Whole Foods Five Forces Essay

Whole foods strategy consists of high margins on premium and natural foods. They also offer a wide variety of prepared foods for affluent buyers. Managers are given freedom to stock their stores based on local tastes. Mackey also opposed the idea of unions because of their parasitic existence.

A weakness that Whole Foods have is their reputation. A reputation for a grocer is key to its survival and they have the reputation of being very expensive or some call it “whole paycheck.”

I do not believe that Whole Foods can avoid the pricing element of the marketing mix forever, because as it continues to grow, if it wants to maintain the same quality of food that it currently has, it may lead to increase in expenses which could lead to an increase in prices. While consumers may want to shop at a store that it feels is being socially responsible, eventually, the impact on their income may force them to look at other alternatives. The alternatives for consumers could be mainstream grocery stores or other smaller stores that looking to entering the marketing using the blueprint that was created by Whole Foods. In my opinion, I believe that while Whole Foods niche market would avoid Wal-Mart because of the numerous issues that it may have with the store, that same niche market may consider another grocer such as Safeway who may offer products at a lower price.

Whole Foods was established in 1980 with one store in Austin, Texas. Today, Whole Foods is the world’s largest leader in natural and organic foods. There are over 310 stores in North America and the United Kingdom. Whole Foods is committed to the finest natural and organic foods available, sustainable agriculture and have one of the strictest of quality standards. Whole Foods offers customers a wide variety of products. “Natural” refers to food that is free of growth hormones or antibiotics, where “certificated

Whole Foods Market is a leader in the quality and differentiation food business, they offer natural and organic products. Whole food market was opened in 1980 by John Mackey, Renee Lawson Hardy, Craig Weller and Mark Skiles. It was founded in Austin, Texas. In 1984, they start to expand their business out of Austin such as Houston, Dallas and later to others states within the US. In 2002, they entered the Canadian market in Toronto and they entered the United Kingdom in 2004 by acquiring seven Fresh & Wild stores (Whole Foods Market History, n.d). Whole Foods Market is ranked as the nation’s leading retailer of natural and organic

Whole Foods, just like any other retailer right now, has been struggling with the economy. The external environment has been changing in uphill and downhill motions daily, something that Whole Foods has never experienced before. Not only is there pressure on the financials of the corporation, but also there is the pressure to go green.

When comparing store design, there are major differences. Whole Foods offers more of a “total experience” for shoppers,

While the foods retail industry is highly competitive, Whole Foods has established a reputation and maintains a brand loyalty with its customers. Increased rivalry will occur in the larger grocery chains like Wal-Mart and Kroger, because of their flexibility in the products they can offer, and the pressures they can put on the sales growth and overall profits of Whole Foods. They have a larger cash and customer base, and the ability to better advertise their products, while Whole Foods still generates most of their

The main competitor of Whole Foods Market is Kroger Co. and Sprouts Farmers Market. These two companies are also providing organic foods of high quality.

Whole Foods Inc. operates in the grocery industry with its main focus on providing consumers with a healthier, more natural, and a more organic alternative to grocery shopping. Their products differentiate from other mainstream grocery providers because they are a higher quality of product. After previously partnering with Google express, Whole Foods has now invested in Instacart, a delivery service that would primarily deliver Whole Foods products nationwide to its consumers for at least the next five years. (Rey)

Competitors are able to offer cheaper items by selling private brands. Whole foods can focus on their private brand

We will begin with mindset, Whole Foods instead of pursuing the large sales volume and small margins, of Walmart, Kmart and other Florida retailers such as Winn Dixie, and Publix, Whole Food targets a selected group of upscale customer and offer them “organic, natural, and gourmet food. This brings in the Synopsis: The ultimate way to “NOT” compete against a mega-retailer is to create a differentiated market from them.

Whole Foods' utilizes a differentiated strategy, focused on organic and natural foods. This distinguishes them from mainstream grocery competitors, and puts them into competition with other specialized grocery outlets (Urani, 2008). This differentiation, combined with more traditional grocery industry size and operations, gives the company an advantage over most of its competitors.

Marketed as ‘America’s healthiest grocery store’ the company has successfully grown to 408 stores across the world with sales of $14 billion in 2014 (Whole Foods Market, 2015). The firm is positioned as an upmarket grocery due to the emphasis on natural, organic origins, and as a result are able to charge a premium for their products. Through efficiently running its operations and stores, Whole Foods are able to maintain healthy 4.02% profit margins (Financial Times, 2015) and operating margins well above the American grocery store industry average at 6.58% (Bloomberg, 2015). Looking at 2015’s quarter 1 figures it is clear to see that Whole Foods have had a hugely successful year with sales of $4.7 billion, up 10% from the same period last year. Furthermore, they opened 9 new stores and have signed a further 11 new leases.

Over the past few decades, the diet and health food industry has become big business. Americans, along with people in many other countries, have become more educated about the benefits of exercising regularly and eating healthy. Whole Foods Market is pursuing a business strategy that strives to offer products that are of the highest quality, least processed, most flavorful and natural foods possible (Whole Foods Market,