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?