Whole Foods Market 2007

8/10/2019 Whole Foods Market 2007

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Running head: LESSON 6 CASE STUDIES1

Case analysis on: Whole Foods Market: 2007

Will There Be Enough Organic Food to Satisfy the ro!ing "e#and$

Submitted by: Bikram ra!aati

"ing#$ %&''ege

Internati&na' Ameri%an Uni(er$ity

BUS )*+: Bu$ine$$ $trategy

Submitted t&: "ir$hna khana' , -iang Bi$%an

Date: +./ + */ 0+1



LESSON 6 CASE STUDIES0

%&stract

The 2&under and CEO &2 3h&'e 2&&d$ 4&hn 5a%key $tarted hi$ entrereneuria'

eerien%e 2r&m $ing'e $t&re in 1*7.8 9h&'e &&d$ 5arket be%&me$ the 3&r'd#$ retai''eader in 0++7 in the natura' and &rgani% 2&&d indu$try/ 3ith 1*; $t&re$ in the U8S8/

Canada and the United "ingd&m8 C&many a%%eted a%<ui$iti&n $trategy8 =e b&ught

ri(a' 9i'd Oat$ 3ith it$ 1++ $t&re$ 0 $treet$ in the U8S8 and Canada8 The %&many

hi'&$&hy i$ >3h&'e 2&&d$ market (i$i&n &2 $u$tainab'e 2uture by r&(iding hea'thy and

natura' &rgani% 2&&d8 It ha$ &3n (i$i&n and mi$$i&n/ 3h&'e 2&&d$ %&ntinua''y imr&(e$

&22ering$/ %atering t& it$ $e%i2i% '&%ati&n8 There are u$ing '&3 %&$t $trategy a'&ng

dem&grahi% di$tributi&n $trategy8 9h&'e 2&&d$ en%&urage team ba$ed e22&rt and r&(ide

the training and de(e'&ment r&gram t& de(e'& em'&yee %&meten%ie$/ %&many

attemt$ t& $hare the %u$t&mer their entire eerien%e8 They are a'$& targeting the h&u$e

3i2e 3h& d&e$n#t ha(e a time t& %&&k8 They are r&(iding the %&&ked 2&&d and their

&erati&n <ua'ity i$ a%%&rding t& the 'a38 They eand bu$ine$$ in (ari&u$ $e%t&r8 4&hn

5a%key/ CEO &2 3h&'e 2&&d$ ha$ $et an ambiti&u$ gr&3th target &2 ?10 bi''i&n in re(enue

and &(er ;++ $t&re$ by 0+1+8 The %ha''enge 2&r 5a%key and 9h&'e &&d$ i$ t& a%hie(e

the$e target$ 3ith&ut $a%ri2i%ing <ua'ity and their %urrent reutati&n8



LESSON 6 CASE STUDIES;

Whole food #ission and strategy:

9h&'e 2&&d market i$ the 3&r'd#$ 'eading retai'er &2 natura' and &rgani% 2&&d$8 It

remain$ uni<ue'y mi$$i&n dri(en/ they be'ie(e &n r&(iding high <ua'ity 2&&d and%&mmitted t& $u$tainab'e agri%u'ture8 9h&'e &&d$ 5arket#$ hi'&$&hy %enter$ &n

$u$tainabi'ity and harne$$ing human and materia' re$&ur%e$ 3ith&ut de(a'uing the

>integrity &2 the indi(idua' &r the 'anet#$ e%&$y$tem$8@ They r&(ided the $tandard

<ua'ity 2&&d and they $tri(e t& engage in ethi%a' bu$ine$$ ra%ti%e$ and r&(ide their

em'&yee$ 3ith a m&ti(ati&na' and re$e%t2u' 3&rk en(ir&nment8 The %&many

hi'&$&hy dri(e$ the $trategy &2 the 3h&'e 2&&d they ne(er %&mr&mi$e in the <ua'ity &2

the 2&&d8 They eand their bu$ine$$ 2r&m dry g&&d t& eri$hab'e r&du%e in%'uding

meat$/ 2i$h and reared 2&&d$8

The $etu &2 the &rgani% gr&%ery $t&re i$ a key %&m&nent t& 3h&'e 2&&d#$

$u%%e$$8 They are $u%%e$$ a$ they ha(e 3e'' trained and m&ti(ated $ta22/ '&%ati&n &2 $t&re/

and <ua'ity r&du%t %enter %a''ed >take a%ti&n 2&&d %enter$:@ t& %he%k the $tandard &2 the

2&&d8 They u$e a ri%e a marketing t&&'8 The %&many re'ie$ hea(i'y &n 3&rth &2

marketing $trategy8 A%%&rding t& the time there u$e$ di22erent $trategy t& r&m&te their

r&du%t and enter$ int& the di22erent $e%t&r8 They maintain g&&d re'ati&n$hi 3ith regi&na'

and nati&na' $u'ier$ $& that they %an r&(ide r&du%t &n a%%etab'e ri%e 3ith high

<ua'ity r&du%t t& a%%&m'i$h their mi$$i&n8 A$ a 'ayer in the natura' and &rgani% 2&&d$

indu$try it i$ im&rtant 2&r 9h&'e &&d$ t& ha(e a mi$$i&n that i$ in tune 3ith the nature

&2 3hat they are $e''ing8 Their m&tt& $tate$ Whole Foods, Whole People, and Whole

Planet and emha$ie$ that &n their (i$i&n that rea%he$ 2ar bey&nd !u$t being a 2&&d

retai'er8 Their $u%%e$$ in 2u'2i''ing their (i$i&n i$ mea$ured by %u$t&mer $ati$2a%ti&n/ Team

5ember e%e''en%e and haine$$/ return &n %aita' in(e$tment/ imr&(ement in the $tate

&2 the en(ir&nment/ and '&%a' and 'arger %&mmunity $u&rt Cuen''a$/ 0+1;



LESSON 6 CASE STUDIES

Co#'etiti(e en(iron#ent and changing grocery industry i#'act on !hole foods:

9h&'e &&d$ 3a$ an indu$try i&neer/ there 3a$ n& $u%h thing a$ the natura' and

&rgani% 2&&d indu$try8 There i$ 'e$$ than $i &ther natura' 2&&d $t&re in USA8 It e$$entia''y%reated the indu$try be%au$e at that time there are &n'y $i &ther natura' 2&&d $t&re$ in the

U8S8 9h&'e &&d$# main %&metit&r are Trader 4&e#$ C&8 and 3i'd &at$ market8 Trader

4&e#$ i$ u$ing '&3 %&$t 'eader$hi $trategy t& 2&und it$ %&metiti(e ni%he and r&(ide

3ide range &2 r&du%t8 T&day 3h&'e 2&&d$ ha(e many %&metit&r 'ike $t& N $h& and

Sha3#$ ha(e m&re 2'eibi'ity in their r&du%t &22ering and r&m&te r&du%t thr&ugh $a'e$

that 3h&'e 2&&d$ ne(er ra%ti%e it8 It be%&me$ $& many re$$ure 2&r 3h&'e 2&&d$ t&

remain %&metiti(e in$tead &2 that they are 2&%u$ing &n their %&re $trategy that i$

r&(iding &rgani% and natura' 2&&d$ t& %u$t&mer8 Cu$t&mer$ 3ere atr&niing $t&re$ that

2&%u$ed &n natura' and &rgani% 2&&d$ m&re than $eeking the$e item$ in regu'ar

$uermarket$ and gr&%ery $t&re$8 The a(erage indu$try gr&3th i$ ee%ted t& be bet3een

.1+ er%ent annua''y in the 2uture8 The St&re $ie$ a(erage 1+/+++ $<uare 2eet in %&ntra$t

t& an a(erage $t&re $ie &2 ;0/+++ $<uare 2eet 2&r 9h&'e &&d$8

In 1*;+#$ the $uermarket bu$ine$$ ari$e be%au$e &2 three %hange$ in the $&%iety

They are:

• The $hi2t &2 &u'ati&n 2r&m rura' t& urban area$8

• An in%rea$e in di$&$ab'e in%&me

• In%rea$e m&bi'ity thr&ugh &3ner$hi &2 aut&m&bi'e$

T&day $uermarket are are %hara%teried by '&3 %&$t margin indu$try $e''ing m&re

$u%h that ha(ing e%&n&mi%$ &2 $%a'e8 L&3 ri%e and %&n(enien%e he'$ t& %hange the 3ay

h&3 $uermarket gr&38 They are ab'e t& %&&erate 3ith the %hange$ &2 %u$t&mer

re2eren%e and ta$te/ they r&(ide hea'thy 2&&d$/ '&3 %arb&hydrate 2&&d8 5&re e(er

3h&'e 2&&d$ $u%%e$$ be%au$e they ab'e t& target dem&grahi% area/ they target the

%u$t&mer and 2&%u$ &n it8 They d& re$ear%h &n that the r&du%t are meeting the '&%a'

%&mmunity and %&n$umer $e%i2i%ati&n8



LESSON 6 CASE STUDIES)

9h&'e 2&&d$ %h&&$e their $trategy in di22erent $e%t&r ba$ed &n di22erent metri%$ n&t

&n'y dem&grahi% they $ee in%&me 'e(e'/ di$&$ab'e am&unt &2 their &tentia' %u$t&mer

edu%ati&n 'e(e'/ &u'ati&n den$ity be2&re t& eand8 A$ 3e ear'y di$%u$$ 3h&'e $h&$ i$

n&t !u$t $e''ing the r&du%t they are $e''ing entire eerien%e and ra%ti%ing the bu$ine$$ethi%a''y8

They $h&3 $&me %&r&rate $&%ia' re$&n$ibi'ity and they d& %harity8 The %&many

d&nate$ )F &2 their a2ter ta r&2it t& n&t 2&r r&2it %harity ur&$e and a'$& they maintain

the g&&d hea'th &2 their em'&yee8 4&hn 5a%key e'ain$ 3e are %hanging the $& the

e&'e %an eerien%e it8 Ge&'e are be%&me$ m&re a3arene$$ ab&ut their hea'th and they

are m&re attra%ted t& u$e &rgani% 2&&d8 C&n$umer $tarting t& u$e 2re$her and hea'thier

2&&d$8 It %reate$ ne3 market 2&r 3h&'e 2&&d$8 5&re e(er 3h&'e 2&&d eerien%ing in ne3

2ie'd that %reate be%au$e &2 3&men em&3erment 3hen 3&man g&e$ t& the 3&rk they

ha(e n& time 2&r %&&k $& 3h&'e 2&&d$ $tarting t& $e%ia'ie &n <ua$i re$taurant 2&&d$8

They de(e'&ing their marketing $trategy t& edu%ate the ub'i% &2 &rgani% 2&&d in their

'i2e$ty'e8

)ey success factor for !hole foods:

• 9h&'e &&d$ 5arket gre3 t& be the 3&r'd#$ retai' 'eader in 0++7 in the natura'

and &rgani% 2&&d indu$try/ 3ith 1*; $t&re$ in the U8S8/ Canada and the United

"ingd&m8

• 9h&'e 2&&d$ i$ mi$$i&n dri(en %&many and it$ $trategy t& eand $u&rt

mi$$i&n

• The key 2a%t&r$ dri(ing 9h&'e &&d$# $u%%e$$ are: r&du%t $e'e%ti&n and <ua'ity/

$t&re 'ay&ut and ambien%e/ em'&yee$/ and t& 'eader$hi

•The a3arene$$ &2 %&n$umer make$ the 3h&'e 2&&d$ $u%%e$$ and they are

%&ntinu&u$'y in(&'(ing t& edu%ate t& e&'e8

• The r&du%t$ it %arrie$ are %erti2ied >&rgani%@ and are &2 g&&d <ua'ity and they

de(e'&ed >take a%ti&n 2&&d %enter$@ 3h& maintain 2&&d$ <ua'ity a%%&rding t& the

<ua'ity $tandard by 'a38




• The g&&d re'ati&n$hi &2 %&many 3ith their em'&yee/ they ha(e 3e'' trained

em'&yee/ edu%ated em'&yee and they &$$e$$ kn&3'edge $& that they ab'e t&

guide em'&yee8 They u$e team ba$ed ar&a%hing t& managing it$ em'&yee8

•The eanding $trategy a$ it &3n$ 9i'd Oat$ 3ith it$ 1++ $t&re$ in the U8S8 andCanada/ &3n$ eight di$tributi&n %enter$/ $e(en regi&na' bake h&u$e$/ and 2&ur

%&mmi$$arie$ $& r&du%t di$tributi&n %hanne' i$ m&re im&rtant 2a%t&r 2&r them8

• They de(e'& and ugrade their r&du%t and make$ inn&(ati(e r&du%t a%%&rding

t& the market $ituati&n8

• The %&de &2 %&ndu%t that %&many ha(e &2 2&urteen age he' them t& 2&%u$ &n

their $trategy and maintain minimum di$%i'ine in 3&rk'a%e8

•

The g&&d re'ati&n$hi 3ith $u'y and di$tribut&r he'$ 3h&'e 2&&d$ t& 2u'2i'' thedemand &2 %u$t&mer8

• Leader$hi $ty'e and t& management team a'$& $et the $tru%ture and $y$tem$ in

'a%e 2&r the %&many#$ $trategy t& be im'emented e22e%ti(e'y8 T& be%&me

$u%%e$$8

So#e of Challenges that co#'any faced

A$ the ear'y $tage &2 3h&'e 2&&d$ in 1*7. there are 'e$$ than $i $t&re$ and there i$ n&

m&re %&metiti&n in the market8 Be%au$e &2 the aging baby b&&mer$ and %&metiti(e

market 3h&'e 2&&d$ need t& 2&%u$ &n r&du%t $egmentati&n8 They de(e'&ing the r&du%t

a%%&rding t& the market need 5a%key $et$ the &rganiati&na' %u'ture at 9h&'e &&d$

thr&ugh hi$ a%ti&n$ and the 3ay he and hi$ team ha(e $et u the $tru%ture and $y$tem$ in

the &rganiati&n8

• The market de(e'&ment and edu%ating e&'e i$ (ery di22i%u't ta$k8

• The marketing %hanne' t& a%%et &rgani% materia' 2r&m 2armer i$ (ery %&m'e

and t& maintain re'ati&n$hi 3ith them i$ t&ugh !&b8

• The te%hn&'&gy may be %ha''enge 2&r them a$ they $e%i2ied in indi22erent

r&du%t/ di22erent te%hn&'&gy 2&r di22erent $e%t&r need t& im'ement




• 5aintain a g&&d re'ati&n$hi 3ith em'&yee in %hanging en(ir&nment and

de(e'&ing re3ard $y$tem &2 EHA $y$tem i$ %ha''enging8

• On'y ; er%ent &2 U8S8 2arm'and i$ &rgani% and $& there i$ 'imited &utut un'e$$

ne3 %aa%ity i$ %reated8

• Entry &2 gr&%ery market make$ m&re di22i%u't t& 3h&'e 2&&d$

• inding rime $t&re '&%ati&n$ in it$ <ue$t 2&r gr&3th i$ a'$& a %ha''enge 2&r 9h&'e

&&d$8 The %&many '&&k$ 2&r high'y a22'uent urban area$ 3here %u$t&mer$ are

3e''edu%ated and dra3ing high $a'arie$8

• The in%rea$ed demand &2 &rgani% 2&&d ri$e the ri%e &2 ra3 materia' $& it#$

be%&me di22i%u't t& them $er(e in '&3 ri%e in ni%he market



LESSON 6 CASE STUDIES.

Conclusion:

4&hn 5a%key/ 9h&'e &&d$# 2&under and CEO 'ay$ a key r&'e at 9h&'e &&d$

$u%%e$$8 The hi'&$&hy &2 %&many thr&ugh '&%a' %&mmunity in(&'(ement he' $hae

the %u'ture at 9h&'e &&d$8 9h&'e &&d$ u$e$ the training and enthu$ia$m &2 it$

em'&yee$ and it$ $t&re 'ay&ut and ambien%e t& $u%%e$$2u''y %&mete in the indu$try8 The

%&many had re(enue$ &2 ?)86 bi''i&n in 2i$%a' 0++68 C&many ha$ $et an ambiti&u$

gr&3th target &2 ?10 bi''i&n in re(enue and &(er ;++ $t&re$ by 0+1+8

9h&'e &&d$ u$e$ a teamba$ed ar&a%h t& managing it$ em'&yee$8 The

%&many ha$ been named &ne &2 the >1++ Be$t C&manie$ t& 9&rk 2&r in Ameri%a@ by

Fortune magaine 2&r the a$t $i year$8 Additi&na''y/ *+ er%ent &2 em'&yee$ $tate that

they >a'3ay$ &r 2re<uent'y en!&y their !&b8@ 9h&'e &&d$ %arrie$ b&th natura' and

&rgani% 2&&d$ &22ering %u$t&mer$ a 3ide (ariety &2 r&du%t$8 It en$ure$ that the r&du%t$

it %arrie$ are %erti2ied >&rgani%@ and are &2 g&&d <ua'ity8 It ur%ha$e m&$t &2 the r&du%t

2r&m regi&na' and nati&na' $u'ier$8

The %&de &2 %&ndu%t that the %&many 2&rmu'ate he'$ em'&yee t& 3&rk

$m&&th'y and it in%rea$e e22i%ien%y and e22e%ti(ene$$8 The 3h&'e 2&&d$ %&many r&du%e

3ide (ariety &2 r&du%t targeting di22erent dem&grahi% market area8 They de(e'&

r&du%t a%%&rding t& the $e%i2i%ati&n &2 <ua'ity mea$urement8 E(en thr&ugh %&m'eti(e

2&r%e and high bargaining &3er &2 $u'ier and buyer 3h&'e 2&&d$ be%&me $u%%e$$

be%au$e &2 their %u'ture and $y$tem/ team 3&rk/ imr&(e r&du%t 'ine/ being

$tandardiati&n in <ua'ity/ the a%<ui$iti&n $trategy &2 ne3 (enture a'$& he'$ in gr&3ing8

The m&$t im&rtant thing that 3h&'e 2&&d$ i$ mi$$i&n dri(en %&many and their

hi'&$&hy ab&ut d&ing ethi%a' bu$ine$$ he'$ t& be number &ne in &rgani% 2&&d market8/



LESSON 6 CASE STUDIES*

Bib'i&grahy

Cuen''a$/ A8 0+1;/ eb 118 Whole Foods Case Study: A Benchmark Model of

Management For Hospitality8 Retrie(ed 2r&m

htt:,,3338h&$ita'itynet8&rg,ne3$,+)*;*68htm'

R&bin$&n/ R8 B8/ Gear%e/ 48 A8 0+118 Strategic management: formulation,

implementation and control 8 Ne3 y&rk: The 5%-ra3 =i''8

Documents

Whole Foods Market 2007