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3 Entrepreneurial Lessons From the Amazon/Whole Foods Mega-Merger The entrepreneurial community should be watching this deal with bated breath for the revolutionary retail repercussions sure to come.

By Per Bylund Edited by Jessica Thomas

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Opinions expressed by Entrepreneur contributors are their own.

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This article is included in Entrepreneur Voices on Growth Hacking, a new book containing insights from more than 20 contributors, entrepreneurs, and thought leaders.

Whether or not you're bullish about Amazon's recent acquisition of Whole Foods Market, you and I can agree that the $13.7 billion price tag was colossal. It wasn't Amazon's first step into the food arena, but it was certainly one of the company's biggest moves, to date. And the staggering purchase price wasn't the only fascinating aspect of the deal.

Related: The Winners and Losers in Amazon's Whole Foods Deal

Amazon will acquire the upscale grocery chain of more than 460 stores across the United States, Canada and the U.K. In fiscal year 2016, Whole Foods reported about $16 billion in sales.

Unlike most businesses -- particularly large corporations -- Amazon refuses to adhere to an industry-specific paradigm. In looking to acquire new components in various markets, Amazon is defying common expectations that many companies treat as hard and fast rules.

It's easy to compare two grocery stores or chains and examine that competition within the confines of their industry. In reality, though, all sellers and producers go head to head to secure consumer spending. The intense competition that results takes place across market lines and is no longer industry-specific -- if it ever was.

And Amazon and Whole Foods? That blockbuster deal demonstrates the true essence of innovation and competition as it pertains to entrepreneurship.

A match made in heaven

Amazon's purchase of Whole Foods Market is a fascinating move, though it might not change either company the way some suspect.

Many people have a somewhat narrow view of innovation. Society thinks innovative ideas must involve either a revolutionary concept or novel solution to a longstanding problem. Amazon's purchase of Whole Foods is not a new way of doing anything, but it will allow the two companies to combine their capabilities in unique ways.

In short, I don't expect operations at Whole Foods Market to change much. The food chain won't suddenly become the low-price place to stock up on organic groceries. So, once the deal closes later this year, Whole Foods Market will continue to operate under its own name and remain a separate unit within Amazon.

As evidence of that prediction, look to the press release in which Amazon founder and CEO Jeff Bezos praised the service Whole Foods has been delivering to its loyal customers for nearly four decades. "They're doing an amazing job," Bezos said. "We want that to continue."

That said, Amazon will undoubtedly pair its unique capabilities -- wholesale-level organization and consumer-level delivery logistics -- with the grocer's strengths: local presence, reputation for high-quality foods and existing supply contracts.

Amazon will add its own stregnths: the ability to streamline farm-to-store logistics while adding a layer of service between Whole Foods' stores and consumers via quick, cost-efficient delivery. Once you consider Amazon's numerous experiments and ventures, the possibilities seem limitless.

For example, Amazon has put a lot of effort into Amazon Prime Air, a delivery system that uses drones to fly orders to customers. Imagine a scenario in which Whole Foods and Amazon fly farm-fresh eggs and produce directly to your breakfast table. This scenario would have seemed unimaginable just a few weeks ago, but the marriage of Amazon and Whole Foods creates myriad fascinating opportunities.

Related: Amazon Completes Its First Drone-Powered Delivery

Lessons from a mega-merger

Considering the potential for innovation, the entrepreneurial community should be watching Amazon and Whole Foods with bated breath to see the revolutionary retail repercussions sure to come. While the mega-merger won't go through until later this year, entrepreneurs can learn three major lessons from the deal:

1. Accept uncertainty as a prerequisite. Seventy-five percent of respondents in Deloitte's M&A Trends 2016 survey said they believed that merger and acquisition activity would increase in 2017. The same survey found that 64 percent of respondents also thought that the sizes of these deals would increase.

The problem with bold business moves is that the future is never certain. Whether entrepreneurs create something new through M&A or by starting a company from scratch, they deal with a tremendous amount of uncertainty. They must anticipate the future conditions of a market and position themselves and their businesses accordingly.

When ventures do pan out, the entrepreneurs behind them can use those profits to innovate and provide value to consumers. But nothing here is a guaranteed "sure thing."

Even someone who enjoyed tremendous success in the past is capable of falling flat on his face the next time around. We're talking here about Jeff Bezos, of course: He's achieved incredible things with Amazon -- taking on brick-and-mortar retail juggernauts such as Walmart and Target. But his past success is irrelevant as it relates to the Whole Foods merger. We still don't know what Bezos has in mind with his latest gambit, and there's no guarantee it will be a success.

2. Even perfect deals aren't obstacle-proof. With nearly all mergers and acquisitions, compatibility and potential synergies often look great on paper. Instead of simply adding one capability to another, businesses must merge corporate cultures, unite and streamline information channels, reset the boundaries of decision-making processes and change how people think about the business and their understanding of what "needs to be done."

That's all well and good. But many M&A deals fail because the cultural and operative obstacles are simply too difficult to overcome. Business leaders are increasingly aware of the essential role culture plays in a company's success. In fact, 87 percent of respondents in Deloitte's Human Capital Trends report recognized the importance of organizational culture. When entrepreneurs take the tremendous step of merging with another business, they should always factor in the costs associated with achieving various synergies.

3. Steel yourself for regulatory headaches. Entrepreneurs will always have to deal with government regulations and restrictions -- and not always for good reason. A survey by Herbert Smith Freehills and Mergermarket found that 71 percent of executives polled blamed competition regulators for their failed deals.

If governments continue to introduce regulations that force internet-based retailers to play by the same rules as brick-and-mortar stores, it's uncertain whether the union of Amazon and Whole Foods Market will be profitable.

I suspect we might see more federal and state regulations that seek to limit interstate trade. For instance, many states already have rather outrageous regulations regarding alcohol sales. And, then, quite a few states use a three-tier system that requires producers, wholesalers and retailers to be different actors (and sometimes the last two must be based in the state). Similar restrictions could hamstring the Amazon/Whole Foods partnership before it gets traction.

Considering that Whole Foods has hundreds of stores in several countries, Amazon will also have to maneuver its way through international trade regulations, international supply chains and so on. The answers aren't yet apparent -- in many ways, even the questions are still unknown -- and the learning process will likely be expensive. Entrepreneurs considering a move into uncharted territory should keep an eye on Amazon's progress to learn from the company's successes and failures.

Any significant investment carries a decent amount of risk. Time will tell whether Amazon's decision to acquire Whole Foods was a brilliant move or a ridiculous blunder. Either way, entrepreneurs should watch this merger as it unfolds. If all ends well, they'll enjoy the consumer perks like anyone else: They'll be able to get fresh, organic snacks delivered straight to their doorsteps.

Related: How to Bridge Company Cultures After a Merger

If the merger goes poorly, however, at least those entrepreneur/consumers will learn some valuable lessons along the way.

Per Bylund

Associate Professor of Entrepreneurship

Per Bylund, PhD, is associate professor of entrepreneurship and Johnny D Pope Chair and Records-Johnston professor in the School of Entrepreneurship at Oklahoma State University. His areas of research are entrepreneurship, management and economic organization. He is author and editor of six books.

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