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Team 3
Rebecca Eggerman
Alexander Johnson
Miguel Lopez
Hannah Stephens
Carissa Tarnowski
Company Background
 Founders: John Mackey and Renee
Lawson Hardy and Greg Weller and
Mark Skiles
 1980 Safer Way Natural Foods and
Clarksville Natural Grocery merged
creating Whole Foods Market
 Merger established blue ocean and
now Whole foods is the iconic brand
for natural foods and practices
 Grown to over 340 branches in the
US, Canada, and the UK and is now a
$11.7B company
Mission Statement
 The motto highlights their
mission:
 Whole foods: We obtain our
products locally and from all
over the world, often from
small, uniquely dedicated food
artisans.
 Whole people: We recruit
the best people we can to
become part of our team. We
empower them to make their
own decisions, creating a
respectful workplace where
people are treated fairly and
are highly motivated to
succeed.
 Whole Planet: We recognize
the connection between our
lives, our communities and the
environment
Core Values
 Selling the highest quality
natural and organic products
available
 Satisfying and delighting our
customers
 Supporting Team Member
happiness and excellence
 Creating wealth through profits
and growth
 Caring about our communities
and our environment
 Creating ongoing win-win
partnerships with our suppliers
 Promoting the health of our
stakeholders through healthy
eating education
Competitive Strategy Analysis:
Revenues
 2008
 $7,954 million
 2009
 $8.032 million
 2010
 $9,006 million
 2011
 $10,108 million
 2012
 $11,699 million
Competitive Strategy Analysis:
Product Differentiation
 Price Premium
 High Quality
 Harris Interactive Study
 82% said prices impacted
grocery shopping
 72% will continue to buy
natural and organic foods
Corporate Strategy Analysis: Pricing
Strategy
 Revamped
 Value Offerings
 Expanding Market Base with
Lower Prices




The Whole Deal
Virtual Value Tour
Price Promotions
Discounts
 Expansion
Corporate Strategy Analysis: Quality
 High Quality
 Strict Quality Standards
 Foods free of artificial
preservatives, colors, flavors,
sweeteners, and hydrogenated
fats
 Foods that are fresh wholesome,
and safe to eat
 Seafood
 Highest farmed seafood
standards in the industry
 First to offer Marine
Stewardship Council certified
seafood
 Meat and Animal Welfare
 5-Step™ Animal Welfare Rating
Standards
Financial
 Whole Foods
 4%
 Kroger’s
 1.5%
SWOT Analysis
 Strengths
 Market Leader
 Growth
 Quality and Store
Customization
 No. 19 on Fortune’s World’s
Most Admired Companies list
 Weaknesses




Concentrated in US
Relative Slow Growth
Pricey Perception
Limited number of suppliers
 Opportunities
 Expansion
 Consumer Health Trends
 Increasing number of US
organic farmers
 Threats
 Supermarkets introducing
organic products
 Consumers downgrading
 Increasing food prices and
inflation
Porter’s Five Forces
 Potential Entrants
 Low
 Suppliers
 Medium
 Buyers
 High
 Industry Competitors
 Medium
 Substitutes
 Medium
Whole Foods’ Strategy: The Whole
Foods Experience
Case Study
 Shopped at least twice a month
 Toronto
 WFM Customer
 Affluent
 Educated
 White
 Income
 Varied, but generally much
higher than the urban average
Customer Values
 Environmental Sustainability
 Local or organic food
 Labor Justice
 Fair Trade
 Community Building
 Shopping at a local market to
strengthen community
relationships
First Visit Experience
 I was amazed. I loved it at first
sight. They say, can you fall in
love at first sight? Yeah, you
can!
 The pleasures and the special
role in their daily routines of
the WFM shopping experience
 “Outing”, “Vacation”, or “A
retreat from the mundane
world of work and family
responsibility”
10Xers
What it is not
 Is not the Fastest companies
 Not the ones looking for the
turbulent markets
 Not the most innovative
 The most radical changes
What they are
 The ones that know when to be
fast and when to be slow.
 They find what works and why
 The stay consistent as possible
to great as stable environment
to grow
The Blue Ocean
 Cirque du Soleil
 Didn’t compete with the big and
established
 They expanded the boarders of
the market
 They gleaned a new industry
from the old one
Fire Bullets then Cannonballs
 Why build new stores in new
locations when somebody else
has done it for you?
 Whole Foods acquired its
main competitor
 They have an established
customer base
 They know the local
market and community
Whole Foods Market’s Key Issues
Three of their most obvious key
issues in the media in 2013 consist
of the following:



The consumer’s want for
Non-GMO labeled products
on all products that contain
do not contain genetically
modified organisms
Whole Foods trying to
expand into smaller areas
with lower income
populations to increase
consumer base and have a
larger number of store
locations
CEO John Mackey’s strong,
radical, libertarian views
and push for more
“Conscious Capitalism”
which could be hurtful to
the company
Options for Non-GMO labeling

Whole Foods has the option
to either commit to labeling
all of their Non-GMO
products, which they have
stated will take up to 5 years
to complete with much
research and investment
costs, to provide customer
satisfaction.

Whole Foods has the option
to opt out of labeling all their
Non-GMO products in order
to be able to spend more
money on new store
locations and not have to
deal with the disparagements
from those who oppose the
movement.
Options for Store Expansion: Goal
1,000 in US

Whole Foods has the option
to continue to expand into
smaller and lower income
areas in order to reach their
goals of eventually having
1,000 stores in the U.S.

Whole Foods has the option
to only locate their stores in
their traditional wealthy,
large income areas, which is
where their business seems
to thrive most. This will
better ensure guaranteed
success in new store
locations. There could be a
chance that this option may
not provide the company
with being able to have 1,000
stores in the United States.
Options for CEO John Mackey’s
Public Behavior

John Mackey can continue to
be outspoken on his views of
politics and business that will
most likely ensure the
business of people who
believe in the same views as
he does.

John Mackey can make the
choice to become more
reserved on publically
speaking about his political
views, which may ensure to
keep more of his customers
happy and not cause
consumers with different
views to protest or boycott
Whole Foods.
Whole Foods Market’s pledge to
consumers
“When Whole Foods Market fails to measure
up to its stated Vision, as it inevitably will at
times, we should not despair. Rather let us
take up the challenge together to bring our
reality closer to our vision.”
Industry Analysis: Business and
Economic Characteristics
 Health conscious individuals
 Increasing popularity
worldwide
 Rapidly growing industry
 Creation of Blue Ocean
 Competitor inspiration
 Supply strain
Industry Changes
 Consumer demand increase
 Supply shortage
 Government involvement
 WFM remaining profitable
 Innovative company
 Strategic adaptations
Competitive Forces
 “Rival digestion”
 Acquiring various companies
 Increasing market share
 Relationship maintenance
 Grape supplier in Chile
 Strategy innovation
 On the path to 10X
Strong Competitors
 Traditional Grocers
 Walmart
 Low prices
 Similar products
 Kroger’s
 High quality products
 Competitive prices
Weak Competitors
 Organic/natural grocers
 Sprouts Farmer’s Market
 Privately owned
 Not a lot of expansion
 Natural Grocer’s
 Recently publically traded
 Bland atmosphere
 Regardless of competitive
prices and quality
Future Competitive Moves?
 Build brand image
 Focus more on core
competencies
 Increase advertising
 Consider Endorsements
 Extend relationships
 Expand into more countries
Keys to Competitive Success
 Innovation
 Core Competencies
 Supplier Relationships
 Expansion
Further Industry Analysis
 Highly volatile and increasingly
competitive market
 Many new entrants into the
industry
 Volatile prices in costs of food
 Whole Foods is not a cost
leader
 Key factors
 Strong growth strategy
 Commitment to quality of
goods
Driving Forces for Change
 New Paradigm for customers in
America
 New entrants into the
marketplace
 Labeling laws and regulations
 Number of new entrants into
the market
 Genetically modified products
 Number of customers
 Customers seeking diet foods
 New value on eating healthier
 Additional labeling and
regulations
 New FDA regulations and
labeling for GMOs
 Foreign markets and expansion
 Need for international
presence
Competition Issues
 Lack of economies of scale
 Need for expansion in the UK
and Canada
 Need for reduction in store
space
 Walmart and giants
 Global supply chains
 Competitive advantage
Ambition of Whole Foods
 Push for differentiation and value
 Quality over cost
 Reduction in stores that it is
expanding in to
 Growth won’t save the company
 Use of lower ranged product line
365 organic
Questions?