Whole Foods Market provides a wide variety of products to customers since it carries organic and natural food. The company is the leading retailer of organic and natural foods across the globe with more than 170 stores in the United Kingdom and North America. As a firm that is uniquely mission driven, Whole Foods Market is very selective about the products it sells as well as remaining dedicated to strict quality standards and devoted to sustainable agriculture. Currently, the company owns and operates supermarkets and several subsidiaries through which it provides high-quality products to customers and high profits to investors. The success of Whole Foods Market in the retail grocery industry can also be attributed to the experience of its co-founder and president, John Mackey. However, despite of his three decades of experience and entrepreneurial history, Mackey is concerned about the future directions of the company though he has led the innovative business with increasing success.
Competitive Position of Whole Foods Market:
Whole Foods Market is one of the major players in the retail grocery industry that provides both organic and natural products. Since its inception in 1980, the company has continued to receive quick and wild acceptance by the community that has enabled it to grow rapidly. During this period, Whole Foods Market has grown through acquisitions and new store openings as well as expansion into Canada and across the country. The other reason attributed to the rapid growth of the firm is its increased focus on providing excellent customer service and giving back to the local and global community ("Whole Foods Market, Inc.," n.d.). While the company has one operating segment, its current market capitalization is approximately $8.72 billion.
In the retail grocery industry, Whole Foods Market faces competition from various grocery store chains like Supervalu, Safeway, and Kroger. The company also faces stiff competition from local natural foods stores like Vitamin Cottage and Trader Joes, and warehouse club membership stores like Costco. Safeway, Supervalu, and Kroger can be considered as the main competitors of Whole Foods Market since they are publically traded grocery stores. Notably, the retail grocery market or industry is dominated by a few main companies since many grocery stores are struggling to compete with the prices provided by superstores like Costco and Wal-Mart. Moreover, several grocery store retail chains have tried to introduce organic product lines of their own brands in attempts to compete with Whole Foods Market. These attempts by the grocery retail store chains have also been geared towards gaining the health-conscious market segment in the industry.
During the inception of Whole Foods Market, there was nearly no competition in the retail grocery industry since there was less than six other natural food chains in America. However, the organic food industry is currently growing to an extent that the company is increasingly finding it difficult to compete easily and maintain its influential presence. Despite of these difficulties in competition, Whole Foods Market is flourishing in the industry since it provides organic and natural foods that meet current demands of customers. The ability of the firm to meet current demands of customers is attributed to the fact that the population has become increasingly concerned regarding its eating habits.
Whole Foods Market is still the leading natural and organic foods chain across the globe because of the constantly increasing demand for organic and natural foods worldwide. The company has also maintained its dominance because it has continued to successfully acquire many small organic grocers. These successful attempts in acquisition of new and small organic grocery chains have enabled the firm to eliminate much competition.
Major Trends in the Grocery Industry:
The grocery industry has experienced numerous changes throughout its history because of various factors. Some of these major factors that have characterized the changing grocery industry include the shifting in population from rural to urban areas, increased mobility, and increase in disposable income. As a result of these changes, low prices and convenience have become the main dominant factors that drive customers to supermarkets and grocery stores. The industry is increasingly characterized by constant downward pressure on prices and low margins as evident through weekly specials, coupons, and rewards cards.
The grocery industry and Whole Foods Market are likely to be impacted by several major trends that have characterized the retail grocery market. Some of these major trends in the grocery industry include & #8230;
Entrance of New Competitors:
One of the major trends that is likely to impact the grocery industry and Whole Foods Market in the future in the entrance of new competitors in this market. Currently, this industry is characterized with the rapid spread of deep-discount food retailers and supercentres. The spread of the supercentres and deep-discount food retail chains changed the grocery industry that was previously dominated by supermarkets for several decades (Senauer & Seltzer, n.d.). The emerging new supercentres have contributed to the development of new food retail formats through which these stores provide general merchandise and a full-line of products.
The new food retail formats have in turn enhanced the competitive pressure or rivalry in the industry, especially on conventional supermarkets. Moreover, the growth of these supercentres has contributed to some form of consolidation in the retail food industry. Many small retail grocery stores have lost most sales to the new food retail formats, a trend that is likely to continue in the future.
Emergence of Substitute Products:
The other trend in this industry with potential impacts in the future is the rapid growth of private-label products by both supermarkets and other retail food stores, which is brought by buyer power and risk of substitute products. The private-label goods are being provided by store and label brands as one of the major elements of their merchandising strategy. The private-label products have continued to have significant impacts on the grocery industry since their share of total sales has increased rapidly among the American food retailers. As a result, many food retailers are increasingly adopting private-label product offerings. It's expected that the private-label offerings will dominate the grocery industry in the future because of their increase in share of total sales and the fact that many retailers have significant room to develop their private-label product offerings.
Strategy for WFM to Strengthen its Competitive Position:
In light of the current and future changes that the grocery industry experiences, Whole Foods Market should adopt better strategies to foster its competitive position in the retail grocery industry and market. The need for a suitable strategy would also enable the company to gain competitive advantages over its rivals, especially with the emergence of new food retail formats through the growth of supercentres and deep-discount retailers. Currently, Whole Foods Market has a high competitive strength while operating in a highly attractive industry.
In order to strengthen its competitive position in the industry, Whole Foods Market should increase its brand awareness, loyalty, and image through several forms of public relations initiatives and advertising (Meador et al., n.d.). Increased brand awareness, loyalty, and image will help to strengthen the firm's competitive position since it focuses on market penetration, which is an important aspect in enhancing a company's competitive position.
Whole Foods Market has mainly relied on word of mouth advertising and merchandising strategy to maintain its competitive position in the market. These strategies have mainly helped the firm to promote its product and achieve its current position in the grocery industry. However, the numerous changes in this industry necessitate the use of market penetration strategy and increased advertising will be helpful in strengthening the firm's competitive position. This strategy will help in strengthening the company's competitive position since it will generally increase sales of products to current and new customers.
Implementing the Strategy:
Due to the recent economic recession, increased competition, and difficulties from acquisitions, there is…