Whole Food MARKET

Whole Food MARKETCOMPANY BACKGROUNDWhole Foods Market is the worlds leading retailer of natural and organic foodsIn 1980, John Mackey, (current president and cofounder of Whole Foods) with Craig Weller and Mark Skiles. This joint venture took place in Austin, Texas (Headquarter), be a company in a single natural food market with staff 19. 2010, The company has grown from 19 original employees to more than 53,500 team members, 2013, 78,000 team member2002, 193 stores in 31 states include Canada and the United Kingdom, 367 stores in 40 U.S. states, Canada, and the U.K. each week, 2013 and Whole Foods believes there is a potential for at least 1000 stores, currently it has 299, 2011. , 2015 = 417 store in usIn May 2003, Was recognized as Americas first national certified organic grocer (by federally, CCOF)Encourage a team as well as strive to take care of their consumer, 100% customer satisfaction with the goal to delight customer in every situation (life blood of business) because the two are interdependent on each otherMain Type of target; stores are typically located on premier real estate sites, often in urban, upper-income, high-population locales and typically have a high percentage of college graduates 40% or more of the residents have a college degree as they are more likely to be aware of nutritional issues premium price for premium products

annual sales by product category

- 3 private label products - The stores emphasize perishable and prepared products, which account for about two-thirds of sales. - Whole Foods Marketoffers some 4,400 items in four lines- Whole Foods largest third-party supplier is United Natural FoodsCore Values Whole Foods has identified seven core values that specifically express the purpose of its business and not only provides profits, but creates value for its stakeholders: Selling the highest quality natural and organic products available Satisfying and delighting its customers Supporting team member happiness and excellence Creating wealth through profits and growth Caring about its communities and environment Creating ongoing win-win partnerships with its suppliers Promoting the health of its stakeholders through healthy eating education

Provide the highest quality natural and organic foods Conveying to the customer the high quality of product Offer a healthy lifestyle and unique experience in the stores Caring about communities and environmentVISSION AND MISSIONVISSION of sustainable future VS uniquely MISSION

Holistic Actions for a Sustainable WorldWhole food strive to conduct business in a manner consistent with their mission and vision. Because company believes they are on the path to a sustainable future. Porters Five ForcesSupplier Power Low and Remaining Constant The supplier power within the organic specialty food stores industry is low as a result of a large number of suppliers and low switching costs incurred by a company when switching from one supplier to the next. Suppliers that supply to Whole Foods hold very little power in particular. Although Whole Foods doesnt abuse its power, it could essentially name its price for products from its suppliers. As the market leader in the organic specialty food stores industry, suppliers strive to have their products picked up by Whole Foods. Buyer Power Medium and Increasing In the specialty food stores industry the buyer power is medium as a result of the growing number of substitute products available. With many alternative products in the market buyers are price sensitive and search for the best deal. The strength of buyer power is expected to increase as more specialty stores enter the market. The increase in the number of store will decrease the differentiation between the existing stores and subsequently increase the number of substitute products. Whole Foods has been able to weather the increasing buyer power by maintaining its strong brand image as evident by its ability to increase revenues even throughout the recession. Threat of Substitutes Medium and Remaining Constant Within the specialty food stores industry the threat of substitutes is medium as there are various stores throughout the industry that directly compete. However, the nature of a specialty store indicates that the product offerings are differentiated and finding multiple stores that compete across all product lines is unlikely. Whole Foods has enjoyed being a market leader for some time in the organic food store industry, but as consumers continue to increase their desire to maintain a healthy lifestyle through the purchase of organic foods, more organic specialty food stores are projected to open. The development of new stores will increase the consumers inclination to substitute. Barriers to Entry Low and Remaining Constant It is relatively easy to enter the specialty food stores industry. This is evident within the growing organic food market that has seen recent successes of companies such as Trader Joes and Market of Choice. The access to inputs is easy with such a large amount of organic farmers in the United States. The capital requirements are not significant and there is little expected retaliation from major players in the market. Although the barriers to entry are low, Whole Foods benefits from the fact that it has an established brand name and identity, which results in a loyal customer base. FINANCIAL REPORT

Net income, revenueStore sale growthFree cash flowhttp://financials.morningstar.com/ratios/r.html?t=WFMhttp://qz.com/206843/whole-foods-thinks-its-too-expensive/ down in 2009

THREATAndIncreasingly competitive marketCOMPETITIVE ENVIRONMENT eating healthfully environmental sustainability, the green movementdemand for organic and natural foods all supermarket including - traditional supermarkets are now introducing lifestyle ex WalMart, King Kullen, StopnShop,Krogers, Albersons, Safeway and Fairway discounted retailor ex , Walmart, Target Sams Club and Costco additional grocery store ex Stop, N Shop and ShawsOrganic food retailor- Trader Joes, natural by nature, Sprouts large national food chain ex Publix safeway Walmart Main Competitor - Past Wild oat In the early to mid 2000s, its biggest competitor was Wild Oats. In 2007- Now - Rival Organic Chain ex Sprout and Traders Joes- Mass market retailor ex Walmart Cost Co The Kroger CoA low cost structure allows Trader Joes to offer competitive prices while still maintaining its margins. Maintaining high quality at low priceTrader Joes was named the second most innovative company in the entire food industry: Rather than carrying around 50,000 products like a typical grocer, Trader Joes stocks just 4,000 different products. This efficient stocking system Free cash flow compare with competitivehttp://www.fool.com/investing/general/2014/06/04/whole-foods-competitors.aspxhttp://www.fool.com/investing/general/2015/03/11/why-whole-foods-market-inc-should-fear-kroger-co.aspx

WHOLE FOOD STRATEGYWhole Foods Market The company targets locations where 40% or more of the residents have a college degree as they are more likely to be aware of nutritional issues.

mergers, acquisitions and new store openings (Expansion)- Differentiation Strategy- Expansion Strategy Acquisition Strategy Brand Strategy

Differentiation StrategyThese differentiating factors have created a loyal customer base that values the Whole Foods experience Esp in quality as excellence and innovation that allows them to charge a premium price for premium productsdifferentiation strategycommitment to natural and organic products: moreover they Whole Foods products differ by geographic regions and local farm specialties: carefully researched to ensure that they are meeting the demands of local community

high quality standards: products have to undergo a strict to determine if they are whole food materialemphasis on perishable product sales; it is the 2/3 of its saleand highly dedicated and empowered employees; ex team member who deliver exceptional customer service are well trained and have good service Economic recession, If Whole Foods continues to come up with innovative ideas to still compete during a recession, there is much opportunity as the economy evolves and climbs up the economic life cycle into recovery, expansion, and boom states

the primary purpose of carrying these brands is to differentiate Whole Foods from its competition. Whole Foods chooses to not carry products such as Coca-Cola and Pepsi, but rather carries 365 Organic Cola. This alternative is in line with its organic brand image and provides value to its customers Difference shopping experience ex band wagon of go green movement From this the customers are not only local people but also category of upscale, educated, new age people

-Whole Foods has grown over the years through mergers, acquisitions and new store openings-PRICE few selected area but they are more focus on quality and service as a means of standing out from the competitionWhole Foods strategy of expansion and acquisitionhas fueled growth in net income since the companys inception

=5They forecast to open 17 new stores in each of the following two years,2010 = 17 ,originally they forecast to open 39 store in 2010 10. STRUGGLING TO GROW IN AN INCREASINGLY COMPETITIVE MARKET

Just focus on expansion and acquiring stores strategy, with just looking to increase overall sales by opening new stores

As the company expands, this task increases in complexity and magnitudeOld: Growth StrategyNew: Brand image StrategyResult in:AVG weekly sales per store have decreased over the last number of years despite Sales overall increaseSolve:>>> should focus on growing sales within the stores they have Result in: This increase in competition can lead to the introduction of price wars where profits are eroded for both existing competitors and new entrants alikeincreasing number of competitors moving into the organic foods industryGrowth Strategy: negativeexpansion and acquisition strategyIMPACT OF EXPANSION increasingly difficult to find appropriate locations for new stores that are first and foremost in an area (2010, 29>17) - reduces the efficiencies because company has a big adaptation such as both are Costly IMPACT OF EXPANSIONFuture acquisitions will be more difficult for Whole Foods as the FTC will be monitoring the company closely to ensure that they do not violate any federal antitrust laws through the elimination of any substantial competition within this market. Brand image Strategy: positiveIMPACT58 Unlike low-price leaders such as Wal-Mart, Whole Foods dominates because of its brand image, >> which is trickier to manage and less impervious to competitive threats. As competitors start to focus on emphasizing organic and natural foods within their own stores, the power of the Whole Foods brand will gradually decline over time as it becomes more difficult for consumers to differentiate Whole Foods value proposition from that of their competitors.

SWOTWeakness: they still have pricy while the growth of organic food industry are increasing and also have low priceThe target group is quite specificSpend much less than other supermarkets on advertising, just word of mouth to Whole food just focus on the expansion strategy

SWOT Analysis- Brand image and loyalty- Employee talent and retention - Extensive product offerings

-Little international presence-Increasing rental expenses - Growth Abroad- Strategic acquisitions and integrations - Increasing health conscious society Increasing Competition- Stringent regulations

KEY TO SUCCESS Whole Foods Market Whole Foods - Whole People - Whole Planet Whole Foods Market , Key to success in future growthfocuses on earning a profit while providing job security to its workforce to lay the foundation for future growthWhole Foods, Whole People, Whole Planetemphasizes that our vision reaches far beyond just being a food retailer. Our success in fulfilling our vision is measured by customer satisfaction, Team Member excellence and happiness, return on capital investment, improvement in the state of the environment, and local and larger community support.WHY WHOLE FOODDedicated and passionate employees which leads to low employee turnover

Brandable products and services Whole Foods is maybe the most prestigious brand in the supermarket business

Products positioned to increase market share Private label 365 organic brand has been growing revenue rapidly

Expanding addressable market for products or services Organic food is fastest growing food market in the world

Pure growth companies are able to grow in all economic environments WFMI grew revenue throughout recession

Exposure to emerging markets Little, but WFMI expects to grow its market outside the U.S.

Significant insider ownership CEO is paid $1 dollar per year, all compensation tied to the stock, similar model for other executives as well

Compelling economic value added model The company is famous and successful for its conscious capitalism and triple bottom line approach