Whole Foods Market Environmental Analysis Essay

One of the biggest external environmental threats against Whole Foods is increases in domestic competition. At its inception Whole Foods was one of the only providers of organic foods. However now there are many rivals who have taken apart of this ever going interest in our society for better living. Stores such as Wal-Mart and Target have joined the bandwagon of providing their customers with organic foods. With many stores now offering organic foods this has put a dent in the availability of organic foods in other words has shorten the supply of organic foods to Whole Foods. Another external environmental threat was the economy. When the economy went down during the recession many people had to make tough choices when it came to their finances and one of the biggest things that were changed was the amount that they spent on groceries. Many people just simply deemed natural organic foods as being expensive and not a necessity. A major opportunity that Whole Foods have embraced was that during the recession Whole Foods recognized that they need to make adjustments decrease the overall prices. Another major opportunity that they need to embrace is marketing the necessity of whole organic foods. Letting people know that eating right is vital to

From the now popular recyclable cloth grocery bags, to the organic garden at the White House, food, and the food industry is changing. The popularity of organic and whole foods is on the rise. Processed foods are increasingly advertising that they are additive and preservative free, and all sorts of products now offer a “gluten-free” variety. The popularity of what is now being called the sustainable food movement, leads many to wonder why are some people willing to pay more, sometimes double, for organic produce, meat, eggs, and milk. Will this prove to be just another trendy American fad, or are there real health benefits from eating organic and whole foods? While the organic market only represents approximately 3% of the total food

Whole Foods is a retailer that specializes in organic foods and it has done an excellent job of determining its target market and how to position itself. Instead of going head to head with large food retailers such as Wal-Mart, Whole Foods has found a niche market that works perfectly for itself. This niche market is one that prides itself on being health conscious and environmentally responsible and Whole Foods has done a great job of positioning itself in the same way through its environmentally safe actions and its use of the local community to stock its stores. However, as Whole Foods grows and expands, a person has to wonder if the company will be able to maintain this same position or will have to make

Sales of organic food have risen steadily over the past couple of years, reaching nearly $30 billion in 2011, or 4.2% of all U.S. food and beverage sales, (Adams). Many people believe that organic foods are ultimately the better choice when it comes to health due to the absence of pesticides and hormones. But other people—especially those whose food budgets may be more defined—wonder if organic food is really worth the inflated price tag. Despite the price, Organic foods are worth producing and consuming rather than conventional foods due to the immense benefits they provide.

Today an increasing desire from consumers is to have healthy and organic product offerings. While

Whole Foods will need to research and figure out marketing strategies to keep the customers loyal to Whole Foods. One of the main reasons customers will go to different supermarkets that have organic foods is because of the different department stores inside the grocery market. For instance, some grocery stores sell organic vegetables, but also have regular vegetables. Some of the larger grocery stores have banks, photo stores, insurance companies that make your stop at the larger grocery store

On averaged their stores are roughly 38,000 square feet and their locations typically carried 21,000 SKUs. They make two-thirds of its revenue by selling bakery, perishable items, and prepared foods. (Ager & Roberto, 2014). Peoples tend to shop at Whole Food Market because of their high-quality natural and organic food. In today’s world peoples are more concern about health concise and effect of pesticide products, more people choose to have organic fruits and vegetables. Whole Foods get most of their produces from local people which are natural and organic, which will help them gain more customer than other company because of increasing demand of organic food (Whole Foods Market History, n.d). They also have a strong brand image and they were the first supermarket who commit to completely eliminating disposable plastic grocery bags to help protect the environment. They also sell many USDA-certified 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.

This situation makes Whole Foods vulnerable to business cycles that affect United States. Like noted during the 2008 economic meltdown, the food industry in the US was highly affected and the sales decline by over 50 percent. Sales decline resulted in loss of jobs, salary cuts and the rise of unemployment leading to the decline of income. As the US organic and natural foods industry is high concentrated with rival firms such as Costco, Stop N’ Shop, Target, Traders Joe’s and Sam’s Club, Wild Harvest, Wal-Mart and Safeway (Harasta, & Hoffman, 2013), Whole Foods should venture into foreign markets and in particular Europe. An expansion in Europe offers vast prospective growth because of its large population. In addition, the Europe organic food market is more sophisticated than that of the US in reference to public acceptance and suppliers. In Europe, the target should be based on area demographics: the location with 40 percent or more people because they are probable of having more nutritional knowledge. (Harasta, & Hoffman,

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 is a supermarket that has successfully become the leader in the organic food segment of the grocery industry. While traditional markets have low brand loyalty and recognition, Whole Foods has focused almost entirely on its brand image, causing their strategy to be one of differentiation over cost leadership. Whole Foods is known as being far more expensive than other chains, due to this brand recognition. In their press release for the Q4 2014 results, they describe their vision and sum up what helps them develop that brand recognition. “We hold the idea of “food” to a higher standard, banning more than 75 ingredients commonly found in other stores, and we believe our unparalleled quality standards

Whole Foods’ incredible rise over the past 34 years serves as evidence of their considerable ability to create a strategy and successfully execute it. Whole Foods differentiated itself by becoming the first Certified Organic grocer in the United States (1) and has stuck to the strategy of selling consumers organic and natural products. The successful execution of this strategy has allowed them to charge a premium for their products giving them higher net margins than nearly all of their competitors. (2) Their ability to earn such premiums has attracted the attention of industry incumbents who are now attempting to lure the increasingly health-conscious consumer with their own expanded offerings of organic and natural foods. For Whole Foods Market to retain their ability to earn such impressive premiums and sustain their growth they will have to execute on their strategy with even greater precision. “No firm can succeed for long without an intense focus on execution. Average executors are average performers, and poor executors risk decline and failure.” (3)

The grocery industry is highly fragmented, with a multitude of strong regional players (Safeway, Publix, Kroeger, Wegmans, etc.). The largest grocery retailer in the United States is Wal-Mart, with an estimated 33% share. Other major retailers are targeting this segment of the industry, focused on a relatively narrow selection of key commodity foods at relatively low prices (Forbes, 2011). Whole Foods competes in a segment occupied by differentiated grocery players including Trader Joe's, Fresh Market and a highly fragmented selection of local and regional upscale and health-conscious grocery stores. The big players in the industry usually carry ranges of organic and natural products as well, siphoning off some business from Whole Foods. As Whole Foods grows, it comes into competition with mainstream grocery retailers more frequently (McLaughlin & Martin, 2009).

These factors represent the culture of the society in which the organization operates with in. Change in social values towards healthy livings has adjusted purchasing behaviour and now people are more focusing towards organic produce. For this reason organic domestic retail sales have increased by more than 50% in the last two years from 623 million to 947 million (Keith, 2012). Availability and distribution of this healthy food have increase rapidly. Woolworths, Coles and Aldi all over Australia stock a range of private label goods.

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.