The chief elements of strategy being pursued by Whole Foods Market (WFM) began with setting the direction in which the company wanted to focus it's attention and developing the core values upon which they would base their operations. According to the case study from our text, WFM clearly chose to specialize in a particular market: natural and organic foods (Thompson, Jr. et al. 2010, p. C-2).
Once they successfully established themselves as a local market, the company focused their resources on growth. They began to open additional stores and within 12 years of it's inception, WFM became a public company (Thompson, Jr. et al. 2010, p. C-6). In doing so, the company displayed their ability to be flexible in their strategy while remaining focused on the bigger picture: establishing and maintaining a competitive edge. In this effort, they acquired a number of organic/natural markets in the United States, Great Britain, and Canada. Not only did these acquisitions give WFM a competitive edge, it afforded them the ability to exercise more bargaining power with their suppliers, and greatly reduced administrative costs (Thompson, Jr. et al. 2010, p. C-9).
WFM's strategy is well matched to recent development and conditions in the natural and organic foods segment of the food retailing industry. By viewing WFM's Statement of Operations as listed in our text book one can clearly see how the company's strategy proves successful (Thompson, Jr. et al. 2010, p. C-23). Net income for WFM rose steadily at a compound average rate of 17.6% during the years of 2003 through 2007, while retail food market sales rose 4.6% during the same time period (Food Market Industry, 2010). An astounding growth rate for any business, let alone a specialty-product business.
According to the Organic Trade Association (OTA), 2010 sales of organic food and beverages was $26.7 billion, up 7.7% from 2009 sales. Natural retailers held 39% of the market share, while mass market retailers held 54% of total organic food sales in 2010. While mass market retailers hold an increasingly larger piece of the natural and organic food market, WFM has positioned itself to be a strong competitor by offering it's own brand of lower-priced goods, by creating a customer-friendly, visually attractive atmosphere, and by selling a vastly larger, more diverse variety of natural and organic foods (Journal of Case Research in Business and Economics p. 4). In addition, WFM grew from one small local store in 1980 to 299 stores at the end of fiscal year 2010 (Whole Foods Market, 2010).
John Mackey has an extraordinarily successful strategic vision for Whole Foods. The Our Future (Vision) Statement on WFM's Website references the importance of a “sustainable future... in a world that values human creativity, diversity, and individual choice.” He completes the statement by acknowledging the “relationships between our food supply, the environment, and our bodies.”
The motto, “Whole Foods, Whole People, Whole Planet” is directly linked to the firm's Vision Statement. Mackey backs this up by creating programs sponsored by WFM such as: the Local Producer Loan Program which provides “low interest loans to small-scale food producers and growers”, the Green Mission ensures WFM stores reused, recycled, and cut down on landfill waste, the Whole Planet Foundation “combats poverty and promotes self-sufficiency in third-world countries that supply” WFM with products, and the Whole Kids Foundation promotes healthy eating habits to reduce obesity in children (Whole Foods Markets, 2012).
These programs demonstrate that not only does Mackey talk the talk about the ideals and benefits of living green and taking care of one another and our planet, he walks the walk. He has eliminated disposable plastic bags from WFM store check out counters, uses recycled materials whenever possible, converted fleet vehicles to biodiesel fuel, and purchased renewable energy...
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