In the current days centered around consumerism, there isn’t much surprise when large companies buy other companies. In the past, numerous corporations have combined with other companies, creating a “super-force” in the market. Recently, the world was shocked into disarray when Gene Munster, of Loup Ventures predicted that Amazon would buy Target in 2018.
Further investigations from other experts have brought debate over the possibility of this occurrence. Many agree with Munster’s predictions, stating that it is a reasonable idea for Amazon as a company. Amazon, as an online based company, has their best interests in expanding to real stores for more business. Additionally, in the past, Amazon has demonstrated this idea by buying Whole Foods and using it to bring in revenue, and based on demographics, there is a real benefit for Amazon to purchase Target. The only store that offers competition to Amazon is Walmart, and Munster argues that the combination of Target and Amazon would be unstoppable.
While this business venture seems to make sense, there are investigators who disagree with the possibility of this. Many argue that while the deals made with Whole Foods did benefit Amazon in expanding their food market, Target caters to an entirely different market. Target offers consumers many different types of products, and they lack a specific brand attached to their company. Many argue that Amazon already excels in most of the businesses offered by Target, and therefore a business deal would be unnecessary.
Furthermore, the issues that follow the buying of Target might outweigh the positives. The returning of products and inventory might be made difficult with the combination of the two, as consumers may return a product which may not be sold by the specific store, thus leaving stores with random products that they have no way of selling. Additionally the management of the Target stores may be difficult, as Amazon might be stuck with stores that are not very profitable but must still be managed.
It is unclear whether Amazon plans to buy Target, but many critics argue that the combination of the two stores only reinforces a monopoly based market. Monopolies are bad for consumers as they lack choices of products from different companies. Many consumers are surprised by the small amount of corporations controlling the market, as only a small amount of corporations own the media and other services offered everyday. While this large corporation may seem bad, supporters of the merger state that it might actually cut prices and make online shopping much easier, thus actually helping consumers.
The future holds the answer to whether Amazon will purchase Target, but there are definitely arguments supporting the joining of the two companies that might help the consumers and retailers. Investigators look to the future to observe the biggest potential business deal of the new year.