality healthy food
Targeting individuals and families whose income is well above the national average, those who are conscious about healthy lifestyle rather than how much they are spending
Do not provide discounts
The first grocery store to be "Certified Organic" in America
Relying on its stringent high quality standards
Supply chain: ensures that its products are produced without violating any laws

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Amazon become an national Grocery competitor overnight.
Increases their range of distribution methods.
Access to an already set up and established grocery chain avoiding setup costs.
Amazon has an negative reputation merging with whole foods will help improve their image.
Potential to reach new stakeholders.

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Cheaper prices

Younger population

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Culture: wholefoods empowers learning enviroment that promotes self-motivation and success.
Employees are team-members.

Leadership:

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Diversity
Team work
Effective communication

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Advantages of the merger for Whole Foods

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Advantages of the merger for Whole Foods

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Merge will increase whole foods reach to new customer base.
New publicity options.
Increase marketing budget.

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a) "Last mile delivery problem"  there are lockers in wholefood for added security.
b) refrigerated distribution centers closer to where people live , rather than sending food from an amazon warehouse. People are gtting there food locally
c) competitive

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6. Culture, leadership, structure Amazon

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6. Culture, leadership, structure Amazon

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Structure - global based function groups, each major business has its own dedicated team and group

Culture - Forbs, Jeff Bezos 2 pizza rule, every team needs to be small enough to be fed by 2 pizzas allows good communication within groups and have understanding of aims and objectives

Leadership style- Jeff Customer is king, everything the customer doesnt like will attempt to be removed eg slow loading of website
Expect more from your employees always strive for them to be better eg more effective at answering emails

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As with most new Amazon initiatives, the company is folding its $99-per-year membership program into the Whole Foods mix.

Amazon Prime customers will receive additional discounts on some Whole Foods products in the future.

Prime members will automatically be part of a Whole Foods customer rewards program that gives them discounts and other store perks.

Amazon loves to add value to its Prime program in order to encourage as many people as possible to sign up, and it hopes that adding a Whole Foods component will lure new members to the program.

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Culture:

Leadership: Jeff Bezos
Leadership Principles (Custome obsession,Learn to be curious, hire and develop the best,think bigearn trust...)

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A bigger impact in physical retail
Faster delivery
Competitive edge against google
amazon has a stronger presence in homes as they are selling household items

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1. efficiency,  industry requires ruthless efficiency to minimise costs and use employees most effectively
2. correct usage of data, using data on customers in the best way for the company eg advertise other products
3. customer service, constant price competition means good experience with customers would encourage repeat business

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Lower Prices
Development of e-commerce
fast delivery
product differentiation (Amazon video, music...)

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Top quality organic food
First organic-only supermarket

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Improving the reputation in regards to pricing (reputation of being overpriced)
innovation an technology- helps to lower labour costs: (Amazon go)

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Amazon penetrates in a new market
Different distribution methds
Identification with a higher standard product

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8. Supermarket industry success factors 

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8. Supermarket industry success factors 

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1. Variety customers want a big offer different products
2. convenience, good location of stores eg highways close to other stores bus rail
3. good customer experience, pleasant atmosphere to be in good employees helpful in store ect.

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Challenges of the merger for Whole Foods

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Challenges of the merger for Whole Foods

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Whole foods will have reduce prices to match an mass market rather than the niche they were operating in meaning an reduction in potential profit.
Mismatch in each company's method of operation.
Culture clash.

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E-commerce segmentation
Amazon has successfully positioned itself as Glocal

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Stronger brand retpetition
more technology and renovation
Lower prices
New costumers

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Competitiveness
Distribution centres

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Organic food market not just regular foods

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Culture, structure, and leadership style for Whole Foods

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Culture, structure, and leadership style for Whole Foods

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Five senior executives have functioned as CEO committee
Team approach to the organisation: employee empowerment