Teaching Note: Whole Foods Market: 2010 How to Grow in an Increasingly Competitive Market?
Synopsis of Case
This case outlines Whole Foods’ competitive approach to dominating natural and organic food sales. Focal points in the case are the emphasis on quality and innovation, specified target groups, the Whole Foods shopping experience, and differentiation other than price. Listed on the S & P 500 and Fortune 500 companies, Whole Foods successes are due in part to its mission to provide high quality food, ethical business practices, motivational, and respectful work environment. Locating stores where 40% of residents have a college degree and in highly populated metropolitan areas and requiring foods to be fresh, safe, organic, and reflective of a healthy lifestyle has played a role in a well established Whole Foods brand image. Increased competitive aspects, however, have triggered Whole Foods to examine the need for new direction and ways to stimulate and sustain growth in the industry.
The main teaching objectives of this case are:
1. To discuss the steps necessary in planning strategy
2. To utilize the competitive forces model to identify opportunities and threats. 3. To look at sources and durability of competitive advantage. 4. To discuss how functional level strategy can be used for competitive advantage. 5. To discuss the role of competitive positioning in choosing a business model strategy. 6. To determine the basis for generic level strategies.
7. To recognize and discuss factors contributing to market growth and their impact on strategy.
The case works best when positioned towards the beginning of a strategic management course. It is very useful for illustrating the material related to the impacts of competition on strategic decision making. The case can also be used to discuss factors that impact the choice of business models. The case works particularly well when teaching the strategic actions necessary for increased growth.
Strategic Issues and Discussion Questions
1. What steps has Whole Foods taken in appropriately planning strategy? Assuming Whole Foods must develop a new business model, how should they go about this?
Whole Foods has done many things to maintain a 30 year record of success many of which fall into the category of good planning. The following list encompasses those steps that Whole Foods has made for appropriate planning and a few actions performed in each step: Having a mission and set of major corporate goals
“The Company is highly selective about what they sell, dedicated to stringent quality standards and committed to sustainable agriculture. They believe in a virtuous circle entwining the food chain, human beings and Mother Earth: each is reliant upon the others through a beautiful and delicate symbiosis.” Company philosophy, “Whole Foods Market’s vision of a sustainable future means our children and grandchildren will be living in a world that values human creativity, diversity, and individual choice. Businesses will harness human material resources without devaluing the integrity of the individual or the planet’s ecosystems. Companies, governments, and institutions will be held accountable for their actions. People will better understand that all actions have repercussions and that planning and foresight coupled with hard work and flexibility can overcome almost any problem encountered. It will be a world that values education and a free exchange of ideas by an informed citizenry; where people are encouraged to discover, nurture, and share their life’s passions.” The company strives to take care of their customers, realizing they are the “lifeblood of our business” and the two are “interdependent on each other.” Whole Foods’ primary objective goes beyond 100% customer satisfaction with the goal to “delight” customers in every interaction. Identified environmental impacts
Whole Foods targets their locations specifically by an area’s...
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