See atachment Essay Example | Topics and Well Written Essays - 750 words

See atachment - Essay Example btaining additional market share of the competitor that totals 9.1 per cent, Albertsons increases the number of stores to 2400 letting each business unit operate on the regular basis without wrapping up their performance. Buying the assets of its main competitor, Albertsons at once becomes one of the biggest employers within the grocery industry. Though a lot of analysts consider the companys action as an essential step for suppressing numerous competitors due to the significance of scale benefits, some specialists remain skeptical regarding positive consequences of such deal on consumers. It is forecasted that company merger will lead to the narrowed product choice in the market and increased prices on the groceries because these are the major consequences of reduced competition. In contrast to this statement, CEO of Albertsons, Robert G. Miller, asserts that due to the changes of consumer behavior and preferences, the company is forced to adjust in order to save its market position (Hsu par. 14). The combination of businesses will considerably reduce production costs and enhance the quality of products due to raised effectiveness of mutual distribution system. Taking into account that lower costs will result in higher profits, there are no grounds for the company to raise prices, which may lead to the loss of loyal and pot ential customers. In addition, it is less likely that the company will increase prices also because of the great number of existed alternatives in the market. In this respect, according to the prognosis of analysts, consumers are not supposed to face any negative consequences of the impending acquisition. It is fair to state that the deal between Albertsons and Safeway will become a great incentive for other companies to follow their example since benefits of the purchase excel its disadvantages. First of all, Albertsons will upgrade its stores providing fresh and new image to the entire company. Every time when the market environment is