WHOLE FOODS CASE QUESTIONS
What are the chief elements of the strategy that Whole Foods Market is pursuing?
Whole Foods Market has a very well defined strategy that they are pursuing. First, Whole Foods strategy is to provide its customers with the highest quality natural foods that are “minimally processed, largely free of artificial ingredients, preservatives, and other non-naturally occurring chemicals; and as near to their whole, natural state as possible” (Thompson). The second part of their strategy is to live by their core values, which John Mackey elaborates on by saying, “our core values reflect the sense of collective fate among our shareholders and are the soul of our company. Our team members, shareholders, vendors, community and environment must flourish together through their affiliation with us or we are not succeeding as a business. […] By growing the collective pie, we create larger slices for all of our shareholders.” This part of the strategy is very utilitarian and shows the true values that the company wants to represent. The third key element of their strategy is to grow.
Whole Foods has a great strategy in terms of growth. Their strategy for growth from 1991 to 2002 consisted of a combination of building new stores from the ground up and acquiring small, owner managed chains with capable personnel and desirable market locations. From 2002 - 2006 they changed their growth strategy to building 10 to 15 brand new stores per year that were strategically positioned in metropolitan areas. Since 1991, when Whole Foods consisted of 10 stores, they have increased their amount of stores to 276 at the fiscal year end of 2007. The final chief element of Whole foods strategy is to have empowered employees that are able to make sure each customer has an experience that exceeds their expectations in order to get those customers to become advocates for Whole Foods.
Is Whole Foods’ strategy well matched to recent developments and conditions in the natural and organic foods segment of the food retailing industry?
As of 2007 the natural and organic foods industry accounted for 7.3% of the overall $850 billion grocery store purchases. During the 1990’s the whole foods market began to increase at double digit rates and since 2000 the industry has seen growth of 7-9% annually. Just by looking at the data of the market growth it shows that Whole Foods started to expand at the perfect time which allowed for their growth strategy to become a success. Because of the passage of the Organic Food Production Act people started to become informed about the healthiness of foods and became much more aware of what they were buying. Consumers also became much more aware of what was happening to the environment around them and as information flow began to increase
with the advent of the internet it only increased people knowledge of foods and companies good or bad practices in terms of sustaining our environment. Because of this, Whole Foods strategy to provide the highest quality food while having a very utilitarian set of values created the perfect match for those people that wanted to keep their bodies healthy while also keeping the environment healthy.
Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not? What do you like/dislike about the company’s “Whole Foods, Whole People, Whole Planet” motto? Do the motto and the principles underlying the motto really matter at this company or are they just nice words and window dressing? Explain.
I think that John Mackey has a very good strategic vision for Whole Foods. The reason I think that Whole Foods strategic vision is good is because the target market of Whole Foods seems to value Whole Foods stance in relation to quality of food and sustainability of one another and the environment. The people that go to Whole Foods to purchase their food are individuals that really do care about...
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