Whole Foods Market in 2008

WHOLE FOODS MARKET IN 2008: VISION ,CORE VALUES AND STRATEGY

Whole Foods, Whole people,

Whole Planet

WHOLE FOODS MARKET IN 2008: VISION, CORE VALUES AND STRATEGY

WHOLE FOOD INCEPTION WHOLE FOOD VISION, MISSION & CORE VALUES, WHOLE

FOOD MOTTO PRESENT SCENARIO OF WHOLE FOOD SINCE INCEPTION WHOLE FOODS SWOT ANALYSIS STRATEGIC COMPETENCE FINANCIAL ANALYSIS ASSOCIATED DILEMMA RECOMMENDATION

Whole Foods, Whole people, Whole Planet



Began in 1980, in Austin, Texas Evolved from a local supermarket Leader in organic and naturally produced goods John Mackey, CEO



VISION TO BECOME AN INTERNATIONAL BRAND

SYNONYMOUS NOT JUST WITH NATURAL AND

ORGANIZ FOODS BUT ALSO WITH BEING THE BEST

FOOD RETAILER IN EVERY COMMUNITY IN WHICH

WHOLE FOODS STORE WERE LOCATED

MISSION HIGHLY SELECTIVE ABOUT WHAT WE SELL,

DEDICATED TO OUR CORE VALUES AND STRINGENT

QUALITY STANDARDS AND COMMITTED TO

SUSTAINABLE AGRICULTURE



MOTTO WHOLE FOODS, WHOLE PEOPLE, WHOLE PLANET

CORE VALUES SELLING THE HIGHEST QUALITY NATURAL

AND ORGANIC PRODUCTS

SATISFYING AND DELIGHTIING OUR CUSTOMERS

TEAM MEMEBERS HAPPINESS AND EXCELLENCE

CREATING WEALTH THROUGH PROFITS AND GROWTH

CARING ABOUT OUR COMMUNITIES & OUR ENVIRONMENT



OBJECTIVE TO HAVE 400 STORES AND SALES OF $ 12 BILLION

IN FISCAL YEAR 2010


Leading Super

Store in USA for

organic foods and

produce

30,000 natural,

organic and

gourmet food

products and

nonfood items

Total 276 stores in

2007

Sales of $ 6.6

Billion in fiscal

year 2007

Constant Growth

of 7 -9 % since

2000 yr

10 company

acquisition till

2007

9,321,107 sqft

all together

stores in 2007


STRENGTH

Product varieties Higher Capital Companys brand image and cause of its existence Higher number of stores Higher quality goods, environment Highly skilled and efficient employees Lower employee dispute Bigger and better stores Stores allocations based on the need and demand analysis within USA Superior quality suppliers and providers Noble CSR activities Positive word of mouth marketing Excellent customer service with attractive compensation package for employees


Weakness

Price of the organic and natural goods (High Price) Limited numbers of suppliers Niche oriented target audience Mackeys controversial blog comments regarding wild oats before acquisition Lower sales volume in 2007 Declining sales and stagnant cost of production Only 5% invest from revenue in advertisement.


Opportunities

Venturing into new markets (Asia, Europe etc) Separate price segments for more aware customers who are under lower paycheck Increasing the number of suppliers for organic produce Acquisition of Trader Joe's for minimizing competition Increasing advertisement cost and increasing visibility of whole foods


Threats

Lower number of suppliers Lower cost organic goods provided by other stores Only selective market niche orientation New entrants threat Suppliers have higher bargaining power than buyers

Component Description

Demographics Income across the population, and trends in the demography

Social forces Attitudes,lifestyles

Political, legal,

and regulatory

factors

Political policies and processes, as well as the regulations and laws with which

companies comply.

Natural

environment

Ecological and environmental forces such as weather, climate, eco friendly

produce .

Technological

factors

The pace of technological change and technical developments that have the

potential for wide-ranging effects environment, such as clean energy, solar

power, organic production process, lower CFT etc.

The Five-Forces Model of Competition: A Key Analytical Tool

Threat of

substitute product STRONG

Power of Supplier STRONG

Power of Buyer WEAK

Competitive Rivalry STRONG

New Entrants STRONG

STRATEGIC LEAPS OF WHOLE FOOD

STRATEGY 1 A WHOLE SOME VISION , MISSION, OBJECTIVE AND VALUE PROPOSITION STRATEGY 2 USDA LAW BASED PRODUCT DIFFERENTIATION AND OFFERING AFTER THE STORES INCEPTION STRATEGY 3 ACQUISITION OF MULTIPLE STORES SINCE 1990S AND EXPANSION STRATEGY 4 FOCUSED DIFFERENTIATION STRATEGY


STRATEGIC LEAPS OF WHOLE FOOD STRATEGY 5 ESTABLISHMENT OF NEW DISTRIBUTION STORES FOR REDUCING OPERATING COST STRATEGY 6 INNOVATIVE AND PROACTIVE CUSTOMER SERVICE STRATEGY 7 EVA BASED PERFORMANCE MANAGEMENT STRATEGY 8 HIGHER CSR INVESTMENT AND SOCIAL CITIZENSHIP


Financial Analysis

34.84%

4.51%

2.77%

12.52%

$1.30

5.81%

Financial Analysis

.85 times

.48

-116528

Financial Analysis

55%

40%

1.2 times

0.66 times

70.68 times

Financial Analysis

25 days

15 times

6 days

Comparison with others years:

Activity Ratio:

STRATEGIC DILEMMAS Whole Foods, Whole people, Whole Planet

High Price

Niche Market orientation

Less investment in advertising

Ambitious projections

No Product Segmentation

Increasing new entrant threats

Lower Supplier Number

FINANCIAL DILEMMAS Whole Foods, Whole people, Whole Planet

Lower GPM

Lower EPS than 2006

Lower NPM

Higher DOI

RECOMMENDATION- STRATEGIC DILEMMAS Whole Foods, Whole people, Whole Planet 1.Reduce cost of production and acquisition by establishing more distribution points

and removing third parties

2. Offering newly structured priced products for new customer segment who do not

have higher paycheck

3.To build more awareness one must invest in advertising to provoke new customers

to at least visit the store once.

4.In 2008, the ambitious store acquisition needs to be considered as the

operational cost needs to be maintained.

5. They can diversify by introducing a chain of herbal medicine.

6. Acquisition of trader Joes and fresh market food chain to eliminate potential

threat

7. Increasing supplier in numbers by investing on them and creating more scope of

buying products.

RECOMMENDATION- FINANCIAL DILEMMAS Whole Foods, Whole people, Whole Planet 1. Increasing Sales , through EVA program for employees and maintaining lower

operational cost.

2. Operating income is very low, so they need to reduce overhead costs.

3. EPS is low compared to 2006, $1.42 need to increase it thorough increasing

profits by accelerating sales.

4. Days of inventory is higher , which is very poor for perishable items found in

whole food superstore. In order to reduce this figure the products needs to be

increased efficiency of value chain.

5. Working capital is negative so they need to invest more in cash, reduce

inventory cost.

Whole Foods Market in 2008

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