Whole Foods Case Study

Case Study: Whole Foods Market

 Source Authors: Patricia Harasta, Alan N. Hoffman 1993

1. What about related products?

Whole Foods products mainly consist of two types. Natural and organic food.  Natural is in Whole Foods every food which is free of growth hormones or other artificial substances like antibiotics. Organic food refers to fulfilled standards by U.S. Department of Agriculture from year 2002. Also almost all of Whole Foods range of goods is delivered form local farmers. The market mainly focuses on safety and quality of all offered food.  As other products we can point out loyalty cards, gift cards, vouchers, cooking books or events organized in shops like yoga Sunday and other similar events which are attracting customers.

1. What of the general environment segments and which factors there in are most relevant to WFM?

For Whole Foods Market are the most relevant this three type of factors:

Social Factors: Whole Foods Market is all about external social factors. As examples we can name the healthy lifestyle which is really popular nowadays.  Another social factor is people moving from countryside to cities. Both of this factors have significant effect on demands high. People who are living according to healthy lifestyle want more food from markets like Whole Foods. The moving of people to cities have a same effect because people in cities don’t have resources, place and time to grow their own organic groceries so as a result of that, they will be buying more organic food from supermarkets like Whole Foods.

Ecological Factors:  Whole Foods Market is company which is based on organic and natural products. Because of that is company vulnerable to climate changes or natural disasters. If something like that happen it can destroy part of Whole Foods supply. In that case the WFM could be in situation in which will be unable to satisfy a demand. That can lead to higher prices followed by decrease of customers.

Legal Factors: Because of Whole Foods natural base of business there is a lot of law to follow to maintain certain quality and reputation. Mostly the regulations, monitoring or evolutions of food by U.S. Department of Agriculture. The main effect on company is spending more money to fulfil the orders from authorities.

1. In which industry does WFM compete and what are the dominant characteristics of this industry?

Whole Foods Markets compete in supermarket industry. The dominant factor which drive customers to supermarkets is low price and convenience. Main characteristics of industry are low margins and continuous downward pressure on prices. As tool for this price pressure supermarkets uses coupons, weekly specials and reward cards. Other important characteristics is presence of certain services such as banks, coffee shops, pharmacies and other near the supermarket or even better inside the building in front of entrance to shopping area of the store.

1. Is this an attractive industry in which to Compel (Porter)?

It is an attractive industry for big players because it is dominated by huge corporations.  But even for these companies it is hard to compete. There is a lot of types of supermarkets of different types and thinking of people is always changing. In addition, supermarkets now face additional completion from wholesalers such as Costco, BJ`s and Sam`s Club.

1. What factors are critical to the success of WFM?

The most critical factor for Whole Foods success it the setup of organic grocery stores. Setup of store is made from research according to needs of local communities. Another critical factor is quality of food which is ensured by precise control from company and even from authorities.