Whole Food MARKET

Whole Food MARKET

COMPANY BACKGROUNDCORE VALUE, VISION & MISSIONFINANCIAL REPORTTHREAT, COMPETITIVE ENVIRONMENTWHOLE FOOD MARKET STRATEGY, STRUGGLING TO GROW IN AN INCREASINGLY COMPETITIVE MARKET SWOT ANALYSISKEY TO SUCCESS, WHY WHOLE FOOD

COMPANY BACKGROUNDIs the worlds leading retailer of natural and organic foodsIn 1980, become a company in a single natural food market by John Mackey, (current president and cofounder of Whole Foods) in Austin, Texas (Headquarter)Was recognized as Americas first national certified organic groceroffers 4,400 items ex. Produce, Seafood, Grocery, Meat and Poultry, Prepared Foods and Catering with highly focusing on perishable and prepared products, which account for about two-thirds of sales. Owns 4 private label products

highest quality natural and organic products w/premium priceannual percentage sales by product category

Main target is typically have a high percentage of college graduates 40% or more of the residents have a college degree as they are more likely to be aware of nutritional issues Encourage team members as well as strive to take care of consumers, bc they are as life blood of business and the two are interdependent on each other.

CORE VALUESelling the highest quality natural and organic products available Satisfying and delighting its customers Supporting team member happiness and excellence Creating wealth through profits and growth Caring about communities and environment Creating ongoing win-win partnerships with its suppliers Promoting the health of its stakeholders through healthy eating education Whole Foods has identified seven core values that specifically express the purpose of its business and not only provides profits, but creates value for its stakeholders:

Serving and Support Our Local and Global Communities

CORE COMPETENCIES/valueProvide the highest quality natural and organic foodsConveying to the customer the high quality of productOffer a healthy lifestyle and unique experience in the storesCaring about communities and environmentVISSION AND MISSIONVISSION of sustainable future VS uniquely MISSION

Whole food manage with Holistic Actions for a Sustainable World that strive to conduct business in a manner consistent with their mission and vision. Because company believes they are on the path to a sustainable future. FINANCIAL REPORT

From whole food market annual stakeholder report 2013, The data indicated that financial in WFM is in the good trend since 2009 to 2013, which net sales, operating income, free cash flow are increasingNet income, revenueFree cash flowhttp://financials.morningstar.com/ratios/r.html?t=WFMhttp://qz.com/206843/whole-foods-thinks-its-too-expensive/ down in 2009

THREATAndIncreasingly competitive market

CCOF tells customers that Whole Foods are not only following the USDAs Organic Rule but opening their stores up to third-party inspectors and following a strict set of operating procedures designed to ensure that the products sold and labeled as organic are indeed organic procedures

Whole Foods closing 32 Wild Oats stores and agreed to selling the Wild Oats Markets brandSo expand private label products 365 Everyday Value and 365 Organic. With the policy is their 365 product lines must match prices of similar products at Trader Joes and create pre-made meals sector serve people that interested in eating healthy and saving moneyCOMPETITIVE ENVIRONMENT eating healthfully environmental sustainability, the green movementdemand for organic and natural foods because consumer increasingly focus on lead to all supermarket including - traditional supermarkets are now introducing lifestyle ex WalMart, King Kullen, StopnShop,Krogers, Albersons, Safeway and Fairway discounted retailor ex , Walmart, Target Sams Club and Costco additional grocery store ex Stop, N Shop and ShawsOrganic food retailor- Trader Joes, natural by nature, Sprouts large national food chain ex Publix safeway Walmart

Main Competitor Past

Now - Rival Organic Chain - Mass market retailor In the early to mid 2000s, its biggest competitor was Wild Oats. In 2007

COMPETITIVE ADVANTAGEeven if Wal-Mart stocks hundreds of organic products on its shelves, the majority will still be the conventional stuff that most Whole Foods shoppers are trying to avoid. Add in the amazing selection of (high-margin) prepared foods that Wal-Mart and other grocers won't compete on, and Whole Foods' competitive advantage remains as strong today as ever,2014http://www.fool.com/investing/general/2014/04/12/did-wal-mart-just-kill-whole-foods-competitive-adv.aspx

Empowerment = Trust While small teams are essential to optimizing the flow of organizational trust, equally important is the philosophy of empowerment. The effectiveness of teams is tremendously enhanced when they are fully empowered to do their work and to fulfill the organizations mission and values. Empowerment must be much, much more than a mere slogan, however. It should be within the very DNA of the organization. Empowerment unleashes creativity and innovation and rapidly accelerates the evolution of the organization. Empowered organizations have tremendous competitive advantage because they have tapped into levels of energy and commitment which their competitors usually have difficulty matching. Nothing holds back empowerment more than the leadership philosophy of command and control. Command and control (C&C) is actually the opposite of empowerment and it greatly lessens trust. C&C usually involves detailed rules and bureaucratic structures to enforce the rules. Such detailed rules almost always inhibit innovation and creativity. People get ahead in the organization not through being innovative, but by following the rules and playing it safe. C&C may produce compliance from the workforce, but it seldom unleashes much energy or passion for the purpose of the organization. Empowerment = Trust. C&C = Lack of Trust., WFM

Whole Foods primary objective goes beyond 100% customer satisfaction with the goal to delight customers in every interaction. So they serve customer with high standard foodThey have a competitive advantage when it comes to the size of their stores. Very few natural foods stores have stores larger than 20,000 square foot Free cash flow compare w/competitivehttp://www.fool.com/investing/general/2014/06/04/whole-foods-competitors.aspxhttp://www.fool.com/investing/general/2015/03/11/why-whole-foods-market-inc-should-fear-kroger-co.aspx

2.79, 1.28, 0.945WHOLE FOOD MARKET STRATEGY- Differentiation Strategy- Expansion Strategy- Acquisition Strategy- Brand Image StrategyWhole food market strategy use competitive strategy and Growth strategy to gain their profit. Competitive strategy focuses on differentiation strategy with high quality, innovation and service to stand out from competitor and charge premium price more than emphasizes on the low cost while growth strategy focuses on expansion Acquisition and brand strategy make them has grown over the years.

Differentiation StrategyWhole Foods differentiates itself by maintaining a commitment to natural and organic products, high quality standards, emphasis on perishable product sales, and highly dedicated and empowered employees who deliver exceptional customer service. These differentiating factors have created a loyal customer base that values the Whole Foods experience These differentiating factors have created a loyal customer base that values the Whole Foods experience Esp in quality as excellence and innovation that allows them to charge a premium price for premium productsqualityinnovationperishable product sales natural and organic products empowered employees go green movement private label productsshopping experiencedifferentiation strategycommitment to natural and organic products: moreover they Whole Foods products differ by geographic regions and local farm specialties: carefully researched to ensure that they are meeting the demands of local community

high quality standards: products have to undergo a strict to determine if they are whole food materialemphasis on perishable product sales; it is the 2/3 of its saleand highly dedicated and empowered employees; ex team member who deliver exceptional customer service are well trained and have good service Economic recession, Whole Foods saw this as opportunity to enter a new area of business, the pre-made meals sector. They began selling pre-made dinners and lunches marketing towards those still on the go but interested in eating healthy and saving money. Offering the feed 4 for $15 deal, they were able to recapture some lost salesIf Whole Foods continues to come up with innovative ideas to still compete during a recession, there is much opportunity as the economy evolves and climbs up the economic life cycle into recovery, expansion, and boom states

the primary purpose of carrying these brands is to differentiate Whole Foods from its competition. Whole Foods chooses to not carry products such as Coca-Cola and Pepsi, but rather carries 365 Organic Cola. This alternative is in line with its organic brand image and provides value to its customers Difference shopping experience ex band wagon of go green movement From this the customers are not only local people but also category of upscale, educated, new age people

-Whole Foods has grown over the years through mergers, acquisitions and new store openings-PRICE few selected area but they are more focus on quality and service as a means of standing out from the competitionACQUISITIONBRAND IMAGEEXPANSION

Historically grown &EXPANSION & ACQUISITIONWhole Foods strategy of expansion and acquisition has fueled growth in net income since the companys inception which the number of stores in Whole Food Market are increasing gradually include United states Canada and the United Kingdom, Whole Foods believes there is a potential with a long-term goal for at least 1,200 stores in the United StatesBRAND IMAGE Are achieved through their four core competenciesSTRUGGLING TO GROW IN AN INCREASINGLY COMPETITIVE MARKET Just focus on expansion and acquiring stores strategy, with just looking to increase overall sales by opening new stores

As the company expands, this task increases in complexity and magnitudeOld: traditional StrategyNew: Brand image StrategyResult in:AVG weekly sales per store have decreased over the last number of years despite Sales overall increaseSolve:>>> should focus on growing sales within the stores they have Result in: This increase in competition can lead to the introduction of price wars where profits are eroded for both existing competitors and new entrants alikeincreasing number of competitors moving into the organic foods industryExpansion and Acquisition StrategyIMPACT OF EXPANSION increasingly difficult to find appropriate locations for new stores that are first and foremost in an area (2010, 29>17) - reduces the efficiencies because company has a big adaptation such as both are CostlyIMPACT OF EXPANSIONFuture acquisitions will be more difficult for Whole Foods as the FTC will be monitoring the company closely to ensure that they do not violate any federal antitrust laws through the elimination of any substantial competition within this market. Brand Image StrategyIMPACT OF BRAND IMAGE58 Unlike low-price leaders such as Wal-Mart, Whole Foods dominates because of its brand image, >> which is trickier to manage and less impervious to competitive threats. SWOT Analysis- Brand image and loyalty- Employee talent and retention - Extensive product offerings

- Little international presenceIncreasing rental expensesthey still have pricy while the growth of organic food industry are increasing and also have low priceThe target group is quite specificSpend much less than other supermarkets on advertising, just word of mouth to Whole food just focus on the expansion strategy- Growth Abroad Strategic acquisitions and integrations Increasing health conscious society Increasing Competition Stringent regulations KEY TO SUCCESSfocuses on earning a profit while providing job security to its workforce to lay the foundation for future growthWhole Foods, Whole People, Whole Planetemphasizes 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.

Brandable products and services: maybe the most prestigious brand in the supermarket business

Products positioned to increase market share: Private label 365 organic brand has been growing revenue rapidly Expanding addressable market for products or services: Organic food is fastest growing food market in the world

Pure growth companies are able to grow in all economic environments: WFMI grew revenue throughout recession

Exposure to emerging markets: expects to grow its market outside the U.S.

Significant insider ownership: CEO is paid $1 dollar per year, all compensation tied to the stock, similar model for other executives as well Compelling economic value added model: The company is famous and successful for its conscious capitalism and triple bottom line approach