Whole Foods was established in 1980 after the merger between Safeway store and Clarksville Natural Grocery. The company’s expansion strategy began in 1984 when it started acquiring other existing food chains.
In 2004, the company managed to enter the United Kingdom market and consequently acquired quite a good number of food chains. Before the close of 2008, Whole Foods established more food chains although some of them were closed down after a short duration. It is worth to mention that Whole Foods is one the leading organic and natural foods supermarkets across the globe.
The high performance level of the company is linked to the company’s mission statement which entails the provision of products that enhance the overall wellbeing and vitality of its customers. The latter has been attained by ensuring that customers are supplied with the highest quality products. The aspiration of the company is to achieve international recognition by producing unique organic and natural foods and also increasing its retail outlets.
The company’s expansion strategy
The expansion strategy of the company focuses on increasing supply in order to help the company meet the growing demand for both the natural and organic foods. The increasing demand is attributed to the entry of new buyers in the marketplace. In order to achieve the desired level of expansion, the company has continued to invest substantial level of resources in different areas especially in political reforms. This is due to the current regulations from the government that restricts the quantity of organic farming.
Moreover, the level of research and development that focuses on the production of staple organic products has also been intensified. The company also puts a lot of emphasis on the placement as an expansion technique. Whole Foods targets customers with income levels that are above average and also ensures that its stores are placed in areas where almost half the residents have at least some college education. The company believes that such a population is in a vantage position to support healthy, environmental, and nutritional values.
The current number of distribution stores and retails outlets is an indication that the company is performing considerably well in its operations. In order for the company to achieve the desired growth levels, there is great need to continue investing in both sales and financial research. This is based on the fact that any given company should not merely focus on education level and income when expanding its operations.
Whole Food’s key strength or weakness, opportunity or threat, that justifies why the expansion strategy should be continued
A major strength lies in the company’s ability to provide quality and high standard products. Customers who purchase natural and organic foods from the company are guaranteed high levels of satisfaction. In addition, the company enjoys a strong company management equipped with economic value and improved systems for providing employees with incentives. These strengths are very helpful to the company as it undertakes its expansion strategy.
Giving incentives to employees serves as one way of motivating them since it increases their participation in expanding the company’s operations. However, it is vital to note that the company’s effort to expand is likely to be hindered due to the high prices charged on some of the products. In order to overcome this weakness, the management should explain why some of the products are more expensive than others. This will make customers to remain loyal to the company.
The expansion of Whole Foods is also justified based due to the fact that the company has a very attractive market share and also holds a strong position within the targeted market. This implies that it is capable of realizing a more profitable and stronger position by expanding to new markets. The company’s key opportunities include increased recognition within the organic or health food industry, and brand image enhancement within the surrounding community.
By continuing the expansion strategy, Whole Foods can increase the level of its sales and increase demand for its products by attracting new customers. In addition, the company finds it easy to promote the organic foods while enhancing the brand loyalty and image. It is highly likely that Whole Foods will continue to expand in other areas and consequently increase its profitability and market share.
On the other hand, Whole Foods faces key threats such as increased supply of organic food substitutes from the local grocers and high prices on some of the company’s products. This means that it is necessary for the company to come up with appropriate strategies that may help it to retain its current customers and attract new ones. By so doing, it will be possible for the company to continue with its expansion programs.
In my view, I believe that Whole Foods is justified to continue with its current expansion strategy since it enjoys significant strengths and opportunities that give it a competitive power over other players in the same industry. However, the company should address the key weaknesses and threats that are likely to affect its expansion strategy. For instance, Whole Foods can gain significantly by reducing the price of some of its products alongside improving quality. This prevents customers from shifting their interests to other competitors.