Acquisition Safeway's Acquisition of Sobeys Term Paper

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The stores are dramatically redesigned with earth-toned decor, subdued lighting, custom flooring, unique display fixtures and other special features to create a warm, inviting ambience that Safeway believes significantly enhances the shopping experience, At year end 2010, 1,439 stores, or 85% of the store base, were Lifestyle stores." (Safeway, p. 12)

This suggests that some Sobeys stores -- likely contingent upon the demographic nature of communities serves -- would be candidates for remodeling according to the 'Lifestyle' design. Additionally, all Sobeys stores would carry Safeway's 2008 initiating branding campaign for its line of organic foods called Better Living Brands, which included O. Organics and Eating Right. (p. 34)

In addition to taking on the brands that currently distinguish the Safeway shopping experience, Sobeys would bring its own line of brand names under the Safeway umbrella. According to its own informational website, Sobeys is the owner of not just Sobeys markets but also IGA, Foodland, FreshCo, Price Chopper and Thrifty Foods, all of them serving provinces and communities throughout Canada. By assuming ownership of Sobeys, Safeway would gain both its geographical reach, its brand name variation and the demographic variation that comes with it.

Distribution Network:

Sobeys sophisticated Distribution Network is one of the greatest assets acquired by the new parent company. Indeed, by virtue of the technology and processes in place in its newest warehousing facilities, Sobeys is one of the leading food retail businesses in this area. According to a video presented on its website (http://www.sobeyscorporate.com/en/video.aspx), Sobeys has recently constructed a warehouse facility in Vaughan, Ontrario that offers over 500,000 square feet of floor space, is over 65 feet high and relies primarily on a highly integrated and automated 'picking system' designed by a German partner and called Witron.

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Witron uses picking devices that respond to an Enterprise Resource Planning-driven Information Technology system, with inventory and shipping conducted immediately and according to computed demand.

This makes the Sobeys stores a cutting edge outlet for accessing distribution networks throughout Canada. That Safeways Ingredients for Life and Better Living Brands will be distributed through this outlet denotes a widely expanded opportunity in this market context. Moreover, the technology used to create the sophisticated distribution network for Sobeys could be explored as a possible way to improve business processes and efficiencies across Safeway as a whole. This is a future consideration to bear in mind as Safeway examines the assets that come with its acquisition of the Canadian retail chain.

Store Locations:

In its corporate history, Safeway is shown to have taken an active and sometimes aggressive stance in evaluating the performance of its acquisitions. Such is to say that in the case of most of its acquired brands, Safeway has eliminated store locations that are not performing up to its expectations. To this point, Safeway closed 12 underperforming stores from its Domicks chain in early 2004, 18 stores from its Vons Division later in the year and 26 of its own stores in the Texas Division in 2005. (Safeway, p. 33-34) Though Sobeys has 1300 store locations at the time of its acquisition, it does compete with Safeway locations in Alberta, Vancouver and Winnipeg. It remains to be seen what actions Safeway will take with these locations but it is clear that it will act according to performance in eventuality.

Number of Employees:

As with its evaluation of leadership, Safeway would likely eliminate redundancies at several levels of employment. However, in maintaining all Sobeys store locations until further notice, Safeway stands.....

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