Whole Foods is the leading natural and organic supermarket, founded in 1978. It has grown to 264 stores in the US, 6 in Canada, and 5 in the UK, with $6.6 billion in annual revenues and 50,000 employees. While Whole Foods has strong brand recognition and product quality, its growth has been relatively slow and it faces threats from competitors expanding into organic products. The document analyzes Whole Foods' internal strengths and weaknesses as well as external opportunities and threats, and recommends the strategic plan of expanding into new markets through market development to address its weakness of being concentrated in the US market and pursue opportunities for growth.

1. By M Amir Mujtaba

2. Introduction
 Whole foods is the world leading natural
and organic supermarket. It offers variety
of products.
 John Mackey open Saferway store in
1978, Merged with Clarksville Natural
Grocery in 1980 as a result World Foods
is formed.

3. Cont…
 Having 264 stores in US, 6 in Canada and
5 stores in UK
 A third of its existing square footage
derived from acquisition
 World foods have 50,000 employees with
$ 6.6 Billion of revenues
 Head Quarter is in Austin, Texas, Current
CEO is John Mackey

4. Internal and External Analysis

5. SWOT Analysis
Strengths






Brand Recognition
Good Quality
Huge selection/variety
Positive Employee Environment
Large, customized stores
No. 16 on Fortune’s World’s Most
Admired Companies list
Weaknesses
 Concentrated just on US market
 Relative Slow Growth
 Limited number of suppliers
 Advertising Budget is very low
Opportunities
 Expansion
 Consumer Health Benefits
through media
 Emphasis on organic farming
Threats
 Supermarkets introducing organic
products
 Increasing inflation
 Low spend per trip due to higher
prices

6. Internal Factor Analysis (IFE)
Key Internal factors
Weight
Rating
Weighted
Score
Strengths
•Brand Recognition
•Good Quality
•Huge selection/variety
•Positive Employee Environment
•Large, customized stores
•No. 16 on Fortune’s World’s Most Admired
Companies list
0.12
0.15
0.10
0.08
0.10
4
4
4
3
4
0.48
0.60
0.40
0.24
0.40
0.05
3
0.15
•Concentrated just on US market
•Relative Slow Growth
•Limited number of suppliers
•Advertising is Budget very low
0.15
0.05
0.10
0.10
1
2
1
2
0.15
0.10
0.10
0.20
Total
1.00
Weaknesses
2.82

7. Interpretation (IFE) Matrix
The company IFE score is 2.82 which is above the
average score 2.5. It indicates that the company is
internally very strong, if the company use its strength
effectively it will minimize the weaknesses of the
company.

8. External Factor Evaluation (EFE)
Key External factors
Weight
Rating
Weighted
Score
Opportunity
•Expansion
•Consumer Health Benefits through media
•Emphasis on organic farming
0.25
0.20
0.15
4
2
3
1.0
0.40
0.45
•Supermarkets introducing organic products
•Increasing inflation
•Low spend per trip due to higher prices
0.15
0.15
0.10
4
3
2
0.60
0.45
0.20
Total
1.00
Threat
3.10

9. Interpretation (EFE) Matrix
The EFE total score is 3.10 which is above the average
score of 2.5, indicate that the company is replying in an
excellent way to current possibilities and risks in its
industry. In other terms, the company's techniques
successfully take advantage of current opportunities
and reduce the negative effects of exterior risks.

10. CPM
(COMPETITIVE PROFILE
MATRIX)

11. CPM
Critical success factor
weight
Whole Foods Market
Trader Joe's
Rating
Score
Rating
Score
Brand Recognition
0.20
4
0.80
4
0.80
Product Quality
0.13
4
0.52
4
0.52
Management
0.10
2
0.20
4
0.40
Price Competitiveness
0.15
2
0.30
3
0.45
Financial Position
0.15
2
0.30
3
0.45
Customer Loyalty
0.15
3
0.45
4
0.60
Global Expansion
0.12
2
0.24
2
0.24
Total
1.0
2.81
3.46

12. Interpretation (CPM)
The Competitive Factor Evaluation Matrix reveals that
Whole foods is only partially positioned against its
competitor Trader Joe’s. Shoppers spent only few
dollars at Whole Foods while shopper spent more
dollars in nearest competitor because whole foods
prices are high. They have to provide high quality on
low cost and fresh foods in order to maintain its
profitability.

13. Problems

14. Minor Problems
 Expand into smaller area where
population have low income
 Focus on niche market
 Less number of Suppliers as compare to
competitors, results low growth
 Advertising Budget is very low

15. Major Problem
Decision Making
Whole foods management is acquiring small
competitors and building new stores, through which
their business is only expanding in US, Management
is not taking decision to expand their business in UK
and Canada.

16. Alternative Strategies

17. Strengths - S
TOWS
MATRIX
1.
2.
3.
4.
5.
6.
Opportunities – O
1. Expansion
2. Emphasis on organic
farming
3. Consumer Health
Benefits through media
Threats – T
Supermarkets
introducing organic
products
2. Increasing inflation
3. Low spend per trip due
to higher prices
Brand Recognition
Good Quality
Huge selection/variety
Positive Employee
Environment
Large customized stores
No. 16 on Fortune’s World’s
Most Admired Companies list
Weakness – W
1. Concentrated in US
2. Relative Slow Growth
3. Limited number of
suppliers
4. Advertising Budget is very
low
SO – strategies
WO – strategies
(S1,O1)
(S2.O3)
(W2,O1)
(W3,O2)
ST – strategies
WT – strategies
(S1,S5,T1)
(W1,T1)
(W3,T3)
1.

18. Interpretation
(S1,O1): Whole foods have to expand their market. Its an opportunity for them
because their brand is highly recognized if they enter into another market it
will be beneficial( Market development)
(W2,O1): Whole foods have the opportunity to enter into another market by
doing this they can overcome their weakness (Market Development)
(S1,S5,T1): Whole foods have recognized products and large number of stores
in US they have to advertise their products in different ways to attract their
customers. They should announce shopping incentives. Threat will be
overcome by doing this. (Market penetration)
(W1,T1): Whole foods can overcome its weakness and threat by expanding its
Market from US to other Markets.( Market Development)

19. Internal Strategic Position
External Strategic position
Financial Strengths (FS)
Environmental Stability (ES)
Return on Investment
leverage
Liquidity
Earning per share
Total
Average
+3
+2
+2
+3
+10
+2.5
Price range of Competing products
Competitive pressure
Price elasticity of demand
Total
Average
Competitive Advantage (CA)
Market Share
Product Quality
Customer Loyalty
Control over suppliers
Total
Average
-3
-4
-3
-10
-3.3
Industry Strength (IS)
-3
-2
-2
-4
-11
-2.75
Growth Potential
Profit Potential
Financial Stability
Productivity, capacity utilization
+3
+3
+2
+4
Total
Average
+12
+3

20. FS
+7
Conservative
Aggressive
+6
+5
X-axis =CA + IS
+4
= -2.75+(3)
+3
= 0.25
+2
+1
+1
CA
+2
+3
+5
+6 +7
IS
-7 -6 -5 -4 -3 -2 -1
-1
Y-axis = FS + ES
-2
= 2.5+(-3.3)
-3
=-0.8
-4
-5
Defensive
Competitive
-6
-7
ES

21. Interpretation
 According to the space matrix score HP falls in the
“Competitive Quadrant” . Strategies they can apply are
They can focus on Market development because they are
facing very tough competition in US market and they are
having only few stores in the foreign markets
They can also use Market penetration and use some
different advertisement methods to attract customers.

22. IE
(INTERNAL-EXTERNAL
MATRIX)

23. IFE Total Weighted Score 2.82
EFE TOTAL WEIGHTED SCORE 3.1
4.0
Strong 3.0 – 4.0
3.0
Average 2.0 – 2.99
2.0
Weak 1.0 – 1.99
i
ii
iii
iv
v
vi
vii
viii
ix
High
3.0 – 4.0
3.0
Medium
2.0 – 2.99
2.0
Low
1.0 – 1.99
1.0

24. Interpretation
 Whole foods falls in first region of IE matrix and there
main focus will be on “GROW AND BUILD” and
strategies which whole foods has to focus on are
 Market development
 Market penetration

25. QSPM
(QUANTITATIVE STRATEGIC
PLANNING MATRIX)

26. Market
Penetration
Strengths
Weight
Market
Development
AS
Key Internal Factors
AS
TAS
TAS
Brand Recognition
.12
2
.24
4
.48
Good Quality
.15
2
.30
3
.45
Huge selection/variety
.10
2
.20
3
.30
Positive Employee Environment
.08
-
Large, customized stores
.10
4
.40
2
.20
No. 16 on Fortune’s World’s Most
Admired Companies list
.05
2
.10
2
.10
Concentrated just on US market
.15
3
.45
4
.60
Slow Growth
.10
1
.10
3
.30
Limited number of suppliers
.15
2
.30
1
.15
-
Weaknesses
Total weight
1.00
-

27. Market
Penetration
Key External Factors
Opportunities
weight
AS
Market
Development
TAS
AS
TAS
Expansion
.25
1
.25
4
1.0
Consumer Health Benefits through
media
.20
3
.60
1
.20
Emphasis on organic farming,
.15
2
.30
3
.45
Super markets introducing organic
products
.15
3
.75
4
.60
Increasing inflation
.15
1
.15
2
.30
Low spend per trip due to higher prices
.10
3
.30
1
.10
Threats
Total weight
Total Attractive Score
1.00
4.44
5.23

28. Recommended Strategy and
Plan of action
 Market Development
 Whole foods is competing in very unstable industry
and their business is almost situated in one industry, if
they face tough competition in that market so they will
have no other market to rise their profits
• They have to expand their business e in the UK and
Canada as well as in other markets, which will help
Whole foods to focus on stable market and also take
the 1st mover advantage from competitors