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Whole Foods Market

Group 1

Agenda

Presentation Components Speaker
Brief Background Jianhao
Market Presence and Planning Strategies Jianhao/ Xueer
Developing a Working Business Model Xueer
Opportunities and Threats Haozi
Whole Foods Market Competitive Advantage Haozi
Whole Foods Market Functional Level Strategies Haozi/ Peiyang
Class Questions Team
Q & A Team
Whole Foods Market Background

Jianhao

Whole Foods Market stands is the leading natural and organic foods retailer.

Has 500 food stores across the U.K., the U.S. and Canada.

The company began as “Safer Way,” in 1978.

Has grown from exclusive vegetarian foods store to the current Whole Foods Market,

It is a combination of “Safer Way” and “Clarksville Natural Grocery.”

This merger took place in Texas in 1980

Whole Foods Market owns and operates many other subsidiaries

Whole Foods Market stands out as the world's leading natural and organic foods retailer, with more than 500 food stores across the U.K., the U.S., and Canada. The company began as "Safer Way," under John Mackey, the current CEO and co-founder of Whole Foods. Since its start in 1978, "Safer Way" has grown from an exclusive vegetarian foods store to the current Whole Foods Market, which is a combination of "Safer Way" and "Clarksville Natural Grocery“ (Johnston, & Szabo, 2010). This merger took place in Texas in 1980, leading to a single natural food market with various supermarkets. Besides the supermarkets, Whole Foods Market owns and operates many other subsidiaries, which include Allegro Coffee Company formed in 1977, Pigeon founded in 1985, Select Fish, and Produce Field Inspection Office.

3

The Current News

Customers encouraged to use cashless mode of payment to help combat Covid-19 spread.

The states questions Whole Foods and Amazon’s employee's protection against Covid-19.

We are not running out of food Whole Foods assures customers.

Employees are requested by the boss to donate their salaries to sick colleagues.

Robots are preparing food

Jianhao

Whole Foods Market encourages customers to use a cashless mode of payment whenever possible as a measure towards combating the spread of Covid-19. The states questions Whole Foods and Amazon's employees' protection against Covid-19. The company has urged its customers not to worry; there is plenty of food and is not running out any time soon. The boss of Whole Foods advised employees to donate their salaries for sick colleagues. The robots are now preparing delicious food at Whole Foods Market as the company forecast to food trend in 2020.

4

Case Question 1:

What steps has WholeFoods taken inappropriately planning strategy?

Assuming WholeFoods must develop a new business model, how should they go about this?

Jianhao

5

Whole Foods Market Planning Strategy and Market Presence

Whole Foods Market represents a healthy and socially responsible lifestyle. The firm has differentiated itself from its competitors by focusing on quality.

The quality strategy allows charging premium prices for premium products.

Through this strategy, the company has built their success for the past 30 years.

There are limits to the extent a firm can succeed before a new approach is adopted so that a firm remains successful.

Jianhao

Whole Foods Market is not just a food retailer. Instead, the company represents a healthy and socially responsible lifestyle that consumers can identify with. The firm has differentiated itself from its competitors by focusing on quality that allows them to charge premium prices for premium products (Johnston, & Szabo, 2010). Through this strategy, the company has built its success for the past 30 years. However, there are limits to the extent a firm can succeed before a new approach is adopted so that a firm remains successful.

6

Corporate Level Strategy

The company aims at selling highest quality of natural and organic foods.

It practices win-win partnerships with our suppliers.

Ensures that customers satisfied and delighted.

It promotes team member happiness and growth.

The firm cares about the community and the environment.

The company’s goals are driven by zeal to set high excellence standards for retailers in the industry of food

Jianhao

The core value of Whole Foods Market is selling the highest quality natural and organic foods. They also practice win-win partnerships with our suppliers, satisfy and delight their customers, promote team member happiness and growth, and care about the community and the environment. The main goal of the company is to provide to its customer with nourishing food (Prime Savings, 2020). The company's goals are driven by the zeal to set high excellence standards for retailers in the industry of food. The high-quality products are the biggest value of the company

7

Exceptional Customer Service

Exceptional customer strategy helps the firm to gain competitive advantage in the global market.

Ensures workable leadership principles are employed.

The strategy ensures every team member operates as a leader.

leadership principles helps to facilitate;

Customer satisfaction

Improved brand reputation

Jianhao

Whole Foods Market uses its leadership principles every day, including when planning new projects and deciding the best approaches to solving problems. The company encourages every employee to operate and carry self as a leader who has the responsibility of ensuring customers are satisfied and happy with the company's products and services (Johnston, & Szabo, 2010). It is an effective strategy to gain a competitive advantage in the global market. The strategy has a positive impact on brand reputation.

8

Differentiation as a Strategy

Whole foods partners with amazon to offer excellent delivery services to its customers.

It also offers customer with:

Free delivery

Discounts

Offers organic food

The company makes sure that suppliers are well vetted for the purpose of safety and quality

Offers customized services to customers

Xueer

xueer

Whole Foods Market partnered with Amazon to offer excellent delivery of products and services to its customers. Besides, the partnerships offer other benefits to the customers, such as free delivery and discounts. The company makes sure that suppliers are well vetted for the safety and quality of the product. Whole Foods Market Company offers customized services to customers. The company offers high-quality food to customers who are purely organic at any time of the day using reliable channels like Amazon services.

9

New Business Model

Creating a successful business model involves:

Identifying a specific audience.

Establishing business processes.

Recording crucial business resources.

Developing a strong value proposition.

Determining major business partners.

Creating a demand generation strategy.

Leaving room for innovation

Xueer

For any organization to form a new business model, it has to consider establishing a comprehensive business plan as well as to determine which products to offer. Besides, it is crucial to map out the process of ongoing value for the customers. Developing a successful business model involves; Identifying a specific audience, establishing business processes, recording crucial business resources, developing a strong value proposition, determining major business partners, developing a demand generation strategy, and then leaving room for further innovation.

10

Continued

Whole Foods Market can incorporate a new model to offer more organic products at fair prices.

Can increase stores in more states offering:

Vegetables

Fruits

Fresh fish

The firm can:

Adjust prices to make its product ore affordable to many people.

Increase doorstep deliveries

Come up with attractive products

Xueer

The company can create Automated Aqua ponds Farms that produce a variety of organic foods, and fishes. It can incorporate a new model, which includes offering more organic products and adjusting prices. Whole Food Market can create more stores that offer organic foods like fruits, fresh fish and vegetables in more states it can also adjust prices to make all organic foods affordable to many people and increase doorstep deliveries to reach many customers (Tillotson, 2006). Additionally, the company can come up with products and services that will attract more customers and help expand the business to low-income communities.

11

How to implement the new business plan

Various means can be used to implement a business plan by Whole Food Market such as;

Starting farms near its major stores and in urban centers where demand is high to reduce production cost.

Utilizing the warehouse infrastructure and autonomous robots offered by Amazon.

Automating all its processes.

Xueer

Various means can be used to implement a business plan. However, that also depends on the objectives of the specific business. In this case, Whole Foods can involve the actions stated above to ensure that it makes its plan work effectively. The company can start farming near places with high demands, especially near major stores, to reduce the cost of production and transportation. The company should make good use of the warehouse infrastructure and autonomous robots offered by Amazon, and they should automate all its processes.

12

Benefits of Business Model

Whole Foods Market will be able to grow and produce its own produce.

It will reduce the cost of production.

It will offer affordable prices and cut out third party supplies

improve the image of the company,

It will control or reduce its carbon emission.

It will sustain its plan to increase its market base in low income regions as well as enable more doorstep deliveries.

Xueer

The new business model will enable the company to improve its services, product quality, and price. Whole Foods Market will be able to grow and produce its own produce. With the ability to produce its own foods, the company will also be able to offer affordable prices and cut out third party supplies that might be unreliable. Also, as a way to improve the image of the company, Whole Foods Market will be able to control or reduce its carbon emission. Whole Foods Market will sustain its plan to increase its market base in low-income regions as well as enable more doorstep deliveries.

13

Case Question 2:

What opportunities and threats can be identified through examining WholeFood in the context of the competitive forces model and competitor analysis?

Haozi

14

Opportunities and Threats

The Whole Food Market should consider the competitive forces model to help determine the Whole Foods Market’s corporate strategy.

With Whole Food Market:

Threat of New Entries is low

Threat of Substitutes is high

Suppliers Power are both medium and high

Buyers Power is both low and medium

Industry Rivalry is high

Haozi

For the Wholefood market, it should consider the competitive forces model to help determine the Whole Foods Market’s corporate strategy. For this kind of business, the threat of New Entry is low; the grocery industry is very competitive and has low-profit margins. Entering the market is difficult and costly. For the Supplier Power, it is both medium and high, whole Foods depends on the local suppliers, but at the same time, it can produce its foods. Buyer Power is both low and medium, as too much consolidation in the grocery industry offers supermarkets the power; hence buyers will pay the required amount. The threat of Substitution is high, Whole Foods is famous but highly costly, so buyers tend to lean on the local farmer's more affordable market (Tillotson, 2006). Industry Rivalry is high as Whole Foods is popular because of its natural and organic food. Since most food firms are entering joining the "organic and natural" business after Whole Foods, it can be hard for them to face stiff competition.

15

SWOT Analysis for Whole Food Market

Opportunities

Expansion to international markets

Forming mergers and alliances

Diversification (Increasing stores)

Threats

Stiff Competition

Poor Publicity

Haozi

Whole Foods Market opportunities include: the high possibility of international expansion, which gives the company diversity in its operational resources. The company is in a position of forming alliances with other companies, working with Amazon to offer better distribution and other benefits to customers.

Whole Foods Market risks facing several threats; the company faces the risk of Poor Publicity; high prices are still a challenge, which makes many customers shy off from buying the firm's produce (Whole Foods Market SWOT Analysis & Recommendations, 2017). Whole Foods Market faces the threat of low-cost competition from firms like Walmart, which attracts consumers based on low prices. Not only do they compete in the standard supermarket industry, but they have even begun offering natural and organic products its Supercenter stores. In addition, an increasing number of organic and health food retailers are starting to offer lower prices, which could shift consumers away from Whole Foods Market. Trader Joe’s is also a premium natural and organic food market. By expanding its presence and product offerings while maintaining high quality at low prices, Trader Joe’s has found its competitive niche. The increasing level of competition, new companies, and existing ones can come up with better pricing and distribution strategies, which might make it hard for Whole Foods to survive without change.

16

Case Question 3:

What has created the durability of Whole Foods market presence?

What has given them their competitive advantage?

Haozi

17

Whole Foods Market Competitive Advantage

Whole Foods Market has been in the industry for a long period and successful.

The main success factors:

Low competition during its inception stage.

The Green Movement made natural foods demand increase

Strict quality standards enabled the company to succeed

Acquisition under Amazon promoted its market presence

Haozi

For question 3, What has created the durability of Whole Foods’ market presence? What has given them their competitive advantage? I would say, low competition, at its inception, gave Whole Food Market a stable beginning and entry to the market. Also, natural foods were a relatively new concept in business at the time. There were less than six natural food stores across the United States of America. The green mission, which involved reduce, reuse, recycle, and other things like food waste reduction, made the company stand out as a proponent of the movement. The company offered and still offers superior quality standards, which make it a favorite among many customers. Also, the company's acquisition under Amazon promoted its market presence.

18

Case Question 4:

What functional level strategies have WholeFoods employed?

Have these strategies been successful?

19

Functional Level Strategies

Levels of strategic management include corporate, business, and functional levels.

Under functional level strategies Whole Foods Markets has succeeded in:

Human Resource strategies

Marketing strategies

Financial strategies

What it needs to improve on:

Production strategies

Research and Development Strategies

Haozi

Now I‘m gonna talk about the functional level strategies and the strategies that Wholefood has employed. Levels of strategic management include corporate, business, and functional levels, which must all be analyzed if a company is to prosper businesswise. Under functional level strategies, the Whole Foods Markets firm has succeeded in human resource strategies, marketing strategies, and financial strategies. However, the firm needs to improve on some other strategies to lower the cost of production and encourage more growth; these strategies include; Production strategies and Research and Development Strategies

20

Human Resource strategies

Whole Foods employs a great working environment

80% of its employees say that the company offers great place to work.

Team member who is affected by the COVID-19 and gets is sick or quarantined receive up to 2 weeks of pay

Hourly employees receive additional $2/hour

There is a team Member Emergency Fund of $1.6M, and now they add up to $3.3M

Haozi

Whole Foods employs a great working environment. More than 80 percent of its employees say that the company offers a great place to work. The salary of its executive is not more than 14 times the average annual salary of any Whole Foods employee. Also, a team member who is affected by the COVID-19 and gets is sick or quarantined receive up to two weeks of pay. Hourly employees receive an additional $2/hour through April. There is a team Member Emergency Fund of $1.6M.

21

Marketing strategies

The Whole Food Market uses several means to promote the its products

Some of the mean of implementing Promotion Strategy;

The company is promoting online shopping.

Making prices affordable to a wide range of customers.

Working with Amazon to improve deliveries

Reducing prices on 500 items to 43%

Average 2.5% price reduction.

Peiyang

Whole Foods ceased its cooperation with Instacart in 2018 and began working with Amazon shipping. In 2017, the company reduced prices on 500 items to 43%, and in 2019, it reduced prices further by 2.5% on average (Whole Foods Market, 2020) The company implements its marketing strategy in various ways to gain widens its customer base and improve its competitive position. The company promotes online shopping by partnering with Amazon for deliveries after ordering online.

22

Financial strategies

Amazon subsidiary

The company became an Amazon subsidiary. This brought more shoppers into its stores.

Closing 12 subsidiary stores

The company closed some of its subsidiary stores in order to reduce its operational costs.

Peiyang

Currently, the company has over 100 million Prime members on Amazon. Foot traffic increased by 16.5% in the first quarter of 2019. After losing some of its subsidiary stores, the company majored in creating a new Whole Foods Market chain with a reduced price strategy to attract more customers. The company became an Amazon subsidiary. This brought more shoppers into its stores. The company closed some of its subsidiary stores in order to reduce its operational costs.

23

Production Strategy

Whole Foods Market needs to focus on producing its own organic foods.

This will help the company:

Produce affordable foods

Distribute its products effectively.

Control the inputs thus reducing the cost of production.

Customize the production to suit the customers’ needs

Peiyang

With a sustainable production strategy, Whole Foods Market can make decisions that will enable efficient output in the production system to meet customer requirements. Whole Foods Market needs to concentrate on producing its own organic foods. This will help the company produce affordable foods and also distribute its products effectively (Whole Foods Market, Inc. | Company Profile, 2020). The production strategy of any organization is very key as it moves. It affects nearly all the other areas and departments as it determines the quality and pricing.

24

Research and Development Strategies

Through research;

Whole Foods Market will be able to make its products much better.

It will also be able to make its production easy by creating cheaper ways of producing more products.

To enable effective development, the firm needs to research more on its markets to determine what is best for the consumers

Peiyang

Whole Foods needs to research the best ways to produce organic foods such as fresh fish, fruits, and vegetables. It has to determine the best inputs required for effective production. Also, to enable effective development, the firm needs to research more on its markets to determine what is best for the consumers (Whole Foods Market | History & Facts, 2019) Through research, Whole Foods Market will be able to make its products much better. It will also be able to make its production easy by creating cheaper ways of producing more products at a low cost.

25

Summary

Whole Foods Market stands is the leading natural and organic foods retailer and has 500 food stores across the U.K., the U.S. and Canada

The firm has differentiated itself from its competitors by focusing on quality

The company partners with Amazon for better service deliveries

They also practice win-win partnerships with our suppliers, satisfy and delight their customers, promote team member happiness and growth and care about the community and the environment

The company is using various strategies to implement its business model.

Robots are preparing food

Peiyang

Whole Foods Market stands are the leading natural and organic foods retailer and have 500 food stores across the U.K., the U.S., and Canada. It represents a healthy and socially responsible lifestyle. The firm has differentiated itself from its competitors by focusing on quality. The core value of Whole Foods Market is selling the highest quality natural and organic foods. They also practice win-win partnerships with our suppliers, satisfy and delight their customers, promote team members' happiness and growth, and care about the community and the environment. The company is using various strategies to implement its business model—the company partners with Amazon for better service deliveries. Robots can be used to prepare food.

26

Thanks for Listening & Any Questions?

27

Quiz Time!!!

Question 1

What does Whole Foods Market do?

a Sell natural and organic foods

b Sell Fish

c Produce vegetables

d Support Amazon

e none of above

Xueer

29

Question 1

What does Whole Foods Market do?

a Sell natural and organic foods

b Sell Fish

c Produce vegetables

d Support Amazon

e none of above

Xueer

30

Question 2

In which year was Whole Foods Market founded?

a 1978

b 1966

c 1998

d 2019

e 1976

Xueer

31

Question 2

In which year was Whole Foods Market founded?

a 1978

b 1966

c 1998

d 2019

e 1976

Xueer

32

Question 3

Which company of the following is a partner to Whole Food?

a Amazon

b Walmart

c Tesla

d all of the above

e none of the above

Haozi

33

Question 3

Which company of the following is a partner to Whole Food?

a Amazon

b Walmart

c Tesla

d all of the above

e none of the above

Haozi

34

Question 4

How many stores does Whole Foods Have?

a Less than 100

b More than 500

c Exactly 500

d About 406

e 600 stores

Haozi

35

Question 4

How many stores does Whole Foods Have?

a Less than 100

b More than 500

c Exactly 500

d About 406

e 600 stores

Haozi

36

Question 5

How will a new business model help Whole Foods grow?

a Use the ability to produce its own food to cut prices.

b Use the ability to produce its own food to eliminate middlemen.

c Use the ability to produce its own food to produce more organic foods.

d All of the above.

e None of the above.

Peiyang

37

Question 5

How will a new business model help Whole Foods grow?

a Use the ability to produce its own food to cut prices.

b Use the ability to produce its own food to eliminate middlemen.

c Use the ability to produce its own food to produce more organic foods.

d All of the above.

e None of the above.

Peiyang

38

Question 6

For how many years has Whole Foods Market been in the industry?

a Less than 10 years.

b More than 10 years.

c 20 years.

d 5 years

e More than 30 years.

Peiyang

39

Question 6

For how many years has Whole Foods Market been in the industry?

a Less than 10 years.

b More than 10 years.

c 20 years.

d 5 years

e More than 30 years.

Peiyang

40

References

Johnston, J., & Szabo, M. (2010). Reflexivity and the Whole Foods Market consumer: the lived experience of shopping for change. Agriculture and Human Values, 28(3), 303–319. https://doi.org/10.1007/s10460-010-9283-9

Prime Savings. (n.d.). Whole Foods Market. Retrieved June 11, 2020, from https://www.wholefoodsmarket.com/amazon

Tillotson, J. (2006). Whole Foods Market. Nutrition Today, 41(2), 67–69. https://doi.org/10.1097/00017285-200603000-00006

Whole Foods Market. (n.d.). Forbes. Retrieved June 11, 2020, from https://www.forbes.com/companies/whole-foods-market/#6010c99434df

Whole Foods Market | History & Facts. (2019). In Encyclopædia Britannica. https://www.britannica.com/topic/Whole-Foods-Market

Whole Foods Market, Inc. | Company Profile | Vault.com. (n.d.). Vault. Retrieved June 11, 2020, from https://www.vault.com/company-profiles/retail/whole-foods-market-inc#:~:text=Whole%20Foods%20Market%20is%20the

Whole Foods Market SWOT Analysis & Recommendations - Panmore Institute. (2017, January 31). Panmore Institute. http://panmore.com/whole-foods-market-swot-analysis-recommendations