Board of Directors:
Dr. John B. Elstrott (Chairman), John Mackey (CEO), Walter Robb, Gabrielle Greene, Hass Hassan, Stephanie Kugelman, Jonathan A. Seiffer, Morris Siegel, Jonathan D. Sokoloff, Dr. Ralph Z. Sorenson and William A. (Kip) Tindell, III,
Introduction:
Whole Foods Market, Inc. is a chain of supermarkets selling fresh, natural and organic food items. The headquarters of this company is situated in Austin, Texas. It is a natural grocery products made from 100% organic material producing company. It started in the 1980s, when John Mackey and Rene Lawson took some money from family and friends to start a small natural food items’ store. Later on, this company took over many other food chains through horizontal integration acquiring. It has regional offices in different states of USA, United Kingdom and Canada. The Whole Foods Market comprises of seventeen companies, each selling different kind of products. The reason behind the powerful and fast expansion and growth of this company is the increasing demand for organic food products by the consumers. The annual sales of Whole Foods Market, Inc. is eleven billion U.S. dollars .
Business Strategy
Businesses need to adopt a strategy to fulfill its aims and goals within the right time. Business strategy helps in long-term planning related to all the matters of the company. A business strategy helps the company members determine how much production they should do right now by using their resources to reach their targeted profits. It also helps them in knowing if their company needs new any changes or advancement through which they can tackle the hurdles spread in the way of reaching their goals. Strategy is also about how the business should grow in the future and what skills are required for its growth so that it can gain competitive advantage.
Current Business Strategy:
Whole Foods Market, Inc. is one of the leading American businesses. This company implements the Differentiation Strategy of the business and also Porter’s Five Forces. The company goes after a niche market, selling organic, fresh and toxin-free food products to a certain kind of consumers. These consumers belong to a higher class of the society, educated and concerned about eating 100% organic food and take care of their health and fitness.
Differentiation Strategy:
- Marketing and Sales
The company has developed strong relation with its valuable customers by using innovative and creative marketing strategies. Latest technologies are used in this kind of strategy to cater the needs of the customers and to respond them quickly so that they become loyal customers.
- Human Resource Management
The Human Resource Management frequent does hiring and training of the employees to make them efficient in the customer service section because retaining the customer loyalty for longer period is an important part of the company’s business strategy.
- Procurement
Selection of Suppliers is also very important for Whole Foods Market. They only make deals with those suppliers that offer high-quality raw material so that the customers are not dissatisfied.
Porter’s Five Forces
- The reason why Whole Foods Market has adopted Differentiation is because it has helped them decrease the threat of the substitutes and increase the loyalty of the customers.
- Differentiation also gives the company advantage of having supplier power due to alleviated margins.
- On the other hand, buyer power is decreased as other organic food stores are unable to provide consumers with different options and on lower prices. Natural products are often sold at expensive rates in other stores. Hence, lowering the customer sensitivity to the alleviated prices.
- This company gives its customers a highly valued grocery shopping experience because customers are no longer sensitive to the prices. It has managed to create brand loyalty .
Management Practices:
Today, where most businesses focus on profits and shareholders, Whole Foods Market focuses on customers and employees the most. This company utilizes the innovative working practices to create competitive advantage. It creates teams to achieve targeted goals of the business; which are customer satisfaction, greater return on investments, support community and customer retention.
The company focuses on discipline and democracy at the same time. Commitment to productivity is also an important part of the management practices. Rank and file participation of the employees helps them concentrate on profit earnings. John Mackey emphasizes on sharpening the entrepreneurial energy found in the employees by motivating them to be creative and innovative. The teams created are regularly met. They discuss the problems of the company, their solutions and recommendations. Teams consist of members from six to up to hundred. The leaders of the small teams are members of the Store Leadership Team and the Store Team Leaders are members of the Regional Leadership Team. The teams go all the way up to the Executive Team. Open-Book-Management Philosophy is followed in which the teams compete against each other of different offices for goals like sales, growth, customer satisfaction and many others .
Marketing Practices:
Whole Foods Market, Inc. focuses on a segment of the market and this segment consist of consumers who are willing to buy organic food at comparatively higher cost to maintain health and fitness. Not only have they used word-to-mouth advertising, but they are making an extensive use of the internet. They have created a highly developed and attractive website where they have listed their core values to attract the consumers online. Besides that, they use social media like Facebook, Pinterest and Twitter to spread awareness about their organic products to the targeted consumers.
The company focuses on creating and selling natural and fresh products, they also contribute towards community services to create an environmentally-friendly brand image. It advertises on health and fitness magazines and online websites. At their stores, samples are distributed to the consumers to experience their products .
Current issues affecting the company image either positively or negatively:
Whole Foods Market, Inc. has and keep on acquiring the smaller stores selling organic food products, which has aggravated the locals who showed resistance and boycotts. Besides that, this company has gotten into trouble several times due to its labor issues, business practices, raw material, suppliers and farmers. However, the company keeps on revising its policies to gain the customers and local authorities into confidence.
During 2006 and 2007, the company was listed in many important lists such as the Fortune’s list, Corporate Responsibility Officer magazine, Wall Street Journal, Supermarket news and many others. It has also received several environmental-friendly company awards. This has promoted a positive image of the company.
Recommendations:
In the near future, Whole Foods Market may face some fierce competition in the organic food market because there are several brands now that are rising quickly as they are coming with innovative products. Hence, they should make long-term planning considering this scenario. Besides that, the recent recession has caused people to become more sensitive to higher prices because many consumers have lost their jobs or cut-down their expenses to afford living; hence, higher prices might now get attention of a lot of consumers. Lowering the prices should be considered, but requires many parts of the business strategy to be modified.
References
Cuenllas, Arturo. hospitalitynet. 11 February 2013. Article. 31 March 2014.
intlstrategicmgmt-wfm. 21 March 2013. Article. 31 March 2014.
SlideShare. 06 April 2011. Power Point Presentation. 31 March 2014.
www.wholefoodsmarket.com. n.d. Article. 31 March 2014.
