September 23, 2010
Case Study: Whole Foods Market
Since 1980, Whole Foods Markets has grown from a small local store in Austin, Texas, to the largest retail chain of natural and organic foods in the United States. Whole Foods has been leading the natural and organic foods movement across the United States, working to gain acceptance among the growing number of consumers interested in eating healthier foods. The company has built a reputation for being selective in the products sold and only providing its customers with the highest quality foods available. The mission of the company is to advance the cause of long term sustainable agriculture practices while promoting a cleaner environment. Thus, explaining the company motto, “Whole Foods, Whole People, Whole Planet.” Whole Foods thrives on promoting an interactive store and good corporate culture among all team members. Having a sense of collective fate integrated throughout the company, Whole Foods has worked to make a positive work environment where team members can build a rewarding career, reaching their highest potential. Through this strong corporate culture they have attained Fortune’s 100 Best Companies to Work For, for 11 consecutive years from 1998 to 2008. John Mackey, founder and CEO, states that the company’s vision is, “To become an international brand synonymous not only for natural and organic foods but also for being the best food retailer in every community where Whole Foods stores were located.” Managers at Whole Foods, strive to create a pleasurable shopping and eating experience for its customers, promoting an interactive store atmosphere where community can interact, educate, and grow. In this report I will examine and study Whole Foods Market and its effectiveness in the market. Along the way I will be performing an environmental analysis, defining the company’s strategic direction and how it could be improved, giving recommendations to find the ideal strategy for each level of the business, and implementing a plan to address these recommendations.
After fully examining the internal and external environments at Whole Foods Market, I have identified the key strengths, weaknesses, opportunities, and threats that have shaped Whole Foods since 1980.I believe that Whole Foods has several important strengths that have enabled the company to succeed in gaining market power within the grocery industry. Being a differentiated establishment from its competitors, Whole Foods, provides its customers a superior shopping experience like no other, making them competitively valuable. Whole Foods has created an ideal corporate culture among all employees, adding to the company image of having happy employees and making happy customers. Growth within the Natural Foods market has created many opportunities for Whole Foods to gain the majority market share. The 2002 USDA labeling standards made customers more educated in the merit of various organic products, causing consumers to purchase more truly organic foods from Whole Foods Market rather than purchasing fake organic foods from conventional supermarkets. Becoming the first national “Certified Organic” grocer by Quality Assurance International, gave Whole Foods a rock solid selling point for its products. As more and more consumers became educated on the importance of healthier foods Whole Foods had an increase in sales of about 20 percent annually. After struggling to stock their shelves with organic beef and chicken, Whole Foods, launched their own private-label brand of organic foods. Being only one of two companies to integrate backwards giving them a slight advantage over the competition. Just as the opportunities have grown for the company since 1990 so have the threats from its competitors as natural and organic foods have grown into popular demand. Being a competitive market, conventional supermarkets aggressively responded to the increase in demand for natural and...