Question 1
The existence of different economic classes in the market is undeniable. The company recognizes this and does so by using a stratified pricing approach. By setting different levels of pricing, the company caters for all the economic classes making their products as competitive as possible. This aspect can positively affect the company’s choice to expand as this ensures their price flexibility in entering new markets and above all giving the economies of scale to the company due to its wide range of products according to price.
The company has exercised its Corporate Social Responsibilities by launching the Green Movement. By launching efforts to trigger awareness and action to remedy the problems facing the United States food system, the company has shown initiative and interest in the welfare of its clients and the general community. In expanding in new markets, this will positively impact on the company’s image in new markets as the world becomes more and more environmentally aware.
Question 2
Acquisition and Mergers
The organic food industry can be a challenging market when a business or a company does not have the right connections in terms of suppliers and distributors. When expanding into international regions holding great economic potential in the organic industry without complete and total grasp of a ready distribution structure, acquisitions or buyouts are the recommended strategy. The company will simply take over the existing suppliers, distributors and clients.
Stratified pricing is crucial for the flexibility of the product in the market. A pricing system that caters for all classes in the economy is important to ensure marketability of the product and the ability to reach the whole market to give a huge market share to the company.
Question 3
There is a great deal of competition in the global market. There is need for Whole Foods to increase marketing and employ local media to increase its client base. Most grocery stores engage in competitive advertisements in local TV stations. I would employ a creative TV advert that integrates humor and the Whole Foods mission statement. I would use the Dorito’s “Goat for Sale” advert as a bench mark.
I would maintain the growth of the company to a more manageable pace. By reducing the average square foot per store, the company would ensure that it has smaller more manageable stores that also ensures quality of products rather than focusing on quantity.
I would continue to concentrate on differentiation of products. I would find means to reduce upstream supply costs. This would mean maintaining the company’s image for provision of quality organic food. However, I would find a balance so as to use the private labels to offer clients low-cost products.
I would cut back on the company’s spending by closing any and all loss-making stores.by choosing to sell shares of common stock to their clients, the company would raise required capital for expansion avoid debt.
Question 4
International expansion would mean an increased client/customer base.
With an increased customer base, an accompanying increased sales is eminent. This would mean the company could enjoy higher profit margins.
Global expansion would mean the company will have access to a larger pool of skilled workers. With expanding the business globally, the company could select employees from a large number of skilled and highly educated professionals.
Efficiency of the company will increase with global expansion. This is because a growing and expanding Whole Foods will enjoy economies of scale. Economies of scale will raise the company’s margins, decrease production costs and maintain a competitive price.
