Case Study on Whole Food

Topics: Organic food, Organic certification, Organic farming Pages: 41 (11301 words) Published: June 25, 2013
Thompson−Gamble−Strickland: Strategy: Winning in the Marketplace

V. Cases in Crafting and Executing Strategy

1. Whole Foods Market, Inc.

© The McGraw−Hill Companies, 2004

CASE
Whole Foods Market, Inc.
Arthur A. Thompson The University of Alabama

1

Founded

in 1980 as one small store in Austin, Texas, Whole Foods Market had by 2002 evolved into the world’s largest retail chain of natural and organic foods supermarkets. The company had over 140 stores in the United States and Canada and sales of $2.7 billion; revenues had grown at more than 20 percent for 12 consecutive quarters. John Mackey, the company’s cofounder and CEO, said that throughout its rapid growth Whole Foods Market had “remained a uniquely mission-driven company—highly selective about what we sell, dedicated to our core values and stringent quality standards and committed to sustainable agriculture.” The company’s stated mission was “to improve the health, well-being, and healing of both people and the planet”—a mission captured in the company’s slogan “Whole Foods, Whole People, Whole Planet” (see Exhibit 1). In pursuit of this mission, the company’s strategic plan was to continue to expand its retail operations to offer the highest quality and most nutritious foods to more and more customers, helping them to live healthier and more vital lives. During its 22-year history, Whole Foods Market had been a leader in natural and organic foods movement across the United States, helping the industry gain acceptance among growing numbers of consumers. The company’s long-term objectives were to have 400 stores and sales of $10 billion by 2010. John Mackey’s vision was for Whole Foods to become a national brand and be regarded as the best food retailer in every community it served.

The Natural and Organic Foods Industry
The combined sales of natural and organic foods—about $34 billion in 2001—represented about 5 percent of the roughly $685 billion in total U.S. grocery store sales. Natural foods are defined as foods that are minimally processed; largely or completely free of artificial ingredients, preservatives, and other non–naturally occurring chemicals; and as near to their whole, natural state as possible. The U.S. Department of Agriculture’s Food and Safety Inspection Service defines natural food as “a product containing no artificial ingredient or added color and that is minimally processed.” Sales of natural foods products had increased at double-digit rates in the 1990s, but

Copyright © 2003 by Arthur A. Thompson. All rights reserved.

C-1

Thompson−Gamble−Strickland: Strategy: Winning in the Marketplace

V. Cases in Crafting and Executing Strategy

1. Whole Foods Market, Inc.

© The McGraw−Hill Companies, 2004

C-2

PART FIVE

Cases in Crafting and Executing Strategy

Exhibit 1

WHOLE FOODS MARKET’S SLOGAN: WHOLE FOODS, WHOLE PEOPLE, WHOLE PLANET

Whole Foods We obtain our products locally and from all over the world, often from small, uniquely dedicated food artisans. We strive to offer the highest quality, least processed, most flavorful and naturally preserved foods. Why? Because food in its purest state—unadulterated by artificial additives, sweeteners, colorings and preservatives—is the best tasting and most nutritious food available. Whole People We recruit the best people we can to become part of our team. We empower them to make their own decisions, creating a respectful workplace where people are treated fairly and are highly motivated to succeed. We look for people who are passionate about food. Our team members are also well-rounded human beings. They play a critical role in helping build the store into a profitable and beneficial part of its community. Whole Planet We believe companies, like individuals, must assume their share of responsibility as tenants of Planet Earth. On a global basis we actively support organic farming—the best method for promoting sustainable agriculture and protecting...
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