Team 3
Rebecca EggermanAlexander JohnsonMiguel LopezHannah StephensCarissa Tarnowski
Company Background
Founders: John Mackey and Renee Lawson Hardy and Greg Weller and Mark Skiles
1980 Safer Way Natural Foods and Clarksville Natural Grocery merged creating Whole Foods Market
Merger established blue ocean and now Whole foods is the iconic brand for natural foods and practices
Grown to over 340 branches in the US, Canada, and the UK and is now a $11.7B company
Mission Statement
The motto highlights their mission:
Whole foods: We obtain our products locally and from all over the world, often from small, uniquely dedicated food artisans.
Whole people: We recruit the best people we can to become part of our team. We empower them to make their own decisions, creating a respectful workplace where people are treated fairly and are highly motivated to succeed.
Whole Planet: We recognize the connection between our lives, our communities and the environment
Core Values
Selling the highest quality natural and organic products available
Satisfying and delighting our customers
Supporting Team Member happiness and excellence
Creating wealth through profits and growth
Caring about our communities and our environment
Creating ongoing win-win partnerships with our suppliers
Promoting the health of our stakeholders through healthy eating education
Competitive Strategy Analysis: Revenues
2008 $7,954 million
2009 $8.032 million
2010 $9,006 million
2011 $10,108 million
2012 $11,699 million
Competitive Strategy Analysis: Product Differentiation
Price Premium
High Quality
Harris Interactive Study 82% said prices impacted
grocery shopping 72% will continue to buy
natural and organic foods
Corporate Strategy Analysis: Pricing Strategy
Revamped
Value Offerings
Expanding Market Base with Lower Prices
The Whole Deal Virtual Value Tour Price Promotions Discounts
Expansion
Corporate Strategy Analysis: Quality
High Quality
Strict Quality Standards Foods free of artificial
preservatives, colors, flavors, sweeteners, and hydrogenated fats
Foods that are fresh wholesome, and safe to eat
Seafood Highest farmed seafood
standards in the industry First to offer Marine
Stewardship Council certified seafood
Meat and Animal Welfare 5-Step™ Animal Welfare Rating
Standards
Financial
Whole Foods 4%
Kroger’s 1.5%
SWOT Analysis
Strengths Market Leader Growth Quality and Store
Customization No. 19 on Fortune’s
World’s Most Admired Companies list
Weaknesses Concentrated in US Relative Slow Growth Pricey Perception Limited number of
suppliers
Opportunities Expansion Consumer Health Trends Increasing number of US
organic farmers
Threats Supermarkets introducing
organic products Consumers downgrading Increasing food prices and
inflation
Porter’s Five Forces
Potential Entrants Low
Suppliers Medium
Buyers High
Industry Competitors Medium
Substitutes Medium
Whole Foods’ Strategy: The Whole Foods Experience
Case Study
Shopped at least twice a month
Toronto
WFM Customer Affluent Educated White
Income Varied, but generally
much higher than the urban average
Customer Values
Environmental Sustainability
Local or organic food
Labor Justice Fair Trade
Community Building Shopping at a local market
to strengthen community relationships
First Visit Experience
I was amazed. I loved it at first sight. They say, can you fall in love at first sight? Yeah, you can!
The pleasures and the special role in their daily routines of the WFM shopping experience
“Outing”, “Vacation”, or “A retreat from the mundane world of work and family responsibility”
10Xers
What it is not
Is not the Fastest companies
Not the ones looking for the turbulent markets
Not the most innovative
The most radical changes
What they are
The ones that know when to be fast and when to be slow.
They find what works and why
The stay consistent as possible to great as stable environment to grow
The Blue Ocean
Cirque du Soleil
Didn’t compete with the big and established
They expanded the boarders of the market
They gleaned a new industry from the old one
Fire Bullets then Cannonballs
Why build new stores in new locations when somebody else has done it for you?
Whole Foods acquired its main competitor
They have an established customer base
They know the local market and community
Whole Foods Market’s Key Issues
Three of their most obvious key issues in the media in 2013 consist of the following:
The consumer’s want for Non-GMO labeled products on all products that contain do not contain genetically modified organisms
Whole Foods trying to expand into smaller areas with lower income populations to increase consumer base and have a larger number of store locations
CEO John Mackey’s strong, radical, libertarian views and push for more “Conscious Capitalism” which could be hurtful to the company
Options for Non-GMO labeling
Whole Foods has the option to either commit to labeling all of their Non-GMO products, which they have stated will take up to 5 years to complete with much research and investment costs, to provide customer satisfaction.
Whole Foods has the option to opt out of labeling all their Non-GMO products in order to be able to spend more money on new store locations and not have to deal with the disparagements from those who oppose the movement.
Options for Store Expansion: Goal 1,000 in US
Whole Foods has the option to continue to expand into smaller and lower income areas in order to reach their goals of eventually having 1,000 stores in the U.S.
Whole Foods has the option to only locate their stores in their traditional wealthy, large income areas, which is where their business seems to thrive most. This will better ensure guaranteed success in new store locations. There could be a chance that this option may not provide the company with being able to have 1,000 stores in the United States.
Options for CEO John Mackey’s Public Behavior
John Mackey can continue to be outspoken on his views of politics and business that will most likely ensure the business of people who believe in the same views as he does.
John Mackey can make the choice to become more reserved on publically speaking about his political views, which may ensure to keep more of his customers happy and not cause consumers with different views to protest or boycott Whole Foods.
Whole Foods Market’s pledge to consumers
“When Whole Foods Market fails to measure up to its stated Vision, as it
inevitably will at times, we should not despair. Rather let us take up the
challenge together to bring our reality closer to our vision.”
Industry Analysis: Business and Economic Characteristics
Health conscious individuals
Increasing popularity worldwide
Rapidly growing industry
Creation of Blue Ocean Competitor inspiration Supply strain
Industry Changes
Consumer demand increase Supply shortage Government involvement
WFM remaining profitable Innovative company Strategic adaptations
Competitive Forces
“Rival digestion” Acquiring various
companies Increasing market share
Relationship maintenance Grape supplier in Chile
Strategy innovation On the path to 10X
Strong Competitors
Traditional Grocers
Walmart Low prices Similar products
Kroger’s High quality products Competitive prices
Weak Competitors
Organic/natural grocers Sprouts Farmer’s Market
Privately owned Not a lot of expansion
Natural Grocer’s Recently publically
traded Bland atmosphere
Regardless of competitive prices and quality
Future Competitive Moves?
Build brand image Focus more on core
competencies
Increase advertising Consider Endorsements
Extend relationships Expand into more
countries
Keys to Competitive Success
Innovation
Core Competencies
Supplier Relationships
Expansion
Further Industry Analysis
Highly volatile and increasingly competitive market
Many new entrants into the industry
Volatile prices in costs of food
Whole Foods is not a cost leader
Key factors Strong growth strategy Commitment to quality of
goods
Driving Forces for Change New Paradigm for
customers in America New entrants into the
marketplace Labeling laws and
regulations Number of new entrants
into the market Genetically modified
products Number of customers
Customers seeking diet foods
New value on eating healthier
Additional labeling and regulations
New FDA regulations and labeling for GMOs
Foreign markets and expansion
Need for international presence
Competition Issues
Lack of economies of scale Need for expansion in the
UK and Canada Need for reduction in
store space
Walmart and giants Global supply chains Competitive advantage
Ambition of Whole Foods
Push for differentiation and value Quality over cost
Reduction in stores that it is expanding in to
Growth won’t save the company Use of lower ranged product line
365 organic
Questions?
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