Question

Based on the following strategy of merging with 7/11 for Amazon Go can you prepare rough financial analysis? Also can you tell whether this is acquisition or joint venture? strategy

Issue: How to grow Amazon Go

Strategy : They would merge or acquire 7/11.

Procedure

7/11 have in excess of 8000 stores in USA and for keeping up the overall revenue high, they have to propel their store with the development innovation. 7/11 is trying another store idea in Japan, which will dispose of clerks same as amazon go. 7-Eleven's experimentation with clerk less stores comes soon after Amazon revealed its Amazon Go stores, which is changing the regular accommodation store idea. At Amazon Go stores there are no clerks to ring the register, they are all be supplanted by innovation that screens client traffic and buys, and guarantees that proper charges are applied.

Amazon Go store's primary element was certainly the supper packs.

There were many feast bundles accessible for procurement. All in all, the costs were incredible and the choices appeared as though they were on the more beneficial side yet it was likewise evident that specific things were rapidly coming up short on stock where in 7/11 normal staff is there to keep up things in stock. In 7/11 expense related with contracting, observing, and overseeing work in a time of the lowest pay permitted by law climbs and state orders - which make it difficult to enroll and hold modest work and this cause amazon to go too converged with 7/11 to exhibit its innovation.

7/11 contending with Amazon is an unnerving possibility for any officeholder business. This is fundamentally because of the way that Amazon works on an extreme model whereby it doesn't profit – and that is a major issue for each other basic food item chain, which needs to battle with razor-meager edges as of now.

Purchasers don't confide in others to Inspect and Select the things I recorded. Most of basic food item things requested online comprises fundamentally of Center Store things: bundled nourishment, general product, refreshments, paper towels, excellence, and home consideration, for instance.

Amazon serves clients in each state in the U.S. albeit hypothetically workable for Amazon to obtain 7/11 and scale the organization, it would be substantially harder to do as such than gaining 7/11, which previously had a nearness across the nation. I likewise picked 7/11 since it had a well-earned notoriety for being an innovator in retails.

Amazon Go start the procurement assessment process by distinguishing development openings in business, markets served. To decide development markets and administrations, Amazon Go should gather and examine broad information, including the accompanying: customer inception; socioeconomics (populace, age, work/joblessness rates, pay); bosses; different contenders; business, program, and administration blend (execution and gainfulness by administration line); field staff; representatives; use/case blend (request projections); focused cost/charge position; and purchaser inclinations/sentiments.

Advantages

It will give a full fledge entry to Amazon in the grocery store business and also presence its strength all over the world as 7/11 have more than 70000 stores in the world. Strong consumer availability with advance technology, amazon go will become a leader in grocery market. Deal will give amazon infrastructural boost; whole food grocery stores are speared across some of the most affluent neighborhoods in the United States. Direct competition with Walmart which is bigger in size and business model but technology wise their operations is pretty changed.

Limitations

Technology wise limitation can be there as in many countries where 7/11 operate are not ready as to implement the technology which amazon go is using. All Consumers are not ready to or equipped to understand the cashless technology as 56% consumer still not using smartphones, they all are depend on offline technology standing in line and pay the money. Amazon go also increase job losses for retail workers. I am not sure amazon go will work in every country as most have a problem of population and density. Technology would not be able to keep up with that. What works in the West need not necessarily work in developed countries. Concepts need to be tested thoroughly in countries culture environments.

Answer 1

Based on the strategy for merging 7/11 with Amazon Go, rough financial analysis indicates that the Amazon Go merger with Seven Eleven stores will save costs in terms of recruitment and payrolls but the impact on sales is uncertain. Currently Amazon Go stores exist as speciality formats. Converting all seven eleven stores to Amazon Go will be a big change and if it increases the size of the assets and infrastructure for Amazon Go by adding grocery stores still it will not be able to match the customer service and customer base of its competitors like Walmart. Amazon Go will have to invest substantially in terms of technology change in the seven eleven stores and it will create disruption in the existing business. It may not result in the expected profits or market leadership position as per the goal of this strategy even if Amazon operates on lesser margins.

If Amazon Go plans for this joint venture it can support the seven eleven stores with technology and introducing clerk less services on selective basis to provide choices to customers and use it from customer focus than profitability and cost savings if it needs to compete and grow in grocery business. This will help Amazon to continue focusing on its strategic strengths , customer retention and at the same time building its base in newer areas with using its technology and experience.