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Mgt 4033 - Final Project: Whole Foods Market

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Final Project: Whole Foods Market

Dyveli Y. Flores

Southwest University

MGT 4033

Mr. Jose R. Santos

  1. Introduction:

      Whole Foods Market became the world’s largest retail chain of natural and organic foods supermarket by 2006.  It is the worlds leading natural and organic food retailed with 193 stores open. John Mackey, Renee Lawson Hardy, Mark Skiles and Craig Weller founded the organization on September 20, 1980. The company’s rapid growth and success is strongly based on their dedicated high-quality and minimally processed food, respectful and motivational work environment and engagement in ethical business practices. Whole Foods is highly selective about their products as they dedicate to stern quality standards and are committed to sustainable agriculture. To “promote vitality and well- being for all individuals by offering the highest quality, least process, most flavorful natural and naturally preserved food available” Whole Foods stated to be their mission statement. Management is in constant battle towards fulfilling their vision within the environment of the industry. They strive to conduct business in a consistent manner with their mission and vision.   Whole foods has been named one of the “100 Best Companies to Work For’ in America Fortune Magazine for 13 sequential years. Although Whole foods spends much less than other supermarkets on advertising, it has gained much recognition through its multiple charitable contributions and the involvement they have in the awareness of animal treatment.  As the years have passed, the sales of organic foods has boosted; finishing with 11% increase in sales in 2016 from the previous year, Whole Foods is very much aware that the market is becoming very competitive.



  1. Analysis

 Board of directors for whole food market consists of 12 highly qualified individuals.  Ken Hicks who was the former chairman and CEO, Mary Ellen Coe has taken over the role of Vice President as of 2016, Shahdid Hassan knows as the general partner, Stephanie Kugelman whom is the Principle and second opinion, John Mackey the CEO and Co- founder, Joe Mansueto founder and Executive chair man and Sharon McCollam who was the former chief financial officer. Next is Scott Powers who was the former president and CEO, director Walter Robb, Co-founder, executive chairman CEO and president Ron Shaich, Senior Partner Jonathan A Seifffer and lastly, partner Gabrielle Sulzberger.

III. EFAS, SWOT:
    The organic food market is very attractive and continuing to increase. Whole foods hold a very strong position in the market and could potentially position themselves in a stronger and more profitable position. Health and organic foods have become much more popular and show no signs of decrease in demand. The process by which organic foods are made will slowly become less expensive as new technologies and ongoing knowledge of the industry grow. Opening new stores demands the company to adapt its distribution network, information management, supply, and inventory management and be able to adequately supply the new stores in a timely manner without impacting the supply of existing stores. When locations are primarily considered to open up, they focus in finding locations in larger cities and with and heavy “foot traffic”.  Whole foods has a particular method when choosing stores sites which is based on several metrics that include income levels, education, and population destiny.

IV. EFAS, OPPURTINITIES AND THREATS:

Whole Foods Market has a global hierarchy in its organization. This hierarchy consists of four main tiers; global headquarters, regional offices, facilities and stores. This aspect of the company is structured under vertical lines of authority, commands and communication. This organizational structure supports corporate monitoring and control over the entire enterprise. Its organizational culture is an important aspect in the companies success. Co-CEO John Mackey has stressed its organizational culture as a foundation for the company’s growth and strength. Whole foods attempts to sell customers a well rounded experience. The stores provide in-store chefs, wine tasting and food sampling. Some stores even offer extra services such as cooking classes, massages, valet parking and home delivery. In 2016 sales were at 88 billion   Stock price according to CNN financial is at 41.78% and has increased by 24.20% from 2016.

V. Analysis of strategic Factors

A. One of the many Whole Food’s strengths is their passion for high quality products. Whole Foods guarantees 100 percent satisfaction on all items that are being purchased. Another strength is that the company has a competitive advantage when it comes to the size of their stores. They stores have customized layouts to try to fit the particular site and building in order to show off particular products for their targets customers in that area. Whole foods also offer a system worked for team members when decisions are being made that create a sustainable shareholder value.

Complete the IFAS matrix

Internal Strategic Factors

Weight

Rating

Weighted score

Strengths

Passion for high quality products.

0.40

4

1.6

Large size stores.

0.10

2

0.2

Customized facilities.

0.20

3

0.6

Weaknesses

High prices

0.20

-3

-0.6

Large store size.

0.10

-2

-0.2

Total

1.0

1.6

B. External Opportunities and Threats

The organic food market has only become more attractive and continues to increase its attractiveness. The market has very strong position and could potentially position themselves in a even stronger and more profitable position. Organic and health foods are only becoming more popular and will eventually become less expensive as new technologies and continuing knowledge of the industry grow. A few of the key opportunities for whole foods consist of growth through acquisition, enhancing the brand image through community service and increasing attractiveness of the health and organic food industry. When promoting organic foods, whole foods may increase sales and attract new customers by presenting them to the whole foods experience; this would not only promote the company, but the industry as well. The company would enhance their brand image and loyalty by continuing their community service efforts by promoting organic foods. Some key threats the company faces consist of local grocers increasing their organic food options, price of organic foods and the size of the store discouraging customers.  If a customer would like to buy organic foods at a smaller, easier to get to grocery store, they may eventually switch. This is why the size of Whole foods stores may be threat to themselves. Some customers prefer a store where they can go in a out in a matter of ten minutes; if they continue to buy a build larger stores, they could possibly dissuade some of their consumers. Another key threat for the organization is the price of organic foods. Consumer pays a premium for the items due to the high production cost. It is important whole foods key their now loyal customers or they may lose them to non-organic foods that are less expensive.  Whole Foods has a high competitive strength as well their highly attractive industry they compete in.  “Whole Foods Market is a dynamic leader in the quality food business. We are a mission-driven company that aims to set the standards of excellence for food retailers. We are building a business in which high standards permeate all aspects of our company. Quality is a state of mind at Whole Foods Market.”

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