Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine. A long-time Harris Teeter executive, Mr. Harris is a former chairman of the National Frozen & Refrigerated Foods Association and a member of the Refrigerated Foods Hall of Fame.
Based on what I've seen over the years in the supermarket industry, consolidation can be good and bad.
On the plus side, you get more buying power. Years ago, before Harris Teeter bought Food World, we were buying half trucks. Afterward, we were buying full truckloads, so we got better cost and more leverage with the manufacturer.
On the minus side, lots can go wrong. This doesn't have to happen, but it usually does. I wish both sides would go in with a better handle on what to expect and how to resolve issues. Here's my checklist of issues.
1. Make decisions, and move on. Being careful is one thing; being paralyzed is another. All too often, people are trying to score points at meetings or are afraid of change, so nothing gets done. This is an important time, and your competitors are watching you. Keep moving.
2. Have a plan for marrying up the IT systems of the two companies. That's a struggle that pretty much every company goes through during a merger, and fumbles here are common. My advice to anybody going through this is simple: Don't rush things to meet an arbitrary timeline. Communicate, and get input from everybody who's involved. For example, if you miscommunicate any of the code numbers of the products you order, you're going to have out-of-stocks and that's trouble.
3. Don't be in a rush to change the name on your storefronts or your private label packaging. If the company being acquired has been doing well, consider just leaving it alone without imposing a lot of changes. Don't tick off the shoppers by deleting some of their favorite items, or forcing in a bunch of new items from a different region. Survey your shoppers about their concerns. If you do decide to change over your store brand, give your suppliers plenty of notice so they don't print any more labels.
4. Meetings are better than memos when you are going through a merger. Don't just keep everything at the top management level. Middle managers should also get input from their direct reports. Memos are open to interpretation and the rumor mill and they can get passed around too easily, especially if they are e-mailed.
5. Do your homework if you want to keep your job. You may be re-interviewed for your job, so be prepared. Know your business and the numbers behind it. Have a specific plan of how you are going to increase the business of the two merged companies. Whatever it is, think it all through and be ready to talk about it.
Which of the following issues is the most common mistake made by companies in the process of merging?