Whole Foods - Swot & Porter's Five

Topics: Organic food, Whole foods, Financial ratio Pages: 11 (3716 words) Published: November 4, 2011
Whole Food’s Strategic Analysis Case Study
September 11, 2011

Table of Contents
Whole Food’s Strategic Analysis Case Study3
Whole Foods Winning Strategy4
Whole Foods Vision and Core Values6
Whole Foods Competitive Advantage7
Whole Foods Market Financially Sound10
Whole Foods Strategic Recommendations13

Table of Figures
Figure 1: Whole Foods Market - SWOT analysis 3
Figure 2: Porter’s Five Forces Summary8
Figure 3: Whole Foods Market - Trend Analysis…………………………………………..10 Figure 4: Whole Foods Market - Profitability ratios11
Figure 5: Whole Foods Market – Liquidity, Debt and Activity ratios12

Whole Food’s Strategic Analysis Case Study
Whole Foods Market the world’s largest supermarket chain of natural and organic foods has commissioned our firm to provide actionable recommendations that will add value to Whole Foods product base as it pertains to their marketplace growth, operations and strategic direction. The following SWOT analysis highlights the current situation of Whole Foods Market (WFM). Internal EnvironmentSTRENGTHSWEAKNESS

1) Industry leader in the organic and natural foods markets with over $8 billion in sales and an approximate 1% share of the total grocery sales in 2009 (Thompson, Peteraf, Gamble, & Strickland, 2012). 1) Consumers continue to associate Whole Food’s with their Whole Paycheck.

2) A highly skilled work force grown organically and through strategic acquisitions that is incented to operate profitable stores that achieve organizational objectives. 2) Higher overall labor costs compared to chain competitor's

3) Superior reputation based on the variety and quality of organic products available3) Limited international expansion, especially the “hot” German market. External EnvironmentOPPORTUNITIESTHREATS

1) Growth in the existing market as consumers demand for organic products continues to increase at greater than 10% vs. traditional grocery product (Thompson et al., 2012).1) Continued economic recession causing targeted consumers to reduce grocery spending at premier chains like WFM and/or substitute similar products from lower cost providers.

2) Expansion o f value based products through increased demand for WFM's 365-Everyday Value and 365 Organic private label products2) Increased regulations due to number of product recalls, inaccurate labeling, etc.

3) Expansion to sell WFM value based products in traditional markets and food deserts.3) Increased competition thru supermarket rebranding and big box giants
4) Targeted marketing to the aging population ($2 billion health and wellness market)
Figure 1. Whole Foods Market – SWOT Analysis

Whole Foods Markets’ strengths of industry leader, exceptional employee knowledge base and superior reputation positioned them as exceptionally strong in the organic retailing industry. Although organic retailing has become more competitive, customers are continuing to spend their money on healthy organic foods. Whole and natural foods are known to be beneficial and it readily accepted as the mainstream diet of choice for the informed and health-conscious shopper. Although the volatile economical conditions do encourage consumers to cook at home, and save on outside dining, they still expect good value for their money. WFM should continue to spotlight their narrowly focus strategy of differentiation and introduction of value based products. The aging population, urban singles, and consumers with higher levels of disposable income will be the main drivers for the continued demand of organic foods. WFM should exploit these markets with targeted advertisement and education to counteract the external threats of increased competition. Additional recommendations are outlined in the recommendations section. Whole Foods Winning Strategy

Whole Foods Market’s strategic vision is anchored on being selective about...
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