Whole Foods Memo

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To: Professor Smith
From: Londa May
Date: March 1, 2010
Re: Requested Situation Analysis for Whole Foods Markets
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In response to your request for a thorough analysis of the strategic position of Whole Foods Markets, and the industry in which it operates, an analysis has been performed and the results can be found below. In conclusion, a recommendation for Whole Foods Markets, based on the analysis, will be given.

Internal Analysis

Fundamentals and Core Values of Whole Foods Markets

The cornerstone of Whole Food’s strategy is to carry the highest quality, lowest processed-foods, and the most flavorful and natural preserved foods available. Whole Foods deepest purpose is to help support the health, well being, and healing of people (customers, the Whole Foods team, and businesses) and the planet. John Mackey, cofounder and CEO of Whole Foods, attributes the rapid growth and success of Whole Foods to developing and maintaining a uniquely mission-driven company; a company that is highly selective about what is sold, that remains dedicated to its core values and high quality standards, and is committed to sustainable agriculture. Whole Foods wanted to be the international brand for natural and organic foods and be the best food retailer in every community in which Whole Foods Markets were located. The chief elements of Whole Foods strategy are as follows:

* Selling the highest quality products. Whole Foods Markets featured 30,000 natural, organic, and gourmet food products and non-food items. In 2007, Whole Foods was the world’s biggest seller of organic produce (comprising 67% of Whole Foods total sales, compared to the 40-50% of sales in other supermarket chains). High quality products included fresh perishables, baked goods, meats, and seafood, which differentiated Whole Foods from other supermarkets and attracted a broader customer base. To uphold a 100% guaranteed satisfaction to Whole Foods customers, Whole Foods had stringent product quality standards and customer commitments:

* Carefully evaluate each and every product sold.
* Feature foods that are free of artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats. * Passionate about great tasting food and the pleasure of sharing it with others. * Commitment to foods that are fresh, wholesome and safe to eat. * Seek out and promote organically grown foods.

* Provide food and nutritional products that support health and well being.

* Satisfying and delighting customers. Whole Foods Markets places a strong emphasis on satisfying and maintaining a commitment to the customer. As part of its merchandising strategy, Whole Foods wanted to create an inviting and interactive store atmosphere for a fun and pleasurable shopping experience. Whole Foods wanted its customers to view Whole Foods as a “third place,” third to home and the office. A few Whole Foods stores even offered valet parking, home delivery, and massages! To maintain communication with the customers, Whole Foods stores feature “take action” centers, where customers could leave feedback and comments. Whole Foods wanted to turn highly satisfied customers into advocates for Whole Foods Markets. Customers could get personal attention in each store department and team members of Whole Foods were knowledgeable and enthusiastic with customers.

* Team member happiness and excellence. Whole Foods Markets was founded because its cofounders believed that the natural foods industry was ready for the supermarket format. When the first store opened in 1980, it contained a staff of only 19 people. With this immediate success, the company expanded to 276 stores in 38 states, with teams of 85-600 members per store, and a total of 54,000 by 2008! Whole Foods had a team approach towards...
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