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Accounting Assignment -1

Question1: What is Whole Foods Market’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion? Answer1: Whole Foods Market’s strategy for success in the marketplace seems to be product leadership. Evidence of this can be seen throughout the documents. The first boldface heading in the company’s Declaration of Interdependence or we can say the first core value listed on the first page of the Annual Stakeholders Report is “Selling the Highest Quality Natural & Organic Products Available”. That shows that the company prides itself on not only having high quality products, but on having as high or higher quality than any other supermarket. Throughout the Stakeholders Report, phrases like “our emphasis on the highest quality perishable items” and “we adhere to the highest quality standards” reinforce that concept of product leadership. Perishable product sales account for about 67% of total retail sales. Customers choose Whole Foods Market primarily because they are able to buy better natural and organic foods and higher-quality perishable products than in conventional supermarkets. Further evidence of the product leadership CPV can be found in the company’s Declaration of Interdependence, which states “Our goal is to sell the highest quality products that also offer high value for our customers”. It could also be argued, of course, that the company focuses on the customer intimacy CPV, based on the second core value of “Satisfying and Delighting Our Customers”. This core value references the unique shopping atmosphere WFM wants to create for customers, and WFM seems to have a particular niche in its market but WFM’s bland core value seems to be a more basic statement that should be included on any company’s core values. Therefore, customer intimacy is NOT the main CPV for Whole Foods Market. Operational excellence is not the main CPV of Whole Foods Market either. The only place where price is mentioned is in the Declaration, where it states “high value is a product of high quality at a competitive price”. If the company were striving for Operational Excellence, they would tout the lowest prices and convenience of their product. Also, specialty items such as organic foods are seldom sold on the CPV of convenience or lower price due to the fact that they are generally more expensive than unspecialized items. Like most other companies, Whole Foods Market utilizes all three CPVs to some degree, but seems to rely on Product Leadership more than the others.

Question2: What business risk does Whole Foods Market face that may threaten its ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? Answer2: There are a number of business risks that Whole Foods Market faces that may threaten its ability to satisfy stockholder expectations. There is the possibility of fluctuations in its comparable store sales, meaning that value of additional stores may not match the value of present stores. This can be caused by less success in new stores or by new stores biting into the business of existing stores. Furthermore, increased competition may hurt the company by stealing customers and forcing the company to lower prices to be competitive, and economic fluctuations might drive consumers away if discretionary spending is lowered and consumers can no longer afford to spend more on organic foods. Here are some of the more prominent risks with suggested control activities: Here are some of the more prominent risks with suggested control activities:

1. Customers will defect to conventional supermarkets that are beginning to stock more natural and organic foods. Control activities: Whole Foods Market can expand its selection of product offerings, particularly...
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