Kudler Fine Foods Explores Merger with Wegmans

Kudler Fine Foods Explores Merger with Wegmans

The last option Kudler Fine Foods is exploring the option to merge with Wegmans. According to Wegmans (2012), "Wegmans is a regional supermarket chain and one of the largest private companies in the United States (Facts and Figures)." Wegmans was founded in 1916 and currently has 79 stores on the east coast and annual sales of $6.2 billion (Wegmans, 2012). The bottom line is Kudler Fine Foods wants to increase revenue and a merger with Wegmans will accomplish this goal.

The strengths of a merger are reduced cost, market penetration, and the ability to share skills and knowledge (Schamotta, 2012). Costs are reduced after a merger for multiple reasons. The main reason is layoffs. Layoffs occur because the company finds there are redundant positions. For an example, the combined company needs only one chief finance officer versus two. In the planning stages of a merger, employee positions are analyzed to determine which ones can be cut in order to save the company money. Another advantage is market penetration. Through a merger the companies have a access to the other's customer base. This equals greater profits. A vital benefit to a merger is the capability to share skills and knowledge. For Kathy Kudler (founder and President of Kulder Fine Foods) this aspect of the merger is very appealing. Kathy's operations are successful, but a potential merger with Wegmans could take their company to the next level because they are a much more experienced company with the same foundations and value system as Kudler Fine Foods.

There are disadvantages to mergers. These are cultural clashes, losing customers, and the loss of experienced workers. The most difficult obstacle to deal with is cultural clashes. If the management of the companies are not in agreement with future of the company, the fallout will cause a major disruption in the company