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Evergreen Natural Markets

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Hannah Wagner

on 19 April 2015

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Transcript of Evergreen Natural Markets

Evergreen Natural Markets was the first independent, multi-site grocer, started by Donald Slater in 1966. The company has a value proposition of offering the freshest organic foods to health conscious consumers.
Evergreen's Success
Success on Corporate Level
- growth strategy by acquiring successful natural grocery stores run by managers with proven success.
- In 2011, achieved total annual revenue of $175 million and net income of $4.3 million.

How Acquisitions Improve Store Performance
Introduce more effective communication measures between Evergreen and Arugula.
Reinforce the Evergreen Way to newly acquired Arugula employees
Rectify the financial status of Arugula before seriously investing. If it is easily rectified, go all in. If not, find different acquisitions. This will cut costs and potential loss.
Modify Arugula management style, focus on: improving human resources, maintaining local setting, and caring about employee and customer welfare.
Increase incentives and appraisals to establish brand loyalty and make for better learning by new employees.
Mix already Evergreen employees into the Las Vegas stores to encourage diversity and provide more mentorship.
Create informal teams at the new stores with blended Arugula and Evergreen employees.

Additional Steps to Integrate
Buss, D. (2010). Anatomy of an Acquisition: Why bigger companies are targeting smaller company acquisitions. Chief Executive, 249, 50-55.

Jones, G. R., & George, J. M. (2015).
Essentials of Contemporary Management.
New York, NY: McGraw-Hill Education.

Kanter, R., & Myers, Paul. (2012). Evergreen Natural Markets 2012. Boston: Harvard Business Publishing.
Works Cited
How well does Arugula align with Evergreen Natural Markets?
Evergreen Natural Markets
by Hannah Wagner
The company also has a competitive advantage by integrating and buying local grocers throughout the Rocky Mountain West. However, the key to their success is how they treat employees and thier company loyalty.
In 2012, Kathleen Norton began integrating Arugula Grocers, a seven store natural food chain based in Las Vegas. Since Evergreen Natural Markets relies on acquisitions to grow and earn greater revenue, it is imperative each grocer added is successful and run by exceptional managers.
Value Proposition
Customer Service and Quality Products
- Gourmet, natural, and organic products
- "We talk to our customers, learn their needs, and help them choose the best products for them and their families."

Marketing and Brand
- Well known name across the Rocky Mountain West
- Differentiation through quality and service
- Recognized brand for customer service, quality, and quirky, original hand painted sign

The Evergreen Way
- Declaration of company values and mission statement.
- States that the company values the well-being of customers and employees, knowledge is the key to better choices, and keeping things local.
- Helps create a strong brand name with a clear mission, hence, creating brand loyalty.

Financial Success
- Instead of using a plough back method of financing, Evergreen dissolves competition through acquisitions and increases resources and their financial base

The Proof of Successful Integration

"Within two years following acquisition, stores, on average, increased their sales per square feet by 20% and increased margins by a full percent point."

Overnight, by buying Arugula, Evergreen Natural Markets increased revenue and assets by 35%.

Testimonial: "Without such support, my team never could have achieved the cost ratios and net margins we're seeing today."
SWOT Analysis
-two distribution centers
-using local knowledge
-large comprehensive information system
-care of employees
-employee loyalty and brand loyal customers
-low turnover
-Strong brand experience
-limited growth rate
-risk of acquisitions

-rising health conscious society
-expanding out of Rocky Mountain West

-more competitors enter the market
-variation of changing economy, a possible recession would decrease demand for luxury food items.
1. Autonomy
General managers still control: methods of customer services, choosing successful local products based on local demand.
Trusts store managers because of the integrated business in the local market and knowledge about that market.
Most large corporate chains do not allow such autonomy and rather, force standardized rules and regulations.
3. Information System
Evergreen Natural Market controls and processes all data for every grocer.
Information and two distribution centers provides data to better predict successful market specific prices.
Allows for better control of inventory, reduces shrinkage, and helps better set prices.
2. Financing
Evergreen controls all financing
Allows stores to set and meet performance targets.
Allows stores to focus on more direct issues involving customer service, etc.
Bonuses are 65% of net income
Bonuses increase employee loyalty and encourage better customer service practices.
4. Marketing Value
Evergreen Natural Markets has a strong marketing value
Due to brand awareness, there is an increased customer incentive to shop there.
Evergreen provides small businesses management sophistication .
Arugula consists of a large chain of stores with an ingrained method of top-down management. Arugula employees follow strict guidelines and policies without any real originality or control of the business. They also have been promoted within, therefore, change and learning will be hard because of the previous long term ingrained methods.
Arugula has lost money over the past three years and management has become disinterested in the business.
Norton faces disapproval from Evergreen employees, so it is imperative that Arugula becomes a success.
Integration will provide growth and geographic expansion of Evergreen. This will help them and keep competition from killing them.
It will also be good for Arugula, they will gain financial, management, and operational support and control.
Integrating will allow Evergreen to reduce prices and engage in aggressive marketing.
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