Whole Foods Case Summary

Adjusting the pricing strategy and targeting key demographics will help to increase Whole Foods’ market share in the organic industry. If instituted successfully, consumers will be able to choose which experience they would prefer: either a larger atmosphere with a greater selection and supply or a cheaper, smaller environment in which popular food items are available at a lower cost. This can satisfy both those who are interested but on a budget and the loyal customers who have high disposable income that is used to purchase premium organic products without regard for price.

A weakness that Whole Foods have is their reputation. A reputation for a grocer is key to its survival and they have the reputation of being very expensive or some call it “whole paycheck.”

Today an increasing desire from consumers is to have healthy and organic product offerings. While

Consumers view Whole Foods Markets as being very expensive and have given the retailer the nickname “Whole Paycheck”. Whole Foods carries a wider variety of organic foods and healthier brands besides their private brands. Whole Foods is experiencing a decline in sales due to other stores; like Wal-Mart, who are stocking organic foods at much lower prices; which has decreased differentiation (Lutz, 2014). Its decentralized business model decreases efficiency in procurement, distribution, and marketing efforts.

Whole Foods is a supermarket that has successfully become the leader in the organic food segment of the grocery industry. While traditional markets have low brand loyalty and recognition, Whole Foods has focused almost entirely on its brand image, causing their strategy to be one of differentiation over cost leadership. Whole Foods is known as being far more expensive than other chains, due to this brand recognition. In their press release for the Q4 2014 results, they describe their vision and sum up what helps them develop that brand recognition. “We hold the idea of “food” to a higher standard, banning more than 75 ingredients commonly found in other stores, and we believe our unparalleled quality standards

Whole Foods Market, Inc, is an Austin, Texas based foods grocery that has the finest natural and organic food available, including produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, beer, wine, cheese; in addition to whole body, floral, pet products, and household products. Whole Foods is among the most profitable health food retailers in the United States. The rapid growth and market success has much to do with having remained a uniquely mission-driven company, highly selective about what they sell, dedicated to their core values, stringent quality standards, and committed to sustainable agriculture.

Whole Foods continues to grow as the leader in organic and natural grocery supplier in the United States, Canada, and England. The company has continued to open new stores in new markets, as well as, opening two 365 by Whole Foods Market stores. Whole Foods became the industry leader by providing high quality natural and organic food products for consumers, which is a better and healthier product for consumers to consume. This is a big part of their competitive advantage. Other grocery stores are limited in their organic supplies, where as at Whole Foods, it is the primary focus. Another comparison is that with the help of Instacart, Whole foods is now the leader when it comes to delivery of fresh groceries then any other grocery in the industry. (Quarterly Results)

Whole Foods Market believes that the operation of a company should exceed beyond profits and focus on creating values and relationships within their communities. Whole Foods Market is “currently the 8th largest public food and drug retailer in the U.S., ranking #232 on the Fortune 500” (Whole Foods Market Annual Report, 2013). Food retailing has gained more competiveness over the years. Whole Foods Market, has been awarded, “America’s Healthiest Grocery Store.” Whole Foods Market’s “seek out the finest natural and organic foods available, maintain the strictest quality standards in the industry, and have an unshakeable commitment to sustainable agriculture” (Whole Foods Market Company Info, 2014). They believe that providing customers with natural and organic products, they are giving customers the most nutritious food and the best tasty food as well. “The quality of their foods is measured by nutrition, freshness, appearance, and taste” (Whole Foods Market Company Info, 2014).

1.2 Executive Summary Whole Foods Market, Inc. is been respected as a pioneering company for their quality values, a commitment to community and eco-friendly awareness, a healthy growing model and widely admired employment performs. Nevertheless, the business has confronted current problems as a consequence of the economic recession, growing competition, and difficulties from acquisitions. To renew the company from past lows in its hardest year in history, Whole Foods Market must reconsider its expenses, relocate its development strategies, and encourage its brand to participate for the falling customer spending dollar. Throughout the fluctuations in strategic initiatives it’s imperative for the business to preserve Whole Foods Market’s core values and its brand image integral.

Whole Foods Market first opened on September 20, 1980 in Austin, Texas which is the company headquarters. The founders were John Mackey, Renee Lawson, Craig Weller, and Mark Skiles. These four business people decided that the natural food industry was ready for a supermarket format (Whole Foods Market History, 2015). The current CEO’s are John Mackey and Walter Robb IV. Whole Foods Market stock ticker symbol is WFM and their NACIS code is 445110 (Morningstar). The industry sector the company is listed under is grocery store and retail trade. Whole Foods Market is the eight largest company in the United States with 427 stores located in North America, Canada, and the United Kingdom. The total number of employees is more than 90,000 people. Whole Foods Market has a business to business model where they merged with multiple companies such as Bread of Life, Fresh Fields, Food for Thought, Amrion, Allegro Coffee and other organizations with the concept of expanding their enterprise (Mackey, 2012). Whole Foods Markets purchase inventory from suppliers where consumer can buy fresh organic food online or in stores. Some of the products Whole Foods Market specializes in are seafood, meats, cooked goods, and bakery goods (Whole Foods Market History, 2015).

The fundamental elements of Whole Foods Market revolve around offering the finest organic and natural foods to the customers through the retail grocery stores. It strives to sell products of the highest quality, most flavorful, least processed, freshest, and naturally preserved food available. Whole Foods market ensures that the goods are not just labeled organic; instead, they are grown and treated without hormones, pesticides, artificial fertilizers, and other additives. In this case, the ability to deliver superior value to customers under sound environmentally Fair Trade Practices best depicts Whole Foods. It is in tandem with the food industry, although part of its success originates from the narrow market

One of their strengths is that they are passionate about high quality, all-natural products and being a supplier of natural food. In my opinion, I think that one of Whole Foods biggest challenges is that their products are priced higher than that of their competitors. This is based on the fact that with organic and all natural product the cost is more as far as growth and marketing these products compare to that of Trader Joes, Walmart, Fresh Market and other grocers. Just to think that with organic and all-natural products there are no additives or chemicals involved in the growth process of the products.

Whole Foods’ business model is designed to ensure that their customers receive fast and convenient services. It also appreciates quality over quantity so as to win customer trust that will be able to see

Whole Foods Market has expanded by a mixture of opening its own new stores and acquiring already existing stores. Today WFM does not follow this strategy, instead their motivation is to open its own large stores. This is due to noticeable sales differences in larger stores as opposed to smaller stores. WFM locates these newer stores in upscale areas of urban metropolitan centers and high-traffic shopping locations. Not all WFMs are isolated structures; some are located in strip malls. WFM offers a larger selection of natural and organic foods than any other grocery store. WFMs marketing expenditure is extremely small. They spend a measly 0.5% of their revenues on advertising. Their chief marketing strategy relies on word-of-mouth. WFM strives to meet or exceed customer expectations. This is so customers receive competent, knowledgeable, and friendly service and become advocates of WFM. The employees here have a decentralized team approach for store operations. This is so some personnel, merchandising, and operating

Over the past few decades, the diet and health food industry has become big business. Americans, along with people in many other countries, have become more educated about the benefits of exercising regularly and eating healthy. Whole Foods Market is pursuing a business strategy that strives to offer products that are of the highest quality, least processed, most flavorful and natural foods possible (Whole Foods Market,