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Wholefood Market Case Study

Essay by   •  February 21, 2012  •  Case Study  •  691 Words (3 Pages)  •  1,758 Views

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Whole Foods Market has long been known as an company with high quality standards, they have healthy growth stats and well designed employment practices but the company has faced recent difficulties as a result of the economic recession, increasing competition, and complications from acquisitions. To revitalize the company from historical decreases since 2008, Whole Foods Market must revise its costs, refocus its expansion strategies, and promote its brand to compete for the diminishing consumer spending dollar. While implementing changes to catch customers and market shares company needs to protect its vision and mission known as high standards and high ethic codes. So it is really important for Whole Food Market to balance its strategy of cost reduction and keeping high-differentiated standards.

External Environment and Industry Analysis

Consumer awareness and demand for organic food and beverages has increased. The increasing popularity of organic food is playing into the rapidly growing "green movement" in North America, which spans all levels of the food processing, distribution, and retail grocery and foodservice industries. Besides that USDA also increase the regulations on organic food to help customers increasing their awareness about what they are eating.

Porter 5 Forces:

* Low barriers to entry combined with rapid market growth created a huge competition into the market. Since awareness on organic and dietary foods has been increased over decades, industry is attractive for new joints.

* Operating under product differentiation strategy rather than cost strategy Whole Food Market command high prices to its product but since world ecology is on recession, Whole Food Market needs to create cost reduction for its customers and it may help you to increase ability of negotiation with its customer by using volume-buying power.

* Since market was on growth last decade that makes supplier have more option for find buyer to its product however declining in economy makes supplier more dependent with volume buyers such as Whole Food Market.

* Since competition is high, it offers more opportunities for substitute products. This includes both organic and non-organic products.

* Competition among rivalry is high.

Whole Food Market Internal Analysis:

Whole Food Market has strong internal advantages and those advantages make them stay in strong position among its competitors. Their Core values such as high quality brand reputation, dedication to social ethic, best customer service and success on employment system bring good reputation to the company. Financially, there is a upward movement until 2009 net



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