Whole Foods Market Strategic Management Case Study essay

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Whole Foods Market

The term whole food entails organic and natural food that gives customers opportunity to have ample range of products. Natural food refers to type of foods that are not having antibiotics or growth hormones. Organic are food that match to the standards that was defined in October 2002 by the U.S. Agriculture Department. Whole Foods Market became the leading retailer of organic and natural food in the world, having 172 stores within United Kingdom and North America. The recent President and cofounder of Whole Foods, John Mackey, establish the Safer Way natural grocery store in the year 1978. However the store did not have much success because it was a site which was small giving opportunity just for limited selection, restricted wholly on vegetation foods. Due to joint forces between Mark Skiles who was the founder of Clarksville Natural Grocery and Craig Weller, the whole food stores expanded and formed other subsidiaries.

Over the years, Whole Foods has expanded in different ways such as acquisition, merger as new store being opened. By now whole store market has become the largest natural food supermarket within the United States. Its expansion is more extensive within the western countries simply because it has large population and they hold a more complicated organic food. Even though Whole Food new that it was just a supermarket, they worked hard so that they could accomplish their vision in the industry context. Apart from being ahead by example, they also restricted themselves in managing their business in a way which was consistent with their vision as well as mission. This was done through participating in ethical business practices, providing least processed high quality food as well as offering a respectful environment of work and motivation, Whole Food (2004).

Best practices are being incorporated by Whole Food in every location back into the chain. This can be evident in the store product expansion of the company from dry goods to perishable products such as fish, prepared foods and fish. A lesson which was learnt within a given location was incorporated by all, making the chain to fully utilize efficiency and effectiveness while providing product line to the customers. Continually, Whole Food makes a customer to be better while offering catering to its location. Contrasting to the business models for traditional grocery stores, products of Whole Foods were dissimilar through regions of geo-graphic as well as specialties of local farms.

Employee and customer relation

A team-based environment is encouraged by Whole Food, giving opportunity for every store to decide independently on its operations. The composition of the teams is up to 11 employees having a team leader. The leaders of the teams were heading a given department. Every store employed everywhere starting 72 to 391 members of the team. The manger was known as the leader of the store team. The leader of the store team was being compensated through bonus of an Economic Added (EVA); in addition the leader is entitled to get stock options. There were trials by the Whole Food to implant a sense of purpose within its employees and it was ranked among the 100 best companies to work for in America. According to the survey to their employees, 90% from its team members indicated that they usually enjoying their jobs. Identifying that the customers were the lifeblood of this business, the company struggled to take care of their customers; therefore the two parties were independent on one another. The aim of the company proved to be more than 100% to the satisfaction of the customers having the goal of delighting customers in all interactions Jeane Lang Jones (2004).

Competitive environment

In 2004 shoppers in America spent about $45.8 billion on organic and natural products; this was revealed by research published in the 24th Annual Market Overview about the subject of "Natural Food Merchandiser in June. Within the year of 2004, the sales of natural products went up by 6.9% transversely for every sale. During the time of inception of Whole Food in United States, minimal competition existed with less than six other undersized natural food characteristics. Afterward, the industry of organic food was on the rise, making Whole Food getting itself at the competition level to retain its elite presence. While the population increasingly became worried of their eating habits, store for natural food were flourishing like Whole Food.

Trader Joe's which was formerly called Pronto Markets was formed in Los Angeles by Joe Coulombe in 1958. Due to its expansion of its offering of products and its presence at the same time retaining low prices with high quality, the company had caught up with its competitive nicho. This company has stores that add up to 215, majorly towards the East and West Coast of the United States. This company is involved in upscale grocery fare like prepared meal, heath food, nutritional supplement and organic produce. The structure of low cost make it possible for Trader Joe's to provide prices which are competitive at the same time retaining its margins. There was no service department in Trader Joe stores and its size of the store averaged only 10,000 square feet. The company enjoyed in 2003 sales of $2.5 million, which was a 13.6% rise from 2002.

In1987 Wild Oats was formed, in Boulder, Colorado. The people involved in forming it did not have natural foods market experience, there they depended on their employees so that they could know more about the industry. There was dedication of Wild Oats in streamlining and strengthening its operations in order to build the company. The range of products that it was offering was from organic food to traditional grocery merchandise. A public owned company, Wild Oats, on NASDAQ, was being traded under the OATS ticker symbol and based on sale in United Sale; it was the third largest natural food supermarket chain. Even though, it remain behind Trader's Joe as well as Whole Foods, in 2004, it enjoyed $1,o48,164, which was 75% rise over 2003. The operation of Wild Oats is of 100% full service stores within 24 states as well as Canada, Wild Oars Market,(2004).

Aging that took place to Baby generation was to widen the senior demographic for the coming decades while their generation grew up leaving the nest. Singles in urban centers were the other group that was having additional income which is disposable due to not having dependants. Such group showed a chance for growth for Whole Foods. Of the total expenditure of food, America spent 7.2% in 2001, leading it to be the seventh highest class on which consumer spent their income. In addition, household in U.S. getting income of over $100,000 per month symbolizes 22% of the aggregate income than 18% earlier decade. Shift in demographic, lead to an enlargement within the luxury store group. Towards the end, there was a space within the supermarket retail involving a low cost shopper consumer and the ones that could do so.

More competition had increased from Grocery stores, for example, Stop' N. Shop and Shaw's that started to bring in sections of natural foods within their conventional stores, put them to be in a direct competition with Whole Foods. Since bigger grocery chain was having higher flexibility in the provision of their products, they had the opportunity to promote products by sales, which was a strategy that was hardly practiced by Whole Foods.

In spite of Whole Food being in the industry with high competition, it retains its reputation in the natural food chain world. With the continue rise in the need for organic and natural food, pressure increased to the suppliers. There was limited output in U.S. because of only 3% of farmland was organic. Since there is increase need of such product, prices might elevate which will cause goods…[continue]

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