A SWOT analysis is a top-level evaluation of a company’s internal strengths and weaknesses; and opportunities and threats that are external to the company, but apply to the industry as a whole. Here, we provide a brief background summary as well as present team Third Shift’s SWOT Analysis for Whole Foods Market, Inc.
Whole Foods Market, Inc. (Whole Foods Market) owns and operates a chain of natural and organic foods supermarkets. As of September 30, 2007, the company operated 276 stores organized into 11 geographic operating regions: 263 stores in 37 U.S. states and the District of Columbia, 7 stores in Canada, and 6 stores in the United Kingdom. This includes 74 stores acquired from Wild Oats Markets, Inc. (Wild Oats) on August 28, 2007: 70 stores in 22 U.S. states and 4 stores in Canada. Whole Foods Market’s product categories include, but are not limited to, produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, specialty (beer, wine and cheese), Whole Body (nutritional supplements, vitamins, body care and educational products, such as books), floral, pet products and household products. On August 28, 2007, Whole Foods Market completed the acquisition of Wild Oats, which is a natural and organic foods retailer in North America .
•Strong financial performance
•Focused steady growth strategy over past 5 years
•Meticulous store selection procedure
•Wide product range and brands
•Worlds leading retailer in organic/natural foods
•Fortune’s no. 5 of 100 best companies to work for 2007 Weaknesses
•Relatively small scale of operations
•Modest supplier leverage
•Conservative word-of-mouth advertising policy
•Maintain recruitment of quality people with growth
•Managing relationships with increasing number of small suppliers •Limited product variety due to stringent selection process Opportunities
•Increasing demand for organic products
•Expansion in UK – and other geo-markets
•Leverage acquisition of Wild Oats to grow market share
•Cross market with Health and Fitness Centers
•Educate school children on benefits of organic/natural foods Threats
•Price competition from grocery giants like Kroger and Safeway •Government labeling and other regulations
•Economic slowdown in US
•Large chains expanding organic offerings
•Managing relationships with increasing number of small suppliers •Demand for organic foods may outstrip supply
Strong financial performance
Whole Foods Market has recorded a steady financial performance in the recent years. Its revenues increased from $3,148.6 million in 2003 to $6,591.8 million in the fiscal 2007 at a CAGR of 20%. The operating profit and net profit of the company have increased from $167.4 million and $98.9 million respectively in fiscal 2003 to $297.5 million and $182.7 million respectively in fiscal 2007. Also the company’s scale of operations is larger than its competitors, Ruddick and Village Super Market, who recorded significantly lesser revenues, operating profit and net profit. For the fiscal 2007, the revenue, operating profit and net profit of Ruddick were recorded at $3,639.2 million, $148.2 million, and $80.7 million respectively, while the revenue, operating profit and net profit of Village Super Market were recorded at $1,046.4 million, $34.3 million and $20.5 million for fiscal 2007. Strong financial performance and large scale of operations would provide financial flexibility to the company’s operations. Below are their income statements from the last 4 years.
Whole Foods Income Statement $000
Total Revenue$6,591,773 $5,607,376 $4,701,289 $3,864,950
Cost of Revenue$4,295,170 $3,647,734 $3,052,184 $2,523,816
Gross Profit$2,296,603 $1,959,642 $1,649,105 $1,341,134
Sales, General and Admin.$1,928,972 $1,603,212...