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2010 how to grow in an increasing competitive market
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WHOLE FOODS MARKET 2010 How to grow in An Increasing Competitive Market?
INTRODUCTION Whole food market is a supermarket that only specialize in naturaland organic goods. Is also one of the largest natural food stores in the world. As of 2009 it has a total of 289 which are 273 stores in 38 states of USA, 5 in UK and 6 in Canada. Attract customers wanting to live a healthier lifestyle and environmentally conciseness. The current CEO is John Mackey. Head quarters Downtown Austin, Texas. Natural refers to food that is free of growth hormone or antibiotics. Certified organic is categorized as the US department of Agriculture defines it .
Background History • John Mackey first opened “Safer Way” store in Austin, in 1978. • When Mr. Mackey saw the unmet demand for natural and organic products, He joined his force with Craig Weller and Mark Skiler who were the owners of of “Clarkville Natural Grocery” to create Whole Foods Market. • This joint venture took place in Austin, Texas in 1980 resulting in a new company a single natural food market with a staff members of nineteen.
Cont. • When Whole Foods start to grow, it start to merge , open new stores and acquisition of different companies like • Allegro Coffee in 1997 • Pigeon Cove (seafood processing ) in 1996 • Produce Field Inspection Office and Select Fish (also sea food processing ) in 2003. • The last two purchases make the company the only supermarket to have it’s own and operate a waterfront seafood facility. • Wild Oats in 2007 The ownership right of Wild Oats has given Whole Foods the right of being leader in the market by adding 70 new stores.
Cont. • In 2008 , the store began to have unsteady movement towards it’s goal. • For the first time in 29 - years of history Whole Food reported negative same - store sales in the quarter ended December as the commodities in the store began to fell. • Whole Foods has been named for 13 consecutive years as one of the “100 Best Companies To Work For “ in America by Fortune Magazine. • In 2009 the sales was $ 8 billion.
SWOT ANALYSIS SWOT MATRIX • S-O strategy • Strength- Organizational Structure and Strong work force • Opportunity- Increase International Expansion • This can increase profitability • Whole Foods will learn different countries strategies, which open to new experience.
SWOT ANALYSISSWOT MATRIX • S-T Strategy • Strength-Strong Brand Recognition • Threat - Increasing Direct Competition The Strong Brand Recognition gives Whole Foods the ability to be leader and powerful in this category of the business. Having Direct competition will make Whole Foods to work harder to have a sustaniable market share and profitablity.
SWOT ANALYSISSWOT MATRIX • W- O strategy • Weakness - Premium Price (High) • Opportunities -365 stores This 365 stores are Whole Foods Sub- stores which are available to people who wants Organic Foods with lower price. This will give Whole Foods to have more customers who are in the average income level.
SWOT ANALYSISSWOT MATRIX • W- T strategy • Weakness - Only selling Organic foods • Threats- Increasing Direct competition Whole Foods weakness is one of it’s main reason for having strong brand recognition, but having competitors who sell both organic and inorganic gets more customers and income .
Corporate Level StrategyThe Mission and Goal • “Whole foods market uniquely mission driven: the company is highly selective about what they sell,dedicated to the stringent quality standards committed to sustainable agriculture. They believe in a virtuous circle entwining the food chain between human beings and mother Earth, each is reliant upon the other through a beautiful and delicate symbiosis.” Whole Foods Market emphasis on high quality in this point of it’s mission statement as “highly selective about what they sell” and “dedicated to the stringent quality”
cont. • “uniquely mission driven “ shows that how there organizational structure and strong workforce are in this together. • Preservation and sustainably are followed while providing a high quality of goods to the customers and high profit to the investors. • Whole Foods uses related diversification , which are supporting the core business activity of Whole Foods which are coffee processing and seafood manufacturing.
Business Level strategy • The generic strategy that Whole Foods Market uses is Differentiation. • Differentiation - is a type of business level strategy working by Giving and providing Unique services and products by charging high premium price for it . • Whole Foods sells only Self-Placed Standardized High Quality Organic and Natural Products to Customers who are willing to pay the Premium price for it.
Business level Strategy Differentiation Strategy Product level : Natural, Healthy,Fresh and Organic • It is the first certified organic grocery store by US Department of Agriculture in USA • Having “365 Everyday Value” brand which gives high quality products and services with affordable price. Service Level : Excellent and Unique • The store is divided in to different departments with there own teams with one team leader and eleven employees , which take a special training about the department that they serve , which also includes in-store chefs.
Cont. • Also provide “take action food center” like • Wine testing • Diet plan • Food sampling • help with recipes.....e.t.c by this and other reasons Whole foods is known for it’s excellent customer service.
Business Level StrategyFunctional strategy • Whole foods is one of those companies who have strong work force and open organizational structure and culture which is the base for it’s superior efficiency which decrease the threat of rivalry among firms. • As it is said before Whole foods is a company which is based on having organic and high quality product. This can decrease the threat of substitutes and the threat of new entrants to the market
Structure and Control systemVertical Differentiation The hierarchy system and control. • Whole foods encourages a team based environments allowing each store to make independent decisions regarding it’s operation . • It have a very decentralized power and it is so easy to control because departments are classified by the department teams. • Teams contain eleven employees with one team leader . • The store manager is referred as the “Store team Leader”. • Each store employs any where form 72 to 391 team members.
Cont.Horizontal differentiation 1 . Function strategy • The function strategy of whole foods based on location. • The setup or the location that Whole Foods chooses is the place where most people are literate and top statically metropolitan areas. • The location is where they accept products and and resale them. • Whole Foods accepts products form national and local retailers to have more uniquely fresh organic products and can get discount from the supplier.
Cont.Horizontal Differentiation Product strategy The Product strategy that differentiate Whole Foods is the base for being unique and known. The product differentiation is made up on the base of being Organic and Natural products only . As it is stated in the Introduction Natural refer to food that is free form any growth hormone. Organic is as classified as the USDA defines it , as 95%of ingredient should be fulfilled.
Cont. • Managers are rewards in different kinds of rewards like EVA which is Economic Value Added bonus and is also eligible to receive stock option. • It is motivating enough to keep the employees work there. • The Company is using the right structure and control system. • This is why Whole Foods is listed on “100 Best companies to work for “ for 13 years in America by Fortune Magazine. • The Quality of products can be meet by other competors so it needs constant re-evaluation and change for better performance
Recommendation 1) Expand Service and Product to other countries. 2) Having Contract with different service providers to make some new changes. example service delivery. 3)Community outreach example more on the Green Movement. 4) Lowering Price 5)Increase Advertising
St. Mary’s University • Strategic Management Assignment About Case Study 2 Whole Foods Market prepared by 1. Betelhem Debru 2.Fiker Anteneh 3.Maedot Negussie 4. Mahlet Sentayew 5.Robel Girma
