Case Study-Whole Foods Essay

1. Whole Foods creates a narrow market niche by catering to the special needs and tastes of the consumer, thus, creating a differentiation-based advantage over competitors. By taking actions to acquire Wild Oats, Whole Foods has gained the competitive edge in the marketplace. 2. Recent developments and conditions in the natural and organic food industry can put a strain on the vision and strategy that John Mackey first set out to accomplish. However, part of a good business strategy is to be able to adjust and change with development or restrictions by government standards. 3.

John Mackey does have a good strategic vision for Whole Foods. He has the ability to grow the business with such profitability and foresee what the consumer desires and act upon it. The motto of Whole Foods, “Whole Foods, Whole People, Whole Planet” really hits the heart of people. People want to eat better for their health and if they can some how help the planet at the same time then they feel even more empowered that they are doing something good. This motto and the principles underlying it really do matter at this company. Employees are not always looking for more money in a company.

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They are looking for the superiors to recognize that they are doing a good job through rewards and incentive programs. Whole Foods employees are made to feel as an integral part of the business. This allows the employee to be loyal to the company. When this enthusiasm is passed onto the consumer it makes for happier people, which in turn makes a profit for the company. 4. The core values of Whole Foods really do matter. The average consumer wants to know they are creating a healthier life style to help live longer and they are willing to pay extra for higher quality products.

They also want to go into a store and receive knowledgeable, personal attention. It makes them feel as if the extra trip to Whole Foods and the higher prices is all worth it. The consumer becomes educated on the benefits of natural and organic foods and healthier ways to cook them. All these factors allow people to feel good about themselves. This coupled with satisfied employees give way to everyone becoming loyal to Whole Foods. The company’s website has numerous videos of consumers boasting about the stores and remaining loyal to Whole Foods despite protesters for any given reason.

There are also videos of employees explaining how good the company has been to them and therefore they remain loyal in the face of adversity. John Mackey also plays on the importance of giving back to the community and helping those less fortunate than his loyal customers, helping the agriculture industry, maintaining good environmental practices, and giving respect to his trade partners. The combination of these core values contribute to the company’s success. 5. Whole Foods, according to Exhibit 9 and 10, obviously is performing well from a financial perspective.

The real numbers that tell the story lie in the years that follow from 2008 to the present. The stock prices in 2007 were $48. 96. It took a drastic dip in 2008, at the start of the recession, were stock was $20. 03 per share at the end of the fiscal year. It jumped a bit in 2009 to $30. 49. The stock currently is $38. 60 a share, still not where it was 3 years ago. 6.. From a strategic perspective Whole Foods is performing very well. Management has clearly defined the goals to grow the business making their vision a reality.

They have created loyal customers by educating them on the healthier ways of eating, cooking and the positive impact it will have on the environment. Their core values created great communication, customer relations, team work and loyalty. Whole Foods enjoys a competitive advantage over rivals in the marketplace by focusing on special needs and desires of the consumer. Since this company exhibits strong strategic outcomes, it is in a better position to improve the financial performance for the future of the company.

The basis for their winning strategy is helping the local communities, the environment, and as their motto states, the “Whole Planet”. 7. One of the business approaches to strengthen a company’s standing in the marketplace is to acquire or merge with other companies. Whole Foods acquired a floundering company called Wild Oats. The acquisition saved the owner of Wild Oats from losing all its finances. Whole Foods made the stores larger and easier for the consumer boosting the financial performance of Whole Foods. More stores, in more states, and more exposure to the market were their goal.

Unfortunately, overtaking an acquisition means cutting jobs, and closing unprofitable stores. Whole Foods spent millions of dollars acquiring, revising, and reorganizing operations in an economy that was in the start of a recession approx. the same time of the acquisition. Although the decision to acquire Wild Oats was a good one, the timing of the purchase in a bad economy made Whole Foods overhaul its financial performance. They had to reduce new store openings, pay to back out of signed leases, and suspend quarterly dividend payments indefinitely. 8. John Mackey’s internet postings were extremely unethical.

Touting his own company’s stock is not a common practice you expect from a CEO, but making inappropriate comments about his rivals such as Wild Oats was an action that would not pass the test of moral scrutiny. When Mackey’s ethics were called into question by the FTC and the SEC, it was disappointing to learn that the courts allowed the acquisition of Wild Oats. Unfortunately, what is morally incorrect is not always illegal. The company’s board of directors should have asked Mackey to stop his internet postings and blogs all together after this incident. A more recent controversy is Whole Foods obtaining food from China.

Even though the website and Mackey’s blog explains why they continue to buy from China, the consumers are protesting. Management needs to sit up and take notice because people have come to put their trust and loyalty into this company and they feel they are being lied to and cheated. Once the consumer starts to lose the trust in this company, it will negatively affect Whole Foods financial performance. 9. Whole Foods management needs to keep the consumer focused on the healthier life style and the healthier environment to take the company through the recession.

They also need to do whatever is possible to maintain the personal attention of each customer so that those customers remain loyal. Time needs to be invested in getting to know what the loyal customer actually values – the food, the good feelings or both. A study of the market needs to be done to see what products are producing more profit and focus on more of those products. Whole Foods should take a more conservative approach in opening so many new stores. They need to give the consumer their confidence back that the quality and the core values of the company will not change during a recession.

Whole Foods should vigorously contest the reopening of the FTC’s challenge to the Wild Oats acquisition. It is the FTC’s function to make sure that mergers and acquisitions would not hurt other competitors in the business and increase prices. With the larger competitors offering the same natural and organic food at lower prices, Whole Foods has lost the tight hold it once had in the marketplace. The current economy has worsened the situation and as a result their stock is down. In a round about way, the FTC has already won in keeping the prices down, if indeed, that is their goal.


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