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Whole Foods Market: A Strategic Analysis

4703 words - 19 pages

Whole Foods Market: A Strategic Analysis

Adrienne Lee Richard Linowes Spring 2009 General University Honors



WHOLE FOODS MARKET: Strategic Company Analysis

EXECUTIVE SUMMARY Whole Foods Market, Inc. has long been admired as an innovative company with quality standards, a devotion to community and environmental responsiveness, a healthy growth model and highly-regarded employment practices. However, the company has faced recent difficulties as a result of the economic recession, increasing competition, and complications from acquisitions. To revitalize the company from historical lows in its toughest year in history, Whole Foods Market must reassess its costs, ...view middle of the document...

Since its opening in 1980, the company has maintained the strictest quality standards in the industry and an unshakeable commitment to sustainable agriculture.



WHOLE FOODS MARKET: Strategic Company Analysis

The company’s Core Values are: • • • • • • Selling the Highest Quality Natural and Organic Products Available Satisfying and Delighting Our Customers Supporting Team Member Happiness and Excellence Creating Wealth Through Profits & Growth Caring about our Communities & Our Environment Creating ongoing win-win partnerships with our suppliers

Whole Foods defines its mission in terms of “Whole Foods, Whole People, Whole Planet,” incorporating the highest quality, least processed, unadulterated foods with a decentralized, self-directed team culture and a commitment to helping to take care of the world through active support of organic farming and assisting its global neighbors through its Whole Planet Foundation’s micro-lending operations and support food banks, neighborhood event sponsorships and donations to local non-profit groups. Overall, the company’s community giving well exceeds 5% of its total net profits each year.1

Innovation and experimentation occur at the store level, as managers are permitted to choose up to 10% of store items, allowing stores to cater to local tastes and availability.2 While the average Fortune 500 CEO makes 431 times the pay of the average worker, no Whole Foods Market executive makes more than 19 times the average worker’s salary under the company’s pay cap. Whole Foods Market's “no secrets” management philosophy makes
1 2

“About Whole Foods Market.” Lubove, Seth. “Food Porn.” Forbes. New York: Feb 14, 2005. Vol. 175, Iss. 3; pg. 102.



WHOLE FOODS MARKET: Strategic Company Analysis

all financial data and salary information freely available all of its employees; the SEC lists all 54,000 employees as insiders. Whole Foods Market has also received an array of awards for their business practices, including a #22 ranking in Fortune’s 2009 list of “100 Best Companies to Work For,” and is one of only 13 companies to rank each year since its inception 12 years ago.3 The company was also recognized as Health Magazine’s healthiest grocery store of the year, and once again made Fortune’s list of “America’s Most Admired Companies.” Among the Food and Drug Stores category, Whole Foods is ranked #1 in innovation, social responsibility, and quality of products.4 ORGANIC/NATURAL FOOD INDUSTRY The organic/natural segment is one of the three major retail market categories in the specialty food industry, along with specialty/gourmet and vegan. Sales of natural products grew to approximately $62 billion in 2007, a 10% increase over the previous year. 5

Over the past decade, consumer awareness and demand for organic food and beverages has increased, with insistence on a wider variety of organic food in local grocery stores. The increasing popularity of organic food is...

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