Amazon will face a multitude of threats in its acquisition of Whole Foods. Namely, Whole Foods faces intense competition within its industry and thus will have a difficult time generating profits and maintaining a competitive edge. Secondly, Amazon will struggle to lower Whole Foods’ prices, in attempt to get rid of its “Whole Check” reputation for high price points because of higher wage levels being applied all over the world. Lastly, the environmental threat of the rise of GMOs and climate change can lead to product obsoletion in the long term. Overall, intense competition, climate/GMOs, and increased wage levels cause for serious threats in Amazon’s attempt at renovating Whole Foods’ image and being able to generate sustained growth.
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Specifically, in Canada’s two biggest provinces economically, Alberta and Ontario, the minimum wages have soared. In Alberta, “the minimum wage will rise by $1.40 to $13.60/hr on October 1, 2017, and a further 1.40 to $15 per hour on October 1, 2018 (Swartz, 2017)”. In Ontario, legislation was passed to increase minimum wage from $11.60 to $14 January 1st 2018 and from $14 to $15 the succeeding year. The grocery industry as a whole has found it challenging to accommodate this Legal/Political threat. Two examples of this has been Metro and Loblaws. Both companies have come out to express their concern about the new wages and illustrate their plan to combat them. Loblaw Companies Ltd recently stated that “Labour expenses will increase their labour expenses by $190 million in 2018 (Braun, 2017)” and will attempt to offset those costs through cost reduction because they are reluctant to raise prices in such a competitive industry. This means that Whole Foods are going to have to create similar strategies in order to offset these cost in order to maintain their current prices, which are already very high. This deters them from any possibility of radically lowering their prices to get rid of their “overpriced” stigma. However, it is possible the wages are too much to handle. For example, Metro, has not been able to cut …show more content…
A genetically modified organism, otherwise known as GMO’s,” are organisms whose genetic material has been altered using genetic engineering techniques (Plumer, 2013)”. These products are not considered organic, and the more prevalent they are, the less available organic products are. Over the past 15 years, the rise of GMOs has grown exponentially. For example, “more than 93% of corn, soy, and cotton in the US is now modified, a 33% increase from 2000 (Plumer, 2013)”. Thus, this threat could reduce the ability of Whole Foods to satisfy their customers with organic products that have little to no GMO ingredients. An additional threat to Whole Foods and their products is the increasingly dangerous issue of climate change. The radical heating of the earth in recent years has caused shortages of various organic products such as avocados. This has resulted in radical price increases for many products and made seriously negative implications to organic farming. For example, “in 2010 and 2012, high nighttime temperatures affected corn yields across the U.S. Corn Belt, and premature budding due to a warm winter caused $220 million in losses of Michigan cherries in 2012 (EPA, 2017)”. With Whole Foods depending on the natural environment for their products, incidents such as these serve as an indicator for what is a very serious and
Specifically, in Canada’s two biggest provinces economically, Alberta and Ontario, the minimum wages have soared. In Alberta, “the minimum wage will rise by $1.40 to $13.60/hr on October 1, 2017, and a further 1.40 to $15 per hour on October 1, 2018 (Swartz, 2017)”. In Ontario, legislation was passed to increase minimum wage from $11.60 to $14 January 1st 2018 and from $14 to $15 the succeeding year. The grocery industry as a whole has found it challenging to accommodate this Legal/Political threat. Two examples of this has been Metro and Loblaws. Both companies have come out to express their concern about the new wages and illustrate their plan to combat them. Loblaw Companies Ltd recently stated that “Labour expenses will increase their labour expenses by $190 million in 2018 (Braun, 2017)” and will attempt to offset those costs through cost reduction because they are reluctant to raise prices in such a competitive industry. This means that Whole Foods are going to have to create similar strategies in order to offset these cost in order to maintain their current prices, which are already very high. This deters them from any possibility of radically lowering their prices to get rid of their “overpriced” stigma. However, it is possible the wages are too much to handle. For example, Metro, has not been able to cut …show more content…
A genetically modified organism, otherwise known as GMO’s,” are organisms whose genetic material has been altered using genetic engineering techniques (Plumer, 2013)”. These products are not considered organic, and the more prevalent they are, the less available organic products are. Over the past 15 years, the rise of GMOs has grown exponentially. For example, “more than 93% of corn, soy, and cotton in the US is now modified, a 33% increase from 2000 (Plumer, 2013)”. Thus, this threat could reduce the ability of Whole Foods to satisfy their customers with organic products that have little to no GMO ingredients. An additional threat to Whole Foods and their products is the increasingly dangerous issue of climate change. The radical heating of the earth in recent years has caused shortages of various organic products such as avocados. This has resulted in radical price increases for many products and made seriously negative implications to organic farming. For example, “in 2010 and 2012, high nighttime temperatures affected corn yields across the U.S. Corn Belt, and premature budding due to a warm winter caused $220 million in losses of Michigan cherries in 2012 (EPA, 2017)”. With Whole Foods depending on the natural environment for their products, incidents such as these serve as an indicator for what is a very serious and