business diccussion

Introduction

The purpose of this project is to provide a strategic plan for Whole Foods, Inc. This strategic plan will be composed of identifying strategies and how they are used at the corporate, business, and functional levels of Whole Foods Market. The following areas will be analyzed: vision, mission, organizational background, long term objectives, strengths, weaknesses, opportunities and threats.

Vision and Mission Statement

“The mission statement should define the purpose of the organization, customers, products or services, markets, philosophy, and basic technology” (Characteristics of a Mission Statement, n.d., para.7). Whole Foods Market is a company whose vision and mission statements are expressed through its core values. WFM focuses on providing the highest quality of natural and organic products, satisfying customer needs, promoting excellence in their team members, and exercising stewardship over shareholder investments. The mission also ensures to address their stakeholders by expressing social and environmental responsibility to the local and global communities.

Background Organization

John Mackey and Renee Lawson Hardy, owners of Safer Way Natural Foods merged with Clarksville Natural Grocery owners Craig Weller and Mark Skiles to form the original Whole Foods Market in 1980 located in Austin Texas. Boasting with a staff of 19 personnel, Whole Foods Market was seen as an immediate success due to the high demand for natural food supermarkets in the U.S. Today, the company is one of the top leaders in organic sells with more than 430 stores, throughout the U.K., Canada and 42 U.S. states (Whole Foods News Facts). The company continues to provide the best natural and organic foods while maintaining strict quality of standards.

Mackey, cofounder and CEO believes Whole Foods Motto – Whole Foods, Whole People, Whole planet sets the standard for reaching far beyond just a food retailer. He attributes the success in fulfilling the vision by marketing high-quality natural and organic foods to communities helping to change the eating habits of individuals in a way that attribute to the longevity of life and health.

In 2015, Whole Foods Market placed No. 18 on Fortune’s World’s Most Admired Companies’ list as well as No. 25 on the list of companies that have the best corporate, social, and responsible reputations among the U.S. public. COO, A.C. Gallo states “Whole Foods Market has consistently stayed true to its mission by putting a clear set of core values into practice that actively help make our planet a healthier, more prosperous, and more sustainable place” (Whole Foods Newsroom, 2015).

Industry Analysis

The natural and organic food industry continues to rapidly grow as the demand for healthier eating is on the rise. According to USDA, consumer demand for organic goods continues to grow by the double digits resulting in a total contribution of over 4% of total U.S. food sales (Organic Market Overview, 2014). Many surveys account for a variance of age groups who choose to shop for natural and organic foods. Genetically modified organisms seems to be the big push behind consumers wanting foods that are fresh and locally grown.

The industry analysis is based on Porter’s Five Forces Model whose purpose is to identify how much profit potential exists in an industry (Strategic Management, 2014). It shows the company’s strengths or intensities of external forces significant in the industry environment. The table below will identify the five forces and impact associated with each force.

Five Forces

Buyer power – According to Food Marketing Institute, in 2015, the average number of trips per week consumers make to the supermarket is 1.5 (FMI, n.d.). Buyers typically don’t purchase in large quantities, but do frequent the grocery stores regularly. Whole Foods buyers show a low switching cost and can find many of the products the company sells at their local competitors such as Trader Joes, Costco, or Wal-Mart. As well, customers can easily access product information being offered at Whole Foods to stay well informed about the products and prices of what’s being sold.

Supplier power – The rise in organic and natural food products can cause limited supplies for the company and for this reason, suppliers could force the demand. However, Whole Foods Market suppliers include local, regional and national wholesalers and as a result, the variance in suppliers help to reduce the force behind the bargaining power of suppliers.

Threat of Substitute of new Products or Services – The grocery industry poses a huge threat to Whole Foods. As a result, substitutes such as cheaper products which aren’t organic, or the option to dine at a restaurant can be cheaper than shopping at Whole Foods. These products makes it easier for customers to switch products.

Threat of New Entrants – The food retail industry requires huge spending. There are several competitors such as Wal-Mart, Wegmans, Trader Joes, and Costco who all operate in the food industry. These companies also provide organic products at a more economical price. As a result, customers can easily be drawn away for better prices.

Rivalry Amongst Competitors – The demand for more grocery food and health food stores are low as the industry is saturated with many options. The rivalry amongst competitors is really strong because food stores use special promotions, coupons, and reward programs to save money. Whole Foods occasionally offers such specials and as a result customers can easily switch for their advantage.

References

Characteristics of a Mission Statement (n.d.). Retrieved November 15, 2015 from

http://www.zainbooks.com/books/management/strategic-management_6_characteristics-

of-a-mission-statement.html

Core Values. (n.d.). Retrieved November 17, 2015, from

http://www.wholefoodsmarket.com/mission-values/core-values

Newsroom. (n.d.). Retrieved November 15, 2015, from http://media.wholefoodsmarket.com/fast-

facts

Newsroom. (n.d.). Retrieved November 14, 2015, from

http://media.wholefoodsmarket.com/news/whole-foods-market-is-no.-18-on-fortunes-

worlds-most-admired-companies-list

Our Commitment to GMO Transparency. (n.d.). Retrieved November 16, 2015, from

http://www.wholefoodsmarket.com/our-commitment-gmo-transparency

Quality Standards. (n.d.). Retrieved November 17, 2015, from

http://www.wholefoodsmarket.com/quality-standards

Strategic Management (2014). Washington, D.C.: The Saylor Foundation

Supermarket Facts. (n.d.). Retrieved November 13, 2015, from http://www.fmi.org/research-

resources/supermarket-facts

USDA ERS - Organic Agriculture: Organic Market Overview. (2014, April 7). Retrieved

November 15, 2015, from http://www.ers.usda.gov/topics/natural-resources-

environment/organic-agriculture/organic-market-overview.aspx

We Create Ongoing Win-Win Partnerships with Our Suppliers. (n.d.). Retrieved November 17,

2015, from http://www.wholefoodsmarket.com/mission-values/core-values/we-create-

ongoing-win-win-partnerships-our-suppliers

Whole Foods Market History. (n.d.). Retrieved November 15, 2015, from

http://www.wholefoodsmarket.com/company-info/whole-foods-market-history

Whole Trade Guarantee. (n.d.). Retrieved November 17, 2015, from

http://www.wholefoodsmarket.com/about-our-products/product-lines/whole-trade-

guarantee