• Enhancing differentiated food offers:I believe that Sainsburys’ strategic decision of merging with Asda will be a success, as they are both strong and prosperous retailers who can merge together to create more jobs and build competition within the market. This decision will benefit both companies, as it will be easier for the companies to invest in new technology to offer better service to customers. Also, the retailers merged together will be good competitors against brands like amazon who are also focusing on selling the same products as Sainsburys and Asda.
This is evidenced by many external sources such as news articles and competitor research. Another benefit of this merger would be that two rival retailers are merging together, which means that there will be less or no competition between both company’s and will hold a market share of 31.4%. On the other hand, the disadvantages of this merger would be that it will put pressure onto producers/suppliers, this is because they will be expected to provide goods and services more often. This merger will have a huge effect on smaller retailers such as Co-Op, as Asda and Sainsburys will be leading in the market by 31.4%, which means that more than a quarter of the market will be led by the merger of these two companies.
This could lead to the fall of smaller markets in the market, as bigger retailers such as Asda-Sainsburys and Tesco will have more shares in the market.