Whole Foods Market is an organic and natural foods supermarket chain. As of 2009, it operated 289 stores across North America. While Whole Foods differentiates itself through its high-quality organic and natural products, it faces increasing competition in this space. To maintain its leadership position, the company's strategy focuses on expanding its store base internationally and introducing lower-priced store concepts while continuing to emphasize its strong brand and mission.

1. WHOLE FOODS MARKET
2010 How to grow
in An Increasing
Competitive
Market?

2. INTRODUCTION
Whole food market is a supermarket that only specialize in natural and organic
goods.
Is also one of the largest natural food stores in the world.
As of 2009 it has a total of 289 which are 273 stores in 38 states of USA, 5 in
UK and 6 in Canada.
Attract customers wanting to live a healthier lifestyle and environmentally
conciseness.
The current CEO is John Mackey.
Head quarters Downtown Austin, Texas.
Natural refers to food that is free of growth hormone or antibiotics.
Certified organic is categorized as the US department of Agriculture defines it .

3. Background History
• John Mackey first opened “Safer Way” store in Austin, in 1978.
• When Mr. Mackey saw the unmet demand for natural and organic
products, He joined his force with Craig Weller and Mark Skiler who
were the owners of of “Clarkville Natural Grocery” to create Whole
Foods Market.
• This joint venture took place in Austin, Texas in 1980 resulting in a
new company a single natural food market with a staff members of
nineteen.

4. Cont.
• When Whole Foods start to grow, it start to merge , open new stores and
acquisition of different companies like
 Allegro Coffee in 1997
Pigeon Cove (seafood processing ) in 1996
Produce Field Inspection Office and Select Fish (also sea food processing )
in 2003.
 The last two purchases make the company the only supermarket to have
it’s own and operate a waterfront seafood facility.
 Wild Oats in 2007
The ownership right of Wild Oats has given Whole Foods the right of being
leader in the market by adding 70 new stores.

5. Cont.
• In 2008 , the store began to have unsteady movement
towards it’s goal.
• For the first time in 29 - years of history Whole Food
reported negative same - store sales in the quarter ended
December as the commodities in the store began to fell.
• Whole Foods has been named for 13 consecutive years as
one of the “100 Best Companies To Work For “ in America by
Fortune Magazine.
• In 2009 the sales was $ 8 billion.

6. SWOT ANALYSIS
INTERNAL ENVIRONMENT
Strengths
 Strong Brand Recognition
 Organic, High Quality Standard
 Organizational Structure and culture
 Strong Workforce
 Customer Loyalty
 Good Access to Target
Market(location)
 Focused on Growth Strategy
Weaknesses
 Premium Price ( Usually High)
 Low International Diversification, High
concentration only in USA Market
 Small amount of Advertisement (Word
of Mouth)
 Only selling Organic Products
 Target Small Amount of Shoppers

7. SWOT ANALYSIS
EXTERNAL ENVIRONMENT
Opportunities
 Market Leadership In High Demand
Segment
 Increasing Demand of Organic
Products
 Increase international expansion to
Abroad Like Europe and Asia
 Online shopping Delivery service
 The Green Movement
 365 stores
Threats
 Increasing Direct Competition
 Issues with Advertising
 Change in the Economic Conditions
 Change in Government Regulations
 Having The Nickname “Whole
Paycheck”

8. SWOT ANALYSIS
SWOT MATRIX
• S-O strategy
Strength- Organizational Structure and Strong work force
Opportunity- Increase International Expansion
→This can increase profitability
→Whole Foods will learn different countries strategies,
which open to new experience.

9. SWOT ANALYSIS
SWOT MATRIX
• S-T Strategy
• Strength-Strong Brand Recognition
• Threat - Increasing Direct Competition
The Strong Brand Recognition gives Whole Foods the ability to
be leader and powerful in this category of the business.
Having Direct competition will make Whole Foods to work
harder to have a sustaniable market share and profitablity.

10. SWOT ANALYSIS
SWOT MATRIX
• W- O strategy
• Weakness - Premium Price (High)
• Opportunities -365 stores
This 365 stores are Whole Foods Sub- stores which are
available to people who wants Organic Foods with
lower price.
This will give Whole Foods to have more customers
who are in the average income level.

11. SWOT ANALYSIS
SWOT MATRIX
• W- T strategy
• Weakness - Only selling Organic foods
• Threats- Increasing Direct competition
Whole Foods weakness is one of it’s main reason for
having strong brand recognition, but having
competitors who sell both organic and inorganic gets
more customers and income .

12. Corporate Level Strategy
The Mission and Goal
• “Whole foods market uniquely mission driven: the company is highly
selective about what they sell,dedicated to the stringent quality
standards committed to sustainable agriculture. They believe in a
virtuous circle entwining the food chain between human beings and
mother Earth, each is reliant upon the other through a beautiful and
delicate symbiosis.”
Whole Foods Market emphasis on high quality in this point of it’s
mission statement as “highly selective about what they sell” and
“dedicated to the stringent quality”

13. cont.
• “uniquely mission driven “ shows that how there organizational
structure and strong workforce are in this together.
• Preservation and sustainably are followed while providing a high
quality of goods to the customers and high profit to the investors.
• Whole Foods uses related diversification , which are supporting the
core business activity of Whole Foods which are coffee processing
and seafood manufacturing.

14. Business Level strategy
•The generic strategy that Whole Foods Market uses is
Differentiation.
• Differentiation - is a type of business level strategy working by
Giving and providing Unique services and products by charging
high premium price for it .
• Whole Foods sells only Self-Placed Standardized High Quality
Organic and Natural Products to Customers who are willing to
pay the Premium price for it.

15. Five Force Analysis
Porter’s Model
THREAT OF NEW ENTRANTS(HIGH)
 Low entry barrier
 Moderate cost of doing the business
 Great access to distribution network
 Being highly easy to operate the business
THREAT OF SUBSITUTES(HIGH)
 High available of substitute products
 Lower cost of substitutes
 Low switching cost
 Raised awareness of healthy diet
INDUSTRY COMETITORS / RIVALRY AMONG EXISTING FIRMS (HIGH)
 High numbers competitors
 High aggressiveness of firms ( in price, quality and service)
BARGAINING POWER OF BUYERS(MODERTE)
 Low switching cost
 Small Volume of Individual Purchase
 Quality of information
BARGAINING POWER OF SUPPLIERS(MODERTE)
 High numbers of suppliers
 Large size of Individual suppliers
 Moderate Level of Supply

16. Business level Strategy
Differentiation Strategy
Product level : Natural, Healthy,Fresh and Organic
 It is the first certified organic grocery store by US Department of
Agriculture in USA
Having “365 Everyday Value” brand which gives high quality products
and services with affordable price.
Service Level : Excellent and Unique
 The store is divided in to different departments with there own
teams with one team leader and eleven employees , which take a
special training about the department that they serve , which also
includes in-store chefs.

17. Cont.
Also provide “take action food center” like
• Wine testing
• Diet plan
• Food sampling
• help with recipes.....e.t.c
by this and other reasons Whole foods is known for it’s excellent
customer service.

18. Business Level Strategy
Functional strategy
• Whole foods is one of those companies who have strong
work force and open organizational structure and culture
which is the base for it’s superior efficiency which decrease
the threat of rivalry among firms.
• As it is said before Whole foods is a company which is based
on having organic and high quality product. This can
decrease the threat of substitutes and the threat of new
entrants to the market

19. Structure and Control system
Vertical Differentiation
The hierarchy system and control.
• Whole foods encourages a team based environments
allowing each store to make independent decisions regarding
it’s operation .
• It have a very decentralized power and it is so easy to control
because departments are classified by the department
teams.
• Teams contain eleven employees with one team leader .
• The store manager is referred as the “Store team Leader”.
• Each store employs any where form 72 to 391 team
members.

20. Cont.
Horizontal differentiation
1 . Function strategy
 The function strategy of whole foods based on location.
 The setup or the location that Whole Foods chooses is the place
where most people are literate and top statically metropolitan areas.
 The location is where they accept products and and resale them.
 Whole Foods accepts products form national and local retailers to
have more uniquely fresh organic products and can get discount from
the supplier.

21. Cont.
Horizontal Differentiation
Product strategy
The Product strategy that differentiate Whole Foods is the base for
being unique and known.
The product differentiation is made up on the base of being Organic
and Natural products only .
As it is stated in the Introduction
Natural refer to food that is free form any growth hormone.
Organic is as classified as the USDA defines it , as 95%of ingredient
should be fulfilled.

22. Cont.
• Managers are rewards in different kinds of rewards like EVA which
is Economic Value Added bonus and is also eligible to receive stock
option.
• It is motivating enough to keep the employees work there.
• The Company is using the right structure and control system.
• This is why Whole Foods is listed on “100 Best companies to work
for “ for 13 years in America by Fortune Magazine.
• The Quality of products can be meet by other competors so it
needs constant re-evaluation and change for better performance

23. Recommendation
1) Expand Service and Product to other countries.
2) Having Contract with different service providers to make some new
changes. example service delivery.
3)Community outreach example more on the Green Movement.
4) Lowering Price
5)Increase Advertising

24. St. Mary’s University
• Strategic Management Assignment
About
Case Study 2 Whole Foods Market
prepared by
1. Betelhem Debru
2.Fiker Anteneh
3.Maedot Negussie
4. Mahlet Sentayew
5.Robel Girma