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When Farmingdale State College students are asked about Aramark, they simply associate it with the food that is served on campus. Little do they know that Aramark has a whole history and that there are many facets to this company. Not only does Aramark Corporation cater to different colleges around the country, they also have uniform services among other things.
Aramark was born because of two business owners who merged their two companies, Davre Davidson and Bill Fishman. These two men were the owners of two peanut vending businesses. In 1959, after merging, they incorporated their new company with the name Automatic Retailers of America, Inc. (ARA). In the first year of operation, they company earned $24 million. For the next 10 years, ARA grew at a rapid pace, obtaining 150 smaller vending companies ("History of Aramark Corporation – FundingUniverse").
The largest company ARA bought was Slater Company in 1961 for $15 million. At the time, Slater Company was the largest food service business in the United States. By purchasing Slater Company, ARA became a diversified food service company. This purchase expanded them into new markets; they expanded into institutional markets such as colleges and universities ("History of Aramark Corporation – FundingUniverse").
Even though they were quite large, ARA still wanted to expand further. According to FundingUniverse, “the company established a division to run resorts, sports parks, and amusement parks; acquired Air La Carte Inc., a private company that provided in-flight meals for more than 20 domestic and international airlines; and ventured into periodicals distribution, purchasing 39 local distributorships over a period of about four years” ("History of Aramark Corpor...
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...e of the U.S. and Canada into more countries.
THREATS
Aramark’s threats may include other food service companies who are expanding into the same markets.
Works Cited
Aramark Announces Pricing of Initial Public Offering. (2013, Dec 11). PR Newswire. Retrieved from http://search.proquest.com/docview/1466604091?accountid=8066
Aramark's Customer Loyalty Program. (2005). Food Management, 40(10), 23. Retrieved from http://eds.b.ebscohost.com/ehost/detail?sid=68dc6654-188c-4026-b525-90d857fe9fc0%40sessionmgr110&vid=1&hid=110&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&AN=18348184
History of Aramark Corporation – FundingUniverse. (n.d.). Retrieved from http://www.fundinguniverse.com/company-histories/aramark-corporation-history/
LexisNexis® Academic & Library Solutions. (n.d.). Retrieved from http://www.lexisnexis.com/hottopics/lnacademic/?verb=sf&sfi=AC02NBCmpDosSrch
These three companies have all but either acquired or eliminated their smaller competitors. The giants compete for the leading fast food chain’s contracts, in turn only benefitting the restaurants and increasing their profits (Schlosser 116). The potato industry has become an, “oligopsony- a market in which a small number of buyers exerts power over a large number of sellers,” (Schlosser 117). The potato farmers of Idaho face as Schlosser recounts, “pressure to either get bigger- or get out if the business,” (Schlosser 117). “Over the past twenty-five years, Idaho has lost about half of its potato farmers.
Such factors may include threat of new entrants, power of suppliers, power of buyers, product substitution, and the intensity of rivalry among competitors (Hitt, Ireland, & Hoskisson, 2013). Since Chipotle was opened in 1990, they have already become a well-established company within the industry. In order for Chipotle to continue having a competitive edge in the market, they must heavily compete with companies or restaurants such as Qdoba that offer a wider variety of menu options for lower prices. Chipotle directly works with suppliers, usually in local areas, to permit more competitive prices to buy their products. Since Chipotle focuses so greatly on product quality, the supplier’s power plays an enormous role in Chipotle’s ability to obtain their raw
Kmart began as a five and dime store in Detroit founded by Sebastian Spering Kresge and John McCrory. The partnership dissolved and they took over the separate stores, Kresge mainly sold costume jewelry, houseware, and personal care products, always for thrifty prices. The company was incorporated in 1912 with 85 stores producing $10.3 million in annual
When brothers Sidney and Stanley Goldstein partnered with Ralph Hoagland in Lowell Massachusetts in 1963, they were unaware of the nationwide impact that CVS would have on the retail drug industry today. Just six years after establishment, Goldstein and Hoagland sold to Melville Corporation and began acquiring companies including Revco, Prescription Health Services, People’s Drug and Eckerd Health Services. This led to an increase in sales reaching one billion dollars in 1985 as well set the bar for all pharmaceutical companies within the United States.
They bought Showell Farms, Inc. in January 1995 which should boost revenue to $2 billion and the number of associates to about 20,000
American Airlines and US Airways are in the aviation industry. Both companies provide air transportation services for passengers and freight. Together they have formed American Airlines Group, Inc., the world’s largest airline, as measured by revenue passenger miles (RPMs) and available seat miles (ASMs). In 2012 the U.S. airline industry was worth approximately $195billion in operating revenue, up from $154billion in 2009, including an operating fleet of 3,451 aircraft.1
From the given document it can be inferred that Albertsons has a good financial backing. It is mentioned that the company has invested half a billion dollars for technological advancements and also they are into the drug retail market which is more profitable over groceries.
Operating an air - express transportation industry requires large capital investments, and therefore it can impede the entry of new firms into the industry. For one, Airborne has already its own set of aircrafts and even operate its own airport, and it would be hard for a new firm to compete with this.
As aviation matured, airlines, aircraft manufacturers and airport operators merged into giant corporations. When cries of "monopoly" arose, the conglomerates dismantled.
American Eagle Outfitters is corporation. There are multiple owners that specifically own the company through purchase of stock.American Eagle Outfitters, Inc. (AEO Inc.), incorporated on January 26, 1972, is a specialty retailer that operates over 1,000 retail stores and online at ae.com and aerie.com in the United States and internationally.
...permarkets and grocery stores. The latter revenue stream could be decreased with more people eating out. The consolidation of supermarkets and grocery stores will lead to these stores having an increased bargaining power and more demanding needs. Azalea may not be able to meet these needs without further growth. In addition to the consolidation of supermarkets and grocery stores consolidation among competitors could also have a negative impact on growth opportunities. As companies like Nestle and Kraft Foods have acquired smaller companies they have created a more concentrated market of sellers. The increased concentration of both buyers and sellers in the industry will require economies of scale to be successful. Azalea will have difficulty expanding enough in its current setting to realize the economies of scale needed for continued success in the industry.
The Silverman family first founded American Eagle Outfitters in 1977. They operated specialty clothing stores under the name Retail Ventures. In 1980 the Silverman’s encountered financial troubles when the Schottenstein family bought out 50% of the Retail Ventures. In 1991 the Schottenstein family bought the rest of Retail Ventures and opened 153 American Eagle Outfitters. By late 2000 the company had introduced 46 new stores in Canada. American Eagle had approximately $2 million in annual sales in 2003 and now operates over 800 stores in the United States and Canada (http://www.hoovers.com/american-eagle-outfitters/--ID__17231--/free-co-factsheet.xhtml).
New entrants to an industry, with a desire to gain market share, will put pressure on prices, costs and capital needed to compete. It can affect the profit potential.
· The threat of new entrants into an industry or a market served by a specific company.
Another risk involved in this industry is its huge number of competitors. It is a well-known fact that the food industry is one of the most saturated markets that has ever existed, mainly because it has a huge market population and it is a need for the society. The industry tends to get very competitive because of its sheer number of population of consumers, as well as its producers. Evidently it is a very lucrative industry to step in to, that is why a lot of people tend to penetrate the market in an attempt to make a huge profit from