Analysis Of The Outputs For Whole Foods Market Essay

Whole Foods Market started off as being Safer Way natural grocery store in 1978. However they were not

Consumers view Whole Foods Markets as being very expensive and have given the retailer the nickname “Whole Paycheck”. Whole Foods carries a wider variety of organic foods and healthier brands besides their private brands. Whole Foods is experiencing a decline in sales due to other stores; like Wal-Mart, who are stocking organic foods at much lower prices; which has decreased differentiation (Lutz, 2014). Its decentralized business model decreases efficiency in procurement, distribution, and marketing efforts.

Whole Foods has become the world’s largest retail chain of natural and organic foods supermarkets. Not only is their focus to transform the way consumers look at food and its natural benefits, Whole Foods is looking to make a difference in the world with their products. Whole Foods appears to be in a rapidly growing market. Whole Foods has worked hard to set their products apart from other grocery retail chains and while their prices might still be considered high across the board, their products are geared towards a more health conscious individual who is willing to pay more for a healthier product.

A strategy of Whole Foods’ in 2014 and 2015 was to be disciplined and opportunistic with their real estate purchases. They prefer to open new stores in existing areas and then expand into new areas. Since 2011, Whole Foods’ has opened 100 stores, which is great for growth, but was a huge part of their decline in 2015. As previously mentioned, Whole Foods’ opened 38 new stores in 2015. This large expansion of stores allowed them to produce $1.1 billion in cash flows from their operations, invest $851 million in capital expenditures, and resulted in a free cash flow of $278 million. Those numbers were wonderful for the companies’ shareholders, who got $184 million in quarterly dividends. In 2015, they focused too much on opening new stores, rather than focusing on preexisting stores. Customers said their stores are getting “shabby with mediocre customer service” (Whole Foods’ Sales). This was a huge turn off for many people, especially when they can go to a store like Sprouts, spend less and get just better service, and natural food. The three-year trend for Whole Foods’ was doing very well until this year, as seen below (WFM Gross Profit Margin (TTM)).

The origin of Whole Foods Market began as a small natural food store under the name Safer Way Natural Foods in Austin, Texas, in 1980. As interest in the natural food movement quickly grew, Safer Way soon merged with another local natural grocer. This union was called Whole Foods Market (“Newsroom,” 2015). Though the company started with a mere 19 employees, attraction to this new idea grew rapidly, and it was not long before the company began to build a chain of stores through several acquisitions. Due to the increased interest in natural foods nationwide and very low competition at the time, Whole Foods Market began acquiring food stores all over the nation throughout the 1990s. By 2004, the company had expanded internationally to Canada and the UK “Newsroom,” 2015). Today the company has 414 stores in the US, Canada, and United Kingdom, and approximately 88,000 team members (“Newsroom,” 2015).

Food Inc. opens in an American supermarket and draws attention to the unnatural nature of year-round tomatoes and boneless meat. It pulls aside the curtain that is concealing the truth about food from the consumer. After the brief intro, the movie shifts its focus to the topic of fast food and its impact on the meat industries. Fast food virtually started with McDonald’s. When they decided to simplify their menu and hire employees that repeated one task over and over for minimum wage, the result was the fast food phenomenon that swept the United States, and then the world. Today, McDonald’s is the largest purchaser of beef and potatoes in the United States, and is one of the largest purchasers of pork, chicken, tomatoes, and apples. Though

There is much speculation about whether Whole Foods has done enough to shed its Whole Paycheck reputation in order to remain competitive in the current food retailing industry. Consumer demand has transformed what originally was a natural and organic food retailer – a niche market – into the fastest growing U.S. food seller (Gamble, Peteraf, & Thompson, 2017). Whole Foods original strategy was to provide the highest quality product at the most competitive prices possible. However in 2007-08, following the recession, they adapted their strategy and began to focus on value and controlling cost. When Whole Foods opened they used a focused differentiation strategy, concentrating on a narrow buyer market and meeting the needs of very specific customer base (Gamble et al., 2017). Realizing that their strategy was not necessarily sustainable in the long-term, they adjusted their strategy and began to appeal to a broader customer base with a focus on quality and value.

Whole Foods Market is the leading natural and organic foods supermarket. They are the first national “certified organic” grocery store. 2015 might have been the worst year in the history of Whole Foods Market. Comparable sales had declined for the first time since the recession. There was a humiliating scandal involving mislabeled weights and prices, and the attacks from rivals Kroger Inc., Costco Wholesale and Trader Joe’s only seemed to increase. This resulted in Whole Foods’ shared price plummeting 36%. This was a decline that would have been worse had a late-year buyout rumor no circulated. Whole Foods had diminished this rumor. Moving into 2016, there seemed to be a reason to be optimistic even with the descending momentum and flat comparable sales forecast. In 2016, Whole Foods debut the 365 chain. This was really a jump start for Whole Foods stock at the beginning of 2016. The budget friendly 365 chain allowed the company to reach different demographics and provided a larger range of real estate options, enabling it to open in neighborhoods that may not be fit for one of their full line stores. The 365 is the best solution to stores like Trader Joe’s. “We are continuing to make measurable progress on fundamentally evolving our business including the successful launch of our new 365 format, expanded value investments, and increased efforts to better understand and provide personalized offers to our customers. We are seeing some

According to the Whole Foods Market Inc. case, study shows that Whole Foods Market is an American supermarket chain exclusively featuring foods without artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats. It is the United States ' first certified organic grocer, which means it ensures, to National Organic Program standards, organic integrity of the heterogeneous products from the time they reach stores until they are placed in a shopping cart. Whole Foods Market Inc. opened its first store in Austin, Texas, September 20, 1980, founded by John Mackey and Walter Robb, with John Elstrott acting as chairman. As of September 2015, it has 91,000 employees and 431 supermarkets in the United States, Canada, and the United Kingdom and has its main produce procurement office in Watsonville, California.

According to Strategic Management Concepts and Cases, written by F. David, Whole Food Market, Inc.’s current mission statement is as follows, “to promote the vitality and well-being of all individuals by supplying the highest quality, most wholesome foods available” (David, 2011, p. 74). David also points out that Whole Food Market Inc.’s operating motto is as follows, “Whole Foods, Whole People, Whole Planet” (David, 2011, p. 75). As a food distributor, many of Whole Food Market Inc.’s objectives are

Whole Foods Market began in 1970 as a local supermarket. Over the past 31 years, Whole Foods Market has grown from a single store in Austin, Texas, to becoming one of the worldwide leaders in providing consumers with natural and organic foods. They have grown to over 300 stores in both North America and the United Kingdom. (Whole Foods Market, Inc., 2011) This report examines the chief elements of the strategy that Whole Foods Market has put into place. Also, it uses past financial data to provide an assessment of the condition of the company going forward. Those assessments include recommendations of future actions, along with concerns I have about the way the company is currently operating and some difficulties that may be on the way.

This year, 2010, the company’s business model includes continued focus on vital areas of the company by focusing in on purchasing with regards to the business while creating more worth for the consumer regarding pricing (Whole Foods Market, n.d). In the letter to the stakeholders (2009), Mackey, CEO desires to stay focused on dropping operating cost without harming the customer experience. Additionally, he states that as an organization they are committed to being better custodians of capital and producing free cash flow on a yearly basis. In the future, Mackey foresees new smaller stores that are less expensive, and an increase return on invested capital.

Recently the consulting group has elected to use the Nadler-Tushman Congruence Model based on the input/output analysis that the congruence model provides. With this report it will provide an unbiased outlook on how the inputs align with whole foods strategy. In addition to this data we will analyze how the company has been doing with its performance compared to its goals. This report will analyze the company’s business strategy to its operating environment as well as examine the inputs in the organization’s environment, resources, and history, and how they align with the required outputs. Lastly, we will explain to the executives/consulting group how congruent the company’s outputs are across three levels: the overall organizational level, the group level, and the individual level.

One way to determine the profitability of a firm is to analyze the industry forces that affect competition and drive profits down. Michael porter proposes a framework to analyze the level of competition within an industry; according to porter these forces directly influence the system profitability. The stronger the forces are the less profitable the firm becomes. The forces are defined to be strength of competition, barriers of entry, the power of buyers, power of suppliers, and the substitute products. In the other hand, complementors, cooperation with buyers and suppliers, and coordination among competitors will be the forces that drive the firm profits up. This framework will be followed through to perform the analysis of Whole Foods Market firm, to determine the firm’s profitability and future returns for the long-term investor.

Whole Foods Market, Inc. is the largest chain of natural foods supermarkets operating in the United States. Whole Foods has six core values that drive its company and they include; selling the highest quality natural and organic products, satisfying and delighting customers, supporting their Team Members (Whole Food Employees) happiness and growth, creating wealth through profits and growth, caring about the communities and our environment, creating win-win partnerships with their supplies and promoting the health of their stakeholders through healthy eating education. The company operates stores in 26 states of the US and in the District of Columbia (Whole Foods Market, 2010). Whole