Whole Foods Market, Inc.
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The SIC number for Whole Foods Market, Inc. is 5411, which implies grocery stores. The NAICS number for Whole Foods is 445110, which means supermarkets and other grocery (except convenience) stores. (Mergent Online) B. Mission Statement – Barbara Farfan who writes for about.com states, “The mission statement of the Whole Foods Company and Whole Foods Markets begins with its motto, which is “Whole Foods, Whole People, Whole Planet” The Whole Foods mission explains and defines what that motto means. This mission explanation includes…”Whole Foods – We obtain our products locally and from all over the world, often from small, uniquely dedicated food artisans. Whole People – We recruit the best people we can to become part of our team. We empower them to make their own decisions, creating a respectful workplace where people are treated fairly and are highly motivated to succeed. Whole Planet – We recognize the connection between our lives, our communities and the environment.””
Based on this mission statement provided by about.com, Whole Food’s mission does satisfy all the requirements of an ideal company mission statement. Whole Food’s mission statement identifies the company’s products. The mission statement specifies the customer’s needs that it seeks to satisfy. Their mission statement also gives Whole Foods their own unique identity. C. Enterprise Strategy – According to Whole Foods.com, Whole Foods has several local and global enterprise strategies. Locally all Whole Foods stores donate to area banks and shelters. Then several times a year the stores will hold a “5% day”, where 5% of all their net sales are donated to a local nonprofit or educational organization. Furthermore, on a global level, Whole Foods has several foundations that work towards poverty relief in developing countries. D. Corporate Level Strategy – While Whole Foods does not tend to be very public with their corporate level strategy, it appears that they strategically try to eliminate their competition and in turn increase their brand.
The website, Securityinfowatch.com has reported that the FTC has leaked the corporate strategy of Whole Foods. According to Securityinfowatch.com, Whole Foods has several current corporate strategies in use and many of these pertain to their competitor Wild Oats. Some of the strategies include; opening a Whole Foods store to cut revenue in a nearby Wild Oats store by 30% and buying and shutting down Wild Oats stores to increase revenue for Whole Foods by 85 to 90%. Furthermore, according to the FTC leak, Whole Foods has set ground rules that bar their suppliers from selling directly to Walmart, which in turn makes Walmart go through distributors and raise their prices. E. Business Level Strategy – The primary line of Whole Foods Market, Inc. is providing food products in a grocery store setting. Whole Foods competes within the supermarket/grocery store market by employing a niche differentiation strategy. They differentiate themselves by providing organic and natural products that are unique and valued to a certain market of people. However, due to their differentiation, they do tend to be higher in their price as compared to other supermarkets.
According to the Whole Foods website there are currently more than 360 Whole Foods placed in North American and the United Kingdom. In addition, Whole Foods now offers online ordering. Furthermore, Whole Foods promotes their image through health and fitness magazines, online ads and product samples that are displayed throughout the stores. Due to their natural and organic product mix, Whole Foods does tend to only target customers who are physically fit and who have active lifestyles. F. Functional Level Strategies – Whole Foods has several explicit functional level strategies that include; production, customer service, and sales and marketing. As stated by Wholefoods.com, “We seek to create transparency from “farm to fork” with respect to production, planning, sourcing, ingredients, product safety and efficacy in order to bring to market the safest highest quality products available. We work with our supplier partners in eliminating all unnecessary production and distribution costs to help ensure the best possible price.”
Whole Foods also believes that their customers are their most important stakeholders and that by firstly satisfying their customers; they can then satisfy the needs of their other stakeholders. Whole Foods intends to excite their customers by providing extraordinary customer service, educating their customers about natural and organic foods and provide inviting store environments. Additionally, Whole Foods uses their sales and marketing to grab the attention of their niche target market. Whole Foods specifically advertises in health and fitness magazine and places their billboards in strategic areas with a high traffic of fitness/healthy eating minded customers. G. Industry Analysis – The supermarket and grocery store industry is maintaining throughout the economic crisis that America is currently experiencing. As stated by the Market Report of “Grocery Stores”, “The industry fared well during the economic recession of the late 2000s, as more Americans chose to eat at home rather than go out.
During this time grocery stores focused on providing economical food choices for cash-strapped consumers.” However, as the economy continues to improve, more people may choose to eat out which could cause the industry to marginally suffer. Additionally, Supermarketnews.com states, “…the 75 largest food retailers in the United States had combined revenues of $893.1 billion in 2009. The 10 largest food retailers accounted for $613.2 billion of that total, or about 69 percent. This figure was up 7.5 percent from the previous year. The number-one food retailer was Wal-Mart, followed by Kroger, Costco, Supervalu, and Safeway.” However, there are some driving forces of changes that can affect this industry. This includes government regulations on food, environmental concerns such as droughts and flooding, the stability or instability of the economy, and mindset of consumers. H. SWOT –
i. Prior to Whole Foods, health food stores were small, expensive and did not carry a wide variety. Whole Foods changed this concept and became the founding firm of the industry. ii. Whole Foods has had 25 years of double digit revenue growth. iii. Whole Foods have a cool image and attract young, affluent shoppers iv. Whole Foods has a well-designed website that explains the company’s concept and provides the customer with blogs, recipes, sale items, online shopping and much more. b. Weaknesses –
i. The number of organic farmers is still growing slowly and therefore the organic food supply chain is underdeveloped. ii. Whole Foods tends to be more expensive than many other grocery stores and does not fit the needs of the majority of Americans. c. Opportunities –
i. More people are beginning to realize the importance of eating healthy and Whole Foods can provide the natural and organic food needed to live a healthier lifestyle. ii. Whole Foods has the opportunity to promote and build brand identity with organic foods and therefore when customers think “organic” they will think of Whole Foods.
d. Threats –
i. More supermarkets are beginning to pick up on the organic trend and that could increase competition for Whole Foods. ii. Due to the economic crises in America, more people want to save money and not spend extra for natural or organic products. I. Current Problem – The problem that Whole Foods is currently facing in their functional level is the high cost of their specialty natural and organic products. J. Solution – Due to the economic crisis, many Americans cannot afford to spend extra money for specialty products, such as those that are available at Whole Foods Market. There are several solutions for Whole Foods to put in place in order for them to cut back on the high price placed on their products.
One solution would be for Whole Foods to re-evaluate their suppliers and see who can offer them the same products at a lower cost. Although there are still not many organic farmers, the organic farming industry is slowly growing and competition among suppliers will increase. Another solution for Whole Foods to put in place would be for them to cut back on their advertising. While it is true that Whole Foods does not have a huge advertising campaign, they do tend to advertise in more high end places, magazines, etc. that will cost more than your average advertisement fees. With a change up in suppliers and/or a change in their advertising campaign, Whole Foods could save money and pass along those savings to their current and future shoppers.
“Consumer Trends.” Supermarket News Home Page. N.p., n.d. Web. 26 Feb. 2014. Farfan, Barbara. “Whole Foods Markets Mission Statement – Motto, Mission, Core Values & Standards.” About.com Retail Industry. Web. 21 Feb. 2014 “Grocery Stores.” Market Report. N.p., n.d. Web. 26 Feb. 2014. “We Serve and Support Our Local and Global Communities | Whole Foods Market.” Whole Foods Market. Web. 21 Feb. 2014. “Whole Foods Market, Inc.” Mergent Online. Web. 21 Feb. 2014.