Case Study: Whole Foods Market 2006: Mission, Core Values and Strategy
What are the chief elements of the strategy that Whole Foods Market is pursuing?
Founder John Mackey strongly believed in Whole Foods’ mission to be very selective about store inventory, sticking to the company’s core values and ensuring that customers had an enjoyable and interactive shopping experience, while keeping with planned strategies that have set them apart from their competitors. Store Development and Growth Strategy: Prior to 2002, Whole Foods’ strategy for expansion meant the acquisition of smaller, similar chains. The obstacle here was that acquisitions proved to be very limiting in square footage as well as location. Since 2002, Whole Foods has sought to develop and build individual stores to avoid these limitations, allowing the company to operate stores as large as 50,000 square feet. Inventory: Whole Foods also seeks to stock the highest quality and most varieties of fresh foods available, regionally and globally. This is done through careful selection of food suppliers who are in keeping with the highest standards of food production while maintaining a certain degree of environmental and social responsibility in the process. Shopping/Merchandising: Each Whole Foods store maintains a special environment for their customers, such as ambient lighting, natural displays, and educational demonstrations, to encourage the shopper to be a repeat customer and even share their experience with friends and family. Store Operations/Incentives: From an internal perspective, Whole Foods uses a team-based strategy of operations. Employees are part of a democratic process of selecting new hirees, implementing new ideas and encouraging individual creative thinking, while still maintaining accountability for successes and failures as a whole. In addition, employees are given many options with regards to their work schedules, benefits and company profit sharing. Whole Foods recognizes that employees are who are happy or at least satisfied, will be more engaged in their jobs.
2. Is the strategy well matched to recent developments and conditions in the natural and organic foods segment of the food retailing industry?
2000 marked the official start when conventional supermarkets began selling organic food in efforts to gain a foothold in the industry. Designated the first “Certified Organic” grocer by Quality Assurance International in 2003 , Whole Foods had already led the way in setting the standards in the organic food retailing industry, particularly with inventory and store environment. Some conventional stores such as Safeway and Kroger began stocking their butcher counters with organic beef and chicken when consumer demand for these and other organic products grew 7 – 9 percent annually. The result was Whole Foods struggled to locate other suppliers to maintain their own inventory of organic meat. Other grocery store chains such as Albertson’s, have adopted a similar interior as Whole Foods, where foods are displayed in pleasant lighting, in a background of natural materials and colors, in attempts to keep those customers who might leave to get a few items at Whole Foods. So while Whole Foods has set the bar in the organic food industry, it’s competitors are demonstrating their abilities to compete with similar strategies as well. 3. Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not? What do you like or dislike about the company's motto "Whole Foods, Whole People, Whole Planet"? Do the motto and the principles underlying it (exhibit 1) really matter at this company or are they just nice words and cosmetic window dressing? Explain. I believe John Mackey’s strategic vision is presently honest. Ongoing business expansion is a strategy that most business owners plan. While Whole Foods continues to grow in its numbers, the company’s core values are upheld, and there...
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