Wild Oats is pursuing a market penetration strategy. Its private label brands areincreasing at a steady rate and many different retail channels are being employed toreach new consumers and increase brand awareness. Despite a troubled credit rating,the company will also open ten new stores and refurbish six existing sites this year.Prior to 2006, the company was focused on consolidation – a SKU rationalizationprogram to eliminate slow-moving products, the closure of 17 underperforming stores, afocus on increasing sales at existing stores, and a company-wide effort to increaseconsistency and controls. At this time, the company was striving to be the low-costdifferentiator in the health food space. This is evident in the claims that Wild Oatsoffered better products at better prices than Whole Foods, its top competitor.Currently, the organic/health food market serves a relatively small number of grocerybuyers. By streamlining processes, introducing more private label brands, investing inIT, and centralizing buying, merchandising, and pricing, Wild Oats is striving to attaincost leadership in its market. In other words, a focused low-cost approach is beingused. This is not an attractive position for Wild Oats because traditional grocers, withmore buying power and more efficient processes, are beginning to enter this high-growth market. Whole Foods, the market leader, has promised a pricing war to combatthe threat of Wild Oats expanding into its territory, pointing out that its company is better equipped to handle such price attrition. To combat these threats and the subsequenterosion of sales growth, Wild Oats is planning on opening several large prototype storeswith increased food offerings - especially goods with higher margins. Also, thecompany is offering its private label brands through several online retailers and selecttraditional grocers. With the entry of mass