BA 427, Winter 2013:
Whole Foods Market case study:
As stated in the case study, the Whole Food Market Company’s vision and strategy is to offer "the most flavorful naturally preserved and fresh foods available.” The company intends to market their products in "appealing store environments that make shopping at whole foods interesting and enjoyable." The company's cofounder and CEO, John McKay, believes that the availability of high quality natural and organic foods, supported by education and socially conscious activities will "gradually transform the diet of individuals in a manner that would help them live longer, healthier, more pleasurable lives." (Case study, p.1) ...view middle of the document...
The organic/natural segment of the food industry is growing rapidly. Consumer awareness of organic foods and beverages has increased along with the demand for a wider variety. Couple this with the "going green" and "buy local" movements and the company is well prepared for the future of organic/natural food retailing.
John McKay's strategic vision is to change the way people shop and what they shop for in regards to food. He wants to "set the standard for excellence in food retailing”, and believes that "remaining a uniquely mission driven company, highly selective about what we sell, dedicated to our core values, and stringent quality standards, and committed to sustainable agriculture" will continue to set them apart in the food retailing industry. The one main flaw with this is that it is all easily copied. Many of the major retailers are already implementing their own form of unique shopping experience, and offering a wider variety of natural/organic products at lower price points.
Although Whole Foods Markets growth strategy had to be reconfigured to some extent, by cutting back on some of the store openings planned, because of the downturn in the market in 2008 which left the company stock price at a low of $8.34, the company has rebounded nicely to an average stock price of $87 in the year 2012. (Yahoo Financial, Jan 21 2013) the company appears to have weathered the storm of economic downturn, and continues to maintain a leading position in the healthy food industry, and the food industry as a whole.
Although, as of 2009 the company’s net income had dropped by 18% from its high of $203,828,000 in 2006, and earnings-per-share have dropped by 42%, Whole Foods Market strengths reside in explosive revenue growth that calculated to $6.6 billion in 2007 and $10.1 billion in 2011, representing an 11.22% year over year annual growth.
Other strengths reside in the 342 stores in the United States, Canada, and the United Kingdom, allowing the company maintains the benefit of widespread reach. The company also maintains the distinction as a unique destination and shopping experience.
Strengths also include a strong network of suppliers, access to locations rich in their target market through acquisitions and store expansions, a strong brand name, a high-quality brand reputation, and an industry best...