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Whole Food Marketexternal Analysis Question3 4

In: Business and Management

Submitted By tranghuong
Words 1101
Pages 5
Strategic management
BIG CASE DISCUSSION 4
(Question 3&4 of the external analysis)

I. What factors are driving industry changes, and what impacts will these changes have on competitive intensity and industry profitability? * Driving forces
1) Increasing globalization: * New markets in Canada and UK: WF has acquired Wild Oats Market in the US and Canada.
- New competitors from neighbor countries like Fresh & Easy from British supermarket giant Tesco. * Products from other countries, for example: Lebanese fig jam, preserved lemons from Morocco, Indian curies, Thai rice, stuffed grape leaves from Greece, and goulash from Hungary.

2) Changes in the long-term industry growth rate:
- Natural food generated $22.3 billion in sales in US in 2008, up 10% from 2007, and up 37% from 2004.
- UPC-coded organic foods accounted for 49 billion in sale, 16% higher than the previous year, and up 132% since 2004.
- Global sales of organic products were estimated to be $52 billion in 2008 and to have grown at the compound rate of 13% since 2004.

3) Changing societal concerns, attitudes, and lifestyles
- People are more concern about health and food safety -> Consumer demand for organic products growing at double-digit rates – much larger than that of the traditional grocery products (2-3%)
- Demand for value-priced: The United States now spends more than $1 billion a year to import organic food, according to the USDA, and the ratio of imported to exported products is now about 8-to-1.

4) Regulatory influences and government policy changes
- US Department of Agriculture’s (USDA) officially established labeling standards for organic products, four categories of food with organic ingredients, with varying levels of organic purity (100% organic products, organic products, made with organic ingredients & all other products with organic

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