...Competitive strategy at Whole Foods Market By Amanda Roberson, Amy Zelezen, Ankush Brahmavar, Boris Pilipenko, Kinjal Gandhi and Matt Werner Cincinnati resident Roberta Mand is spoiled for choice every time she steps out to buy groceries. Depending on whether she want to buy steaks, sushi, staples or macadamia-encrusted tuna, she heads to Costco, Wal-Mart, Kroger, Whole Foods or the local farmer’s market, all of which are nearby. Roberta’s array of choices illustrates the ever-evolving dynamics of the grocery industry. In this extremely competitive environment, all major players must continuously strategize to maintain a strong presence. A look at Whole Foods Market reveals how this increased competition can leave a company at a strategic crossroads. Since its beginnings in 1980, Whole Foods has been a leader in supplying organic and natural foods, and for years enjoyed its role as the only store catering to this niche market. However, since then other major players have identified this growing segment and now also carry lines of organic and natural foods. Shoppers like Mand can now buy most specialty items almost anywhere. Competitors, such as Safeway and Kroger, bring with them vast experience in supply chain and vendor development, which allows them to optimize more effectively, use economies of scale, and reduce costs. Despite a public perception that Whole Foods competes against the Sunflower Markets and Trader Joe’s of the world, neither the company itself nor analysts...
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...general environment segments are most relevant to Whole Foods Market? What are the main opportunities and threats affecting the company? The three segments of general environment that are most relevant to Whole Foods Market are demographic, sociocultural and the economic segment. Demographic Segment Whole Foods Market is concern with the demographic segment because it targets its customers based on population size and income distribution. It does extensive research on demographics when choosing stores location and customer base. According to the case, Whole Foods enters markets where the demographic is 40 percent or more of the residents are educated with a college degree, as they would be more conscious and supportive of nutritional issues. They also locate stores in top statistical metropolitan area, where majority of the higher income group resides because only the more affluent customers can afford to pay their steeper prices on a regular basis or are willing to pay a premium for the higher quality of organic and natural food. Sociocultural Segment The socioculturalsegment is relevant to Whole Foods because of the importance of the society’s attitude and cultural values. Whole Foods is well known for its organic products and the society’s perception that organic food is beneficial to health is important for its sales growth. As the number of health-conscious residents increase, the demand for Whole Foods’ products will rise because people are concern with their...
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...Long-Term Objectives Company Name: Whole Foods Market Topic of the Week: Internal Analysis and Long-Term Objectives Synopsis of the Situation Whole Foods Market is the world’s leading company in natural and organic food sales. Their growth and success is due to being highly selective about what they sell, they are also dedicated to high quality standards and their core values. They are also the first American grocer to be a nationally certified organic and ranked 284th in Fortune 500 (Pearce & Robinson, 2013). Whole Foods is struggling to maintain its edge over today’s competition, many of their competitors can purchase more product and sell it for less. Due to the rising awareness of healthier eating and farmers producing more organic and natural products Whole Foods finds itself in a precarious position. The position would be the fierce competition from big box retailers such as Wal*Mart, target, Costco, and the standard grocery stores. These competitors have the ability to order larger quantities at a lower cost giving them the ability to offer the natural or organic products at a lower price (Pearce & Robinson, 2013). Alternative Solutions 1. Increase brand awareness, image, and loyalty through advertising and public relations. The advantage of this is to promote the Whole Foods brand, and to increase their overall general sales by bringing in new customers. 2. Open smaller stores with just their instore private label known as 365, this being their version of the store...
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...Whole Foods Market, Inc. (Whole Foods Market or 'the company') is a natural and organic foods supermarket chain that operates through several wholly owned subsidiaries. The company's supermarkets are located in the US, Canada and the UK. It is headquartered in Austin, Texas and employs 64,200 people, of which 13,300 are part-time employees and 2,700 are temporary employees. The company recorded revenues of $10,107.8 million during the financial year ended September 2011 (FY2011), an increase of 12.2% over FY2010. The operating profit of the company was $547.6 million in FY2011, an increase of 25% over FY2010. The net profit was $342.6 million in FY2011, an increase of 42.5% over FY2010. Strengths Whole Foods Market is the world’s leading retailer of natural and organic foods and America’s first national “Certified Organic” grocer. The company is the 10th largest food retailer overall. This is an attractive company to work for as Whole Foods has been named by Fortune Magazine as one of the “100 Best Companies to Work For” in the U.S. for 15 consecutive years. Whole Foods has a strong focus on creating the right size for their stores. The company is focused on the right sized store for each location. Since FY2008, the company has downsized 20 leases by an average of 13,000 square feet each. They reduced approximately 1.4 million square feet from its development pipeline, downsizing 20 leases for stores in development and terminating an additional 22 leases...
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...My initial opinion prior to the debate is that in regards to what should be allowed to be used as pesticides, I believe that both synthetic and natural pesticides have its advantages and disadvantages. Natural pesticides that are found in certain plants have been specifically derived by that plant to protect itself from harmful pests. Although it may be effective in killing certain insects, it may not be as effective for other uses. For instance: a plant is found to secrete toxic chemicals in its nectar that target fire ants and the only way for the ant to be poisoned would be if it drank from the nectar, or bit into the plant itself. This toxin is contained inside the plant and has no exterior effects to surrounding animals. If a manufacturer extracted the pesticidal ingredients from the plant and turned it into a spray that people can use in their homes, how do we know what kind of effects it will have on the environment? Yes, the ingredients are all natural, but it was made specifically for the plant and it was fully contained in nature. The toxin could have acidic properties and enzymes that could deteriorate surrounding environments and kill other organisms, not just fire ants. Perhaps there is a reason why the toxin is found to be naturally isolated inside the plant. Although there have been negative opinions towards synthetic pesticides, sometimes man-made pesticides may actually be more beneficial to the environment than their natural counterparts. Scientists are able...
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...Employee Name: Date: 9/27/11 Company: Whole Foods 10-K Annual Report 2010 PESTEL 1.Political pg. 5: We have encouraged innovative animal production practices to improve the quality and safety of the meat and poultry sold in our stores while also supporting humane living conditions for the animals. * Whole Foods has taken a stance on a long debated political issue of the treatment of animals used as livestock. Taking an interest in the living conditions of animals appeases their client base that believes strongly in this issue, and the company also gets the benefit of knowing that the animal products they place on their shelves have come from cleaner and safer environments. 2.Economic pg. 9: Created in 2005, the Whole Planet Foundation is an independent, non-profit organization whose mission is to empower the poor through microcredit, with a focus on developing-world communities that supply our stores with product. * Developing the economy in developing-world areas is necessary to create new capital markets. Microcredit initiatives are an excellent way to start the process, and Whole Foods is using this foundation to help perpetuate the development of the products they sell. Having product made in a country where production is cheaper, while also aiding the growth of a poorer country’s economy can only be beneficial to the company in the long run. ...
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...Eden Organic Foods Introduction describing your selected organization and scenario Eden Organic was founded by Ann Arbor in the 1960s with the help of friends sourcing natural food. At the time, this organization was founded organic all nature foods were a rarity and hardly available, so Eden food co-op was started as a way to make these healthy alternative more readily available. Eden co-op grew into a nature food store from its first initial $200 order to Erewhon in Boston and Chico-san in California, which lead co-op members to travel to local farms going door to door to find framers to grow foods using all nature organic methods. Eden organic grew to offer whole grains, beans, soy foods, cereals, vegetable oils, seed, miso, nut butter and more. As more demand for Eden products materialized, the brand began to develop as more and more consumers and store took interest in the organic food Eden had to offer. In 1972 Eden organic was available to open its first warehouse and within that same year, established a relation with artisan Japanese traditional food makers along with the imports of many of its products and becoming the best nature food company in United States and Canada (Eden Foods, 2011.) As the oldest natural and organic food company in North American and the largest independent manufacture of dry organic foods, Eden organic is looking into new ways to enhance its existing products and services to meets it customers expanding needs. Eden organics...
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...United Natural Foods Judith Palmer MGT/521 April 14, 2015 Daniel Kearney Founded in 1996, United Natural Foods, also known as UNFI, is the leading national distributor of natural and organic foods in the United States and Canada (United Natural Foods, 2009). UNFI serves more than 40,000 customer locations, which includes natural food stores and supermarkets. With Whole Foods as one of their leading retailers here in the United States, UNFI currently has 33 distribution centers. Although UNFI has experienced revenue growth, organic food is still only a small part of our food system, and the price of organic foods remains more expensive than conventionally produced foods. The biggest complaint from consumers is the high price of organic foods. Organic foods cost more because of their inefficient distribution network. Strategic and Operational Plans Organic foods are more expensive because of scale. Organic farms don’t operate at scale, so the cost of marketing and distributing organic food is higher. Also, in addition to UNFI’s scale, UNFI also suffers from inefficient distribution network. Now with scale, distribution, supply, and cost taken into consideration, shoppers are limited to purchasing organic foods. UNFI strategic and technology plans to improve their distribution and efficiency of their supply chains is to: * Improve Operations (distribution): The challenge to deliver their organic food in the most efficient way would be dissolved by using distribution...
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...From analyzing the external and internal situation, although Whole Food Market has some big competitors, the company still has a strong competitive advantage over other key rivals in the natural and organic food industry. What is strategy that Whole Food Market implemented to compete successfully with their rivals? II. Process of finding the answers Base on the theory in the textbook and the information from Internet as well as results of the previous BCD, our group will test each of strategy to find out what is the most appropriate one for Whole Food Market Company. Testing 1. Low cost provider strategy Work Condition | Evaluation | Product price between rival sellers is vigorous | YES: From the case, competitors of Whole Food Market are trying to lower their price to compete and gain customers. For example: Trader Joe’s price is so attractive with customer, Fresh and Easy also is 20-25% bellow traditional supermarkets that is similar with Wal-Mart’s price and Sunflowers farmer market... | Products are readily available from many sellers | NO:Natural & organic products are special products. From the case, most of retailers try to supply for themselves and carry their private product labels, ex: 45% of products on Fresh and Easy Neighborhood Market product shelves were supplied by themselves, 2000 items carries the Trader Joe’s label, Whole Foods also private label for their products: Whole Body, Whole Baby... | Industry product are not easily differentiated |...
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...Nature View Farms: • Yogurt manufacturer • Yogurt Package: Package Natural Food Store Price Supermarket Price 8 oz. cup $0.88 $0.74 32 oz. cup $3.19 $2.70 4 oz. cup multipack $3.35 $2.85 • Product available in Natural Food Stores • Good Brand Image in Natural Food Store channel • Current Revenue = $13 million • Target Revenue = $20 million in 2 years • Considering expanding into Supermarket channel and does not want to hurt loyal natural food store customers • Has three options to launch business into Supermarket channel Market Facts: • Yogurt is consumed by 40% of the US population • Among those 70% are women • Organic dairy products are bought by 74% of heavy organic buyers and 29% of light organic buyers • For natural food buyers, factors to see when buying yogurt are ingredients and whether it is organic or not • Factors to check when deciding which yogurt to purchase are package, size, price, flavor, freshness, ingredients and whether it was organic or not • Shoppers at Natural Food Stores are older, educated and have higher incomes • 46% of organic food consumers bought at supermarkets • 25% bought at a small health store • 29% at natural foods supermarket • 67% of US households said price was a barrier to their purchase of organic products • 58% said they will buy more organic products if price was less • 44% consumers said there was need for wider selection of organic products Option 1: • Expand SIX Stock Keeping Units (SKUs)...
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...A company which has positioned itself as successfully as Whole Foods Market has been able to, does not exhibit a need for major changes to continue growth. While its model “Whole Foods, Whole People, Whole Planet” states in broad terms its general goals, when looking to make changes and improvements to increase market share and profitability, Whole Market Foods needs to get “Whole Presence, Whole Investment, Whole Expansion”. Whole Foods Market has been successful in purchasing competing stores and building its own stores in researched locations. In the Whole Presence aspect of continued growth, Whole Foods Market needs to carefully continue both practices, with emphasis on carefully because during recessions, moderation and liquidity are crucial to success. While growth is good, it is important to tread carefully as to not appear as though Whole Foods Market has the intention of monopolizing the organic foods market. This can be accomplished by approaching coveted companies as mergers and not hostile takeovers. Furthermore; regarding its public relations, it should be transparent in its business dealings, as is stated in its core values. Whole Foods Market has not shied away from its intentions to grow rapidly; however, as successful as it has been thus far in its expansion, it needs to stay focused on the perception of the consumer. If Whole Foods Market grows too rapidly, it can be perceived as profiting so much from consumers that it can prosper while consumers struggle...
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...| Whole Foods Market | Case Study Analysis #1 | | Britney Brumfield | 3/2/2014 | | Whole Foods Market was found in 1980 and has progressed from a local super market found in Texas, into the globes largest provider of natural and organic foods with over 270 stores worldwide. The rapid growth and success of Whole Foods is due to having “remained a uniquely mission driven company highly selective about what we sell, dedicated to our core values and stringent quality standards and committed to sustainable agriculture” as stated by the companies CEO John Mackey. Whole Foods states its purpose as a corporation is helping support the health, well-being, and healing of people, team members, and business organizations in general, and the planet. This is Made known by the company motto “Whole Foods, Whole People, and Whole Planet” (Whole Foods). (Fig.1) Whole Foods Market Motto (Fig.1) Whole Foods | Whole People | Whole Planet | * Highest quality * Least processed * Most flavorful * Natural foods NoArtificial: * Additives * Sweeteners * Colorings * Preservatives | People are their companyPassionate employeesMotivated employees | -Whole Planet Foundation-support food banks -Sponsor neighborhood events -Donate to local non-profit groups-Support of organic farming and sustainable agriculture | (Fig.2) Whole Foods Market’s Core Value | Selling the highest quality natural and organic products | Satisfying and delighting costumers | Team...
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...Threat of new entrants: - High. Organic chains will see impacts if regular grocers pick up on the organic food segment. Mass market offerings with wider market reach (Kroger, Walmart) will drive those consumers closer to home and Whole Foods will see decline Rivalry amongst competition: - Hi: no sub for organic Threat of Substitutes: - Low. Until supermarkets start carrying full lines of organic products. No substitute for organic—just the brand name and the price. Most organic chains are small scale (20k sq ft or less). - Barg power of Suppliers: - High. Most organic offerings come from a few major organic farms in California. Most independent small-scale farmers don’t have the bargaining power to affect their supply pricing and the big chains, being so few of them but providing so much, have more power. Barg power of buyers: - Low to moderate. They do have the option of walking and going to supermarkets Strengths: - The quality of food - The ‘experience’ of the customer - Branding and image - The location of great store for market targeting - Loyal customer base - Corporate culture and store Weaknesses: - High in prices (Whole paycheck) - Restricted or narrow target market - Lack of international operations - Company relies on word-of mouth advertising Opportunities: - The expansion of food selection - The expansion of private label brand (perhaps links with huge chain for generic distribution) ...
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...By 2006, Whole Foods Market (WFM) had evolved into the “world’s largest retail chain of natural and organic foods supermarkets.” (Case Analysis-Whole Foods Market 2005 p.1). An example of strategic decision making is WFM implementation of “Health Starts Here” ; an initiative to offer healthier pre-fab food options with limited add-ons such as refined flour and sugar and processed ingredients. The purpose is to encourage better eating among its shoppers. To make it successful they hired healthy eating specialist for each store and created wellness clubs. This is unconventional, and WFM is performing different activities from rivals, and more important this new activities fit and reinforce the other activities such as: selling the highest quality, least processed natural food, satisfies and delights their customer, active support of organic farming, sustainable agriculture that helps protect our planet and decentralized, self-directed team culture. Their Strategic Based Position is a Needs-Based; they seek to meet organic grocery needs of its target customers which are college educated residence interested in eating natural and organic foods. There strategic position is sustainable because of the trade off of being so streamlined with their organic options that tend to be higher priced, by doing so gives up their service to lower income families by not providing lower cots options. As well as only purchasing from farmers that meet WFM’s organically certified requirements...
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...of their revenues, and four 32oz cups, which make up the remaining 14%. The demographics of the people of typically purchase their products are found on the North Eastern and Western Coast. There average shopper are usually more educated and have higher earning incomes that allows them to purchase Natureview’s organic yogurts. Also of these people the majority (over 70%) of them our women who purchasing the products. Also from the article a piece I thought was interesting was that the consumer would choose products based on ingredients and whether or not the product was organic, so price isn’t a major factor. Because their target demographics fit these characteristics they tend to sell to more expensive food retailers like Whole Foods and Wild Oats, who provide organic foods to their customers. As for...
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