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Whole Foods Market Strategic Management

Essay by   •  November 29, 2012  •  Case Study  •  627 Words (3 Pages)  •  1,457 Views

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Whole Foods Market sells high quality natural and organic food and nonfood items(for example floral and household products ). Also offers exotics like seafood. One more important thing is emphasis on perishables (meat, bakery goods, fruits and vegetables).

General environment segments: demographic, global, technological, economic, political, and sociocultural. As my point of view, there are three which relevant to Whole Foods Market: political (because all products have to pass FDA approval. it is industry where all compete for attention, resources and voice in overseeing the body of laws and regulations guiding the interactions. WFM created their own processing foods policies understanding that government regulations will be always followed thoroughly), demographic (because of the big population changes. The healthy movement across the U.S. to promote a healthy lifestyle in adults, but especially in children has helped attract many consumers over to Whole Foods) and sociocultural (because it relates to concern for the environment and also it concerned with a society's attitudes and cultural values. Whole Foods is interrelated with the consumers' feelings on organic food and so understanding their views helps them create new strategies for future prosperity)

It's organic industry. Dominant characteristic of this industry is consumers are always concerned about their health and will continue buying organic food.

It's quite attractive industry (under Porter 5): threat of new entrants is low, because conventional retailers, different independents and Whole Foods Market are already in this industry. Bargaining power of buyers is low as well. Bargaining power of suppliers is heating up because very small in percentage of farmland is used for natural/organically grown foods and not only Whole Foods have to compete with the conventional retailers. Threat of substitute products - buyers can easily switch to the conventional retailers, but is to their advantage (cost, convenience, similar quality, one-stop shopping) as "specialty stores" are being built right in to the conventional retailers. Competitive rivalry: if conventional retailers are committed to winning market share, Whole Foods will face extreme competition, more than it is experiencing now. Buying up competitors on their level may make some sense, but the capital outlay and assumption of debt puts them in a bad position to deal with the supermarkets etc... Their business strategy is very lofty and growth-oriented but they may be best to concentrate on their niche.

WFM's success factors: highest quality brand reputation and customer service, effective marketing communications and strong network of suppliers, and of course, private label program and appeals to a greater social responsibility.

o Brand values - natural and organic food

o Source

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