On June 16, 2017, Seattle base e-commerce giant Amazon.com, Inc., one of the leading natural and organic food supermarket chains in the United States in an all cash transaction valued at approximately $13.7 billion. According to analyst, the deal touted to be Amazon's biggest acquisition to date, marked a turning point in the company's strategic efforts to crack the $800 billion U.S. grocery market. The deal also marked Amazon's big entry into the brick and mortar retail space. The shares of big box retailers such Walmart stores Inc. Target Corporation, Costco Wholesale Corporation and the Kroger Co. tanked with investor worrying about the far-reaching implication.

"By purchasing Whole Foods. Amazon is se to disrupt the $800 billion grocery market in the same way it upended the publishing and consumer electronics industries. Now Amazon is right where it wants to be everywhere. It has surpassed its original goal of being the everything stores and is fast on its way to becoming the everything store".

Said Sean Kervin practice director, customer experience, at clear Peak, a management & analytics consulting firm.

Jeff Bezos, CEO of Amazon, realized that the commerce giant could not win the grocery game with its pure online format. He saw brick-and mortar stores playing a key role and hence acquired Whole Foods. In addition, by early 2018 Amazon also rolled out a high-tech convenience store format sans cashier or check-out lines called Amazon Go and AmazonFresh Stores Pickup Services. According to some analyst, while grocery was a huge opportunity for Amazon operating in this new business might pose some new challenges including intense competition, razor thin margins, delivery of perishables, and bringing the convenience of digital shopping to the grocery -business.

Some analyst felt that Bezos was taking a risk by making a major investment in an unsteady operation like Whole Foods, which could potentially be a drag on the e -tailer. They wondered-Can Amazon eventually change the way customers buy groceries? Can it manage brick and mortar well and redefine convivences? can Amazon disrupt the grocery industry and the broader retail sector in a major way?

Guiding questions for Amazon

1. 1. What is competition like in the grocery retail industry? Which of the five competitive forces is strongest? Which is or are weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants?
2. 2. What does your strategic group map of the U.S. grocery retail industry look like? Is Whole Foods Market suitably positioned? Why or why or why not?
3. 3. What do you see as the key drivers of change in the U.S. grocery retail industry? Based on these drivers, trace Amazon, Inc.'s evolution in the U.S. retail grocery industry. Is the Amazon Inc. / Whole Foods Market combination potentially disruptive? Why or why not?
4. 4. What key factors may determine the success of the Amazon, Inc. combination with Whole Foods Market?
5. 5. What recommendations would you make to Jeff Bezos, CEO and founder of Amazon, Inc. to improve Whole Foods Markets' competitiveness in the market while mitigating any current and future risks?