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Jason Bloomberg

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Amazon’s Whole Foods Strategy: It’s Not What You Think

Ever since Amazon.com announced it was acquiring Whole Foods earlier this week, the pundits have been jumping on the story, each one theorizing about Amazon’s motivations for the acquisition.

Amazon’s problem with perishables: $75 and up for a gallon of milk, with an 18-day delivery window.

Amazon’s problem with perishables: $75 and up for a gallon of milk, with an 18-day delivery window.

Some guesses make more sense, in particular, that Amazon wants to expand its grocery business. Others might leave you scratching your head, like the theory that Amazon wants to be more like Walmart.

Upon closer analysis, however, even the more popular theories have weaknesses, leaving us to wonder whether Amazon is essentially taking a $13 billion crap shoot – or making the biggest blunder of CEO Jeff Bezos’ career.

Peeling Back the Layers of the Whole Foods Onion

Our starting point: the official Amazon party line. “Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” crows Bezos in the official Amazon press release. “Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

Bezos is clearly playing his cards close to the vest here, as he is saying nothing that would indicate why a global ecommerce leader would be interested in a supermarket chain. In fact, this statement appears so baldly disingenuous that one wonders whether a committee of PR wonks actually wrote it, rather than Bezos himself.

Nevertheless, the most likely explanation for the acquisition is that Amazon wishes to expand its grocery business – not simply by adding bricks-and-mortar supermarkets, but by expanding its core ecommerce efforts in this category.

The question then is: why Whole Foods, rather than a more mainstream supermarket chain like Kroger or Albertson’s? After all, Whole Foods’ business model is fundamentally broken in many ways: its ‘whole paycheck’ prices are too high, its selection is poor, and many of its products are based on quackery, targeting a gullible customer base who believes, for example, homeopathy is something other than pure nonsense.

Read the entire article at https://www.forbes.com/sites/jasonbloomberg/2017/06/23/amazons-whole-foods-strategy-its-not-what-you-think/.

Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. Image credit: Jason Bloomberg, from Amazon.com.

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Jason Bloomberg is the leading expert on architecting agility for the enterprise. As president of Intellyx, Mr. Bloomberg brings his years of thought leadership in the areas of Cloud Computing, Enterprise Architecture, and Service-Oriented Architecture to a global clientele of business executives, architects, software vendors, and Cloud service providers looking to achieve technology-enabled business agility across their organizations and for their customers. His latest book, The Agile Architecture Revolution (John Wiley & Sons, 2013), sets the stage for Mr. Bloomberg’s groundbreaking Agile Architecture vision.

Mr. Bloomberg is perhaps best known for his twelve years at ZapThink, where he created and delivered the Licensed ZapThink Architect (LZA) SOA course and associated credential, certifying over 1,700 professionals worldwide. He is one of the original Managing Partners of ZapThink LLC, the leading SOA advisory and analysis firm, which was acquired by Dovel Technologies in 2011. He now runs the successor to the LZA program, the Bloomberg Agile Architecture Course, around the world.

Mr. Bloomberg is a frequent conference speaker and prolific writer. He has published over 500 articles, spoken at over 300 conferences, Webinars, and other events, and has been quoted in the press over 1,400 times as the leading expert on agile approaches to architecture in the enterprise.

Mr. Bloomberg’s previous book, Service Orient or Be Doomed! How Service Orientation Will Change Your Business (John Wiley & Sons, 2006, coauthored with Ron Schmelzer), is recognized as the leading business book on Service Orientation. He also co-authored the books XML and Web Services Unleashed (SAMS Publishing, 2002), and Web Page Scripting Techniques (Hayden Books, 1996).

Prior to ZapThink, Mr. Bloomberg built a diverse background in eBusiness technology management and industry analysis, including serving as a senior analyst in IDC’s eBusiness Advisory group, as well as holding eBusiness management positions at USWeb/CKS (later marchFIRST) and WaveBend Solutions (now Hitachi Consulting).