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Whole Foods Market Case Study

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Updated: Jun 11th, 2019

Whole Foods Market is a large American food supermarket headquartered in Austin, Texas. The firm has global market coverage, with its presence heavily felt in the American and European markets. Founded by John Mackey and Rene Lawson in 1978, this firm has grown massively over the years through mergers and acquisitions. Currently, the firm is considered as one of the leading supermarkets in the United States.

The firm has been keen on selling organic products in its stores. The US Environmental Protection Agency ranked Whole Foods Market as the fourth best firm in the list of Top Green Power Partners in the United States (Coulter, 2009).

The focus of the firm to protect the environment and provide healthy natural foods in its store is tied to its vision of being the leading provider of healthy foods in the world. The management of this firm has been keen on developing strategies for this firm in line with its mission which stipulates how this firm will continuously offer natural organic foods to its customers.

An analysis of this firm reveals the fact that it has had an upward trend in the market share within the United States and European market. This has been so because the vision of the firm has been kept clear. This may be attributed to the fact that the founder is still the chief executive officer of the firm. He has ensured that the firm remains focused on the ideas that were originally developed when the firm was stated.

This has helped in giving this firm an identity. Another factor that could have propelled this growth is the focused and well motivated employees at various stores of this firm. The management of this firm has succeeded in creating an organizational culture that is unique to this firm. Employees of Whole Foods Market always have a near uniform code of conduct when addressing the market issues.

The way a customer in its Austin Branch is treated will be the same way a customer in Boston will be treated. The design of their stores is also the same irrespective of the location or the size of that store. This way, they have created an environment of familiarity with the customers.

A customer in Texas will walk into Whole Foods Market store in London and be familiar with the store on his or her first visit because of the familiarity of the design and of the attendants. The firm has maintained a policy of always having a satisfied customer in the market. This has earned it success not only in the American markets, but also in the markets that it entered recently in Europe.

This industry has become very competitive, as new firms come into the market with products that already exist. The competition has become very stiff given the fact that it has ventured into the global market. This firm will now face global issues that will require proper strategies to overcome.

The competitive environment can only be managed by developing competitive marketing strategies that would help the firm remain sustainable in the market. Given that this firm is currently trading on New York Stock Exchange, investors are very keen on monitoring the returns from their investments.

As Daft (2009) says, a firm should always be responsible to its investors by giving out regular returns that is within their expectations. This can only be achieved if the firm is profitable. The operations of the firm must be sustainable for the investors to consider their investments sustainable within the firm. This is what the management unit of Whole Foods Market has been keen on.

In an effort to achieve its set goals and objectives, there are some opportunities and threats that this firm faces. In order to tap on the opportunities and manage the threats, this firm would need to maximize on its strength, while working on its weaknesses.

The following SWOT analysis would therefore be important in analyzing this firm. SWOT analysis is one of the important tools that are very popular in analyzing a company. It helps in analyzing firms based on the existing internal and external factors. SWOT analysis would be very valuable in analyzing Whole Foods Market.

Strength of this firm that would translate to increased profitability is a positive image in the market due to its environmental friendly projects. The main strength of this firm is laid on four pillars (Hooley, 2008). This firm has been identified as one of the few American firms that are keen on protecting the environment.

The management of this firm has been keen on rolling out several corporate social responsibilities geared towards protection of the environment. The products that this firm delivers to the market are also known to be of the right quality. For a long time, Whole Foods Market had been one of the few retail stores that avoided stocking genetically modified foods.

This was because of the health controversies that came with this type of food. However, part of the society has come to embrace genetically modified foods. As such, this firm has started stocking the genetically modified foods, but with clear labels that identify these type of foods in its stores. This has made this firm be considered as being responsible to its consumers.

For this reason, customers prefer visiting its stores for they are assured of the quality of the product. The good relations between the management and employees have also been considered as strength because it has enabled this firm achieve its plans within the desired time. The team of motivated employees has been pivotal in making this firm realize its goals, a fact that has seen the firm open new stores in overseas markets.

Despite the above strengths, this firm has some weakness. The first weakness that this firm has is the controversies that this firm faced in the recent past. One such controversy was the article that the founder and the current chief executive officer wrote on the Wall Street Journal regarding the Healthcare Bill 2010. The founder of this firm openly criticized this Bill, raising question as to the real vision of this firm.

The Bill was widely believed to be geared towards providing a universal healthcare to everyone, irrespective of the financial capacity, which to many, is in line with the vision of this firm. However, the statements of its chief executive officer raised some question. The firm has also portrayed its weakness by failure to label the genetically modified foods in some of the states within this country.

It is true that some states have legalized the use of genetically modified foods. However, this may not mean that every single individual in that particular country approves of such foods (Spulber, 2007). It was expected that as a champion of positive health, it would label the genetically modified foods as a way of protecting the public.

The firm has a number of opportunities in the external environment. In the local market in the United States and other European countries, this firm has managed to build a large base of loyal customers. The governments of the United States and other European countries have strongly appreciated the move of this firm to help improve the environment of these countries, a fact that has earned it a large base of customers.

The United States government, and other governments where this firm operates, has maintained a very stable political environment. This means that the business environment is free from any political unrest that may disrupt normal business operations within the market. This has created a business environment that is very peaceful to various firms in the country.

The firm also enjoys an economic growth in this region that has increased the purchasing power of the consumers. This increased purchasing power has helped the firm to increase its operations to regions beyond the borders of its parent country.

The emerging technologies have also helped Whole Foods Market in its operational strategies. The firm has adopted the emerging technologies in its operations, a fact that has helped it increase its efficiency.

This firm faces a number of threats in its operations. Threats may not be predictable in this industry, although the firm may try to reduce the possibility of occurrence (Kratschmer, 2011). The first threat that this firm faces is price wars in the market. There has been a massive competition from other competing stores both in the local and global market. There are times when the competitors consider incorporating price wars.

Price wars are always very destructive in the market. It has the effect of reducing the profitability of the firm as the profit margins are lowered. Another threat comes from the laws that have acted as bottlenecks in the operations of this firm in the overseas market.

Although the firm has received maximum support from the United States government in its operations, there are cases where the policies developed by overseas governments favor competitors of this firm. However, the management of this firm has been able to eliminate most of these threats, making this firm successful in the global market.

Given the current operational capacity of Whole Foods Market, it is highly recommended that ABC Company should enter into a partnership with Whole Foods Market. The firm is operating optimally, and at a desirable profit. When integrating Whole Foods Markets into its system, it is recommended that ABC Company should let Whole Foods Market operate semi-autonomously.

The strategies that this firm has developed in the market are very effective. These strategies have not only enabled this firm acquire new markets overseas, but also create a strong brand for this firm. Whole Foods Market is known as one of the leading firms in fighting environmental pollution.

The public is currently very sensitive on environmental issues, and any firm that is seen to protect the environment is always favored over others. ABC Company should take advantage of this and share this good name with Whole Foods Market.

References

Coulter, M. (2009). Strategic Management in Action. New York: Pearson Higher Education.

Daft, R. (2009). Organization Theory and Design. New York: Cengage Learning.

Hooley, G. (2008). Marketing Strategy and Competitive Positioning. Harlow: FT Prentice Hall.

Kratschmer, P. (2011). Organizational Culture is Highly Resistant to Change. New York: GRIN Verlag.

Spulber, D. (2007). Global Competitive Strategy, Cambridge: Cambridge University Press.

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IvyPanda. "Whole Foods Market." June 11, 2019. https://ivypanda.com/essays/whole-foods-market-2/.

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IvyPanda. 2019. "Whole Foods Market." June 11, 2019. https://ivypanda.com/essays/whole-foods-market-2/.

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IvyPanda. (2019) 'Whole Foods Market'. 11 June.

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