Whole Foods Pestle

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PESTLE Analysis
Political Factors
“A Healthier You” Government Strategy
Reporting of organic prices.
Safety Inspections Services.
Evaluation: POSITIVE impact

Economic Factors
GDP: ↑ 3.9% in the 3rd qtr
Real Personal Consumption expenditures ↑3.0% in 3rd qtr
Disposable Personal Income ↑ 6.1 % in the 3rd qtr
US Business Cycle: At “slump”/ Wages/Labour
European Markets: Weak dollar against Euro, Surging Energy Prices, Increasing Interest Rates Evaluation: MODERATE impact

PESTLE Analysis
Socio-cultural Factors
Population Demographics: aging and longer life expectancies. Increasingly more health conscientiousness population.
Social pressures regarding the environment and animal welfare. Trend towards eating out rather than cooking.
Greater knowledge of links between health issues and food.
Evaluation: POSITIVE impact

Technological Factors
Emerging new internet capabilities: On line shopping service. Improved telecommunications facilities - NB for distribution & retailing of goods. Modern and advanced technology for processing of goods.

Evaluation: WEAK
PESTLE Analysis
Legal Factors
Employment Law
Competition Law
Health & Safety Law
Environmental Law
Organic Food Production Act 1990 & US Department of Agriculture established labeling standards in 2002. Evaluation: MODERATE
Environmental Factors
< 1% of US farmland certified organic in 2004
Environmental concerns.
Seas over-fished using damaging fishing practices.
Recycling and Energy Consumption

Evaluation: POSITIVE

PESTLE Analysis
Conclusion to PESTLE Analysis
Overall the macro environment is positive for WFM.
Economic indicators must be monitored closely both in the US and internationally. Legality of all its operations must be maintained. Action must be taken with respect to its usage of modern technology. The company advocates and educates staff and the public regarding environmental issues and concerns.

Porters 5 Forces Analysis
Competitive Rivalry
Trader Joes, Sunflower Markets and Fresh Market.
Since 2006 WFM merged with its main competitive rival: Wild Oats Markets. Initial strategy of large stores was competitive, now competition. Sunflower Market stores opening in locations where there is relatively few WFM and Wild Oat Stores. Evaluation: STRONG

Potential New Entrants
Likely, but WFM well established and market is well saturated and very competitive. Evaluation: WEAK
Porters 5 Forces Analysis
Substitutes
Conventional supermarkets with natural and organic food lines e.g. Wal-Mart, Kroger. Conventional supermarkets now selling more Organics than the 14,500 independent natural food stores. Since 2002 mainstream supermarkets have expanded their selections Since 2005 organic products sold in 75% of the conventional stores Fresh Fare targeting customers who shop at both conventional supermarkets and Whole Foods Conventional stores much greater in number and sales revenue. New supermarket chains have stores averaging 55,000 square feet Major food processors e.g. Kraft are purchasing and utilizing organic foods in the manufacture of their own ranges. Restaurants and Deli’s selling natural and organic foods.

Evaluation: FIERCE
Porters 5 Forces Analysis
Suppliers
Sellers/distributors of natural/organic foods - locally, regionally, and national Competition for products:- competitors can purchase large volumes and pay in cash e.g. Trader Joe’s. < 1% of US farmland certified organic in 2004, USDA goal 5% by 2013

Retailer competition for limited resources.
Leading food processors investing in organic foods = greater supply options e.g. Campbell’s organic tomato juice. Evaluation: STRONG
Buyers
Consumers of natural and organic foods and products.
Modern consumer targeted are wealthy and well educated.
Consumers selective but not bound by contract, switching is easy and risk free. Evaluation: STRONG
Porters 5 Forces Analysis
Conclusion
Intense Competition with exception of...
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