Business Analysis: Whole Foods Market

The organic food industry has seen a huge spike in growth that is expected to continue into the future due to an increase in consumption. This will provide Whole Foods Market with huge opportunities. In addition, a wave of ethical and responsible consumption has swept across America. Whole Foods’ decision to pursue sustainable activities will certainly give consumers an added incentive to purchase its organic products.

Whole Foods Market is one of the biggest organic and natural whole food suppliers in the world. They provide a wide variety of select foods that are without hormones or antibiotics and are stamped with the U.S. Department of Agriculture’s stamp of approval. They value the fact that they can provide people with access to healthy food and be identified with being socially and environmentally responsible.

Whole Foods is a retailer that specializes in organic foods and it has done an excellent job of determining its target market and how to position itself. Instead of going head to head with large food retailers such as Wal-Mart, Whole Foods has found a niche market that works perfectly for itself. This niche market is one that prides itself on being health conscious and environmentally responsible and Whole Foods has done a great job of positioning itself in the same way through its environmentally safe actions and its use of the local community to stock its stores. However, as Whole Foods grows and expands, a person has to wonder if the company will be able to maintain this same position or will have to make

Whole Foods, just like any other retailer right now, has been struggling with the economy. The external environment has been changing in uphill and downhill motions daily, something that Whole Foods has never experienced before. Not only is there pressure on the financials of the corporation, but also there is the pressure to go green.

As with other superstores, Whole Foods offers a variety of products to their customers. These products include organic and natural foods of all sorts, body care items, and household care items (“Grocery”, n.d.). As with other grocery stores, these products are organized based on the category they fall into, as well as if they fit a certain dietary requirement (e.g. dairy, meat, cleaning products, vegan, gluten-free, etc.). The output efficiency is measured as with most companies by the profit brought in by each division. This past year (2013), sales improved to $1.29B from $1.17B in 2012, net profit improved from $466K to $551K with the net profit ratio improving from 3.98% to 4.26% (Yahoo! Finance, 2014). Additionally, Whole Foods’ return on assets improved to 4.26% from 3.98% in 2012 (Yahoo! Finance, 2014). All of these numbers show that Whole Foods is capitalizing on its momentum and continuing the success they’ve had in previous years. Another performance

Many Americans today are making the decision to eat and buy organic products and food. Organic food are grown without the use of pesticides or chemicals and do not contain additives, pesticides, pesticides, antibiotics or hormones. The fruits and vegetables are fresher healthier and contain fundamental minerals that are prone to reduce heart disease, osteoporosis and other health issues. As a result, it can have a grave impact on your mental and emotional health as well as the environment. Due to these factors, John Mackey’s, CEO of Whole Foods is dedicated to promote the vitality and well being of all individuals by supplying the highest quality, of wholesome foods available, flavorful, least processed where customers can shop in an enjoyable

Whole Foods has been adaptive in fitting its competitive strategy to its situation. The store first grew to prominence by being a stylish antithesis to the crunchy mom-and-pop organic grocery stores, providing a relatively normal but

From the pitfall that I have found, there are several things that Whole Foods Market needs to improve, which are organic foods and green suppliers. Start with organic foods; although Whole Foods Market faces with high competitive in the market, they cannot avoid or pay less attention on their practice or commitment. The company should encourage more and provide a supportive education on green practice and sustainable agriculture to not only organic farmers but also conventional farmers by showing them benefits of doing sustainable agriculture. The second thing is a green supplier that the company gives the commitment with customers. The company needs to pay more responsibility

Successful expansion into new markets continues to strengthen the brand. The openings of store fronts in Canada and the United Kingdom bring the total international store count to 19 as of October 2015 (Whole Foods, 2015). Branching into international territories offers increased brand recognition and awareness. Providing localized offerings and increasing awareness of “natural products” creates brand attention in geographic markets that were previously untouched. This raises brand exposure and identification which greatly increases the potential for market gains. Opening operations creates diversification of business risk to a small degree. The stores in Canada and the U.K. may not be as susceptible to economic issues that may arise in the United States, thus offering some organizational financial buffering in time of economical uncertainty.

In 2015 Whole Foods has just launched its very first national advertising campaign called “ Value Matter.” It is a series of advertising with the theme “Values Matter” on any social media or television. The company’s largest-ever advertising investment around $20 million somewhat has increased the value of company brand image and fight back the aggressive from their competitors such as Walmart and Costco.

Marketed as ‘America’s healthiest grocery store’ the company has successfully grown to 408 stores across the world with sales of $14 billion in 2014 (Whole Foods Market, 2015). The firm is positioned as an upmarket grocery due to the emphasis on natural, organic origins, and as a result are able to charge a premium for their products. Through efficiently running its operations and stores, Whole Foods are able to maintain healthy 4.02% profit margins (Financial Times, 2015) and operating margins well above the American grocery store industry average at 6.58% (Bloomberg, 2015). Looking at 2015’s quarter 1 figures it is clear to see that Whole Foods have had a hugely successful year with sales of $4.7 billion, up 10% from the same period last year. Furthermore, they opened 9 new stores and have signed a further 11 new leases.

It is observed that Whole Foods Market is correlated with sustainable-led marketing strategies (Martin, Diane, and John Schouten, 2012). It is assumed that when sustainable products escape the market niche, the size of the Whole Foods Market is less important thus serves as a driver towards sustainable-led marketing. It is thus concluded that sustainability is reasonable if the structure of Whole Foods Market companies is borne in mind

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

Whole Foods Market began in 1970 as a local supermarket. Over the past 31 years, Whole Foods Market has grown from a single store in Austin, Texas, to becoming one of the worldwide leaders in providing consumers with natural and organic foods. They have grown to over 300 stores in both North America and the United Kingdom. (Whole Foods Market, Inc., 2011) This report examines the chief elements of the strategy that Whole Foods Market has put into place. Also, it uses past financial data to provide an assessment of the condition of the company going forward. Those assessments include recommendations of future actions, along with concerns I have about the way the company is currently operating and some difficulties that may be on the way.

There are also technological and ecological factors. Thompson makes it clear that Whole Foods Market must work to keep up with the advancements in technology that are rapidly cropping up in the food production industry. They’ve done well to adopt green energy, but Thompson believes they must do more to build more automated services for inventory and delivery, cutting down on certain types of manual labor jobs and creating more tech-based jobs, and ultimately leading to improved reliability and efficiency of their company as a whole. The main ecological factor that impacts Whole Foods Market is climate change. Climate change has the potential