...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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...Whole Foods Market evolved into the “world’s largest retail chain of natural and organic foods supermarkets.” The product awareness is harder for companies to prove their products are better products compare to other similar products in the market. However, the Whole Food has motivated this trend through the healthiness and wellness by highly selected organic foods. This strategic idea lays out the key areas of opportunity based on consumer requirements, brand equities, and attitudes that convert consumer behavior into purchasing the product. For that reason, Whole Food charged a premium price for the offered products. Whole Food is a leader in this segment of the industry; which enjoys the strong awareness of the brand (Egan, 2009). Whole Foods post strong profit and revenue in the market due to the company’s rapid growth and size, which gives realization about economies of scale in its chain supply. Until the last decade, people did not have enough knowledge about the organic food; therefore, Whole Foods has given information’s about organic products, which made consumer knowledgeable. The company has been pioneered in this segment that utilized well through opening new stores in different areas, for that reason, Whole Food became in a competition with retail leader Wal-Mart as well as other traditional stores. However, Whole Foods' growth and profit may reduce in the near future because Wal-Mart is expanding their sections of organic food along with other products, which...
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...- growing market for organic products esteemed 20% growth - new type of customer CON - explotion of costs, distribution, administrative, marketing - slotting expenses - insufficient ressources - time pressure - brand equity damaged Option 2: expand 32 oz. nationwide PRO - higher gross profit margin - high market share - lower marketing investment as being niche product - nationwide coverage - possible first step for further expanding actions in the future CON - high slotting expenses - large investment in human ressources (sales forcé) - investment in distribution logistic - investment in manufacturing increase - possible conflicto with cannel partners Option 3: introducing children’s multipack in natural foods cannel PRO - high gross profitability - low investment in additional marketing and sales - enforce current distribution lines - excellent positioning for the new product - higher growing rates of this cannel - no additional functional ressources needed - reinforce brand equity CON - insufficient potential revenues - dependence on one channel - “missing the right moment” - increasing competition Recommendations: I would recommend option 3. Froma strategical point of view, the supermarket channel should be an objective. Having in mind that natural products are going to be increasingly relevant in supermarkets in the future, Natureview should profit from its top brand positioning and awareness to be present...
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...Organizational Goals and Objectives Whole food presents a “Declaration of Independence,” (the combined single mission statement) as follows: Our motto — Whole Foods, Whole People, Whole Planet — emphasizes that our vision reaches far beyond just being a food retailer. Our success in fulfilling our vision is measured by customer satisfaction, Team Member excellence and happiness, return on capital investment, improvement in the state of the environment, and local and larger community support. Our ability to instill a clear sense of interdependence among our various stakeholders (those who are interested and benefit from the success of our company) is contingent upon our efforts to communicate more often, more openly, and more compassionately. Better communication equals better understanding and more trust. Whole foods clearly has instilled in its core values the importance of having a balance within their stakeholders which makes whole foods have a inviting nature for all parties involved. Subsequently, the Whole Foods mission statement satisfies the needs of all stakeholders. Although, whole foods does pride that their costumer is their more valued stakeholder. Our customers are the most important stakeholder in our business. Therefore, we go to extraordinary lengths to satisfy and delight our customers. We want to meet or exceed their expectations on every shopping trip. We know that by doing so we turn customers into advocates for whole foods. We guarantee our customers 100%...
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...makes the world taste better June 2012 Functional Ingredients Magazine Natural And Organic Trends In Flavor Formulation. The landscape of the American food market is painted with connotations of natural, organic and wholesome. Words including natural, all natural, organic, honest, homegrown, fresh picked and old fashioned are only a few that have found powerful places on store shelves. These words weave a story to consumers, easily lulling them into a connection with flora and fauna, front porches and fireflies that exist beyond the climate control of most food markets. With this reality in place, it should come as no surprise that “natural” remains a leading claim on new product labels. Indeed, the claim was included on 23 percent of food and beverage launches, according to a finding in the 2009 Mintel Global New Products Database. Taking in the scenery of packaging today, this trend does not seem to have slowed down and may have helped to revisit product development paths well trodden and forge those less traveled. In 2009, the popularity of the natural tagline, along with Michael Pollan’s demonization of high fructose corn syrup in his bestseller, In Defense of Food, may have helped consumers rediscover that sugar is a natural sweetener. Store shelves experienced a throwback to the days when America’s favorite soda brands sweetened their prized products without the use of HFCS. For all the sports fans out there, the soda that Mean Joe Greene famously gulped years ago...
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...Discuss the trends in retailing of organic foods and the impact of these trends on Whole Foods Market. Whole Foods is the world’s largest supermarket retail chain of natural and organic foods. This supermarket wanted higher quality, less processed, more flavor and preserved natural products. As the leader in natural and organic foods, Whole Foods looked for consumers that were concerned about what they were eating, their eating patterns and their health and wellness. John Mackey, CEO of Whole Foods has a vision that he doesn’t want to become just an international brand with natural and organic foods, but to be the best retailer in every community (Thompson, Strickland, & Gamble, 2010). Whole Foods company motto is “Whole Foods, Whole People, Whole Planet,” (Thompson, Strickland, & Gamble, 2010), this purpose is to help support health, well-being, and healing of both people-customers, team members, and business organizations and the plant. (Thompson, Strickland, & Gamble, 2010) The demand and trends for natural and organic is increasing with more people wanting to live longer, healthier, and more pleasurable lives. In 2000, the United States Department of Agriculture (USDA) reported more organic food was sold to supermarkets than the 14,500 natural food stores (Thompson, Strickland, & Gamble 2010). Congress passed the Organic Foods Production Act (OFPA) in 1990, to develop the standards and organically produced agricultural products to assure consumers...
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