Essays on Strategic Management-Whole Foods Market Case Study

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1) Whole Foods’ business strategy is founded upon focused differentiation, necessitating a highly precise identification of its consumer segment, innovation and the creation of value, ultimately incited by the imperatives of generating and maintaining customer satisfaction. (2) Whole Foods is capitalising on the consumer market’s concern over the potential health risks associated with the consumption of foods with artificial additives and/or chemicals. The said concern has instigated a trend towards organic foods. Insofar as Whole Foods is concerned, this undoubtedly represents a market opportunity and strength. It is an opportunity because it implies that the market for organic foods may undergo an expansion as the said concern increases.

It is a strength because Whole Foods is, in essence, a company which specialises in the production, manufacture and sale of organic foods, as indicated in its corporate slogan. Proceeding from the above stated, it must be emphasised that Whole Foods is operating within the confines of a highly competitive market. Whether as regards its operations in the USA, UK or elsewhere, the food and beverages’ market is intensely competitive and, more often than not, leaves little opportunity for new entrants unless they are highly innovative.

Whole Foods is able to meet the said competition and, quite probably, retain its existing market shares for three reasons. In the first place, not only is it not a new entrant but it is a key market player with a history of credibility and customer satisfaction. In the second place, it has exhibited a continued flexibility to nascent and emergent market demands and has innovative responded to them. As indicated in its corporate website, the company understands the importance of gauging customer needs and expectations prior to their full articulation and in proactively responding to the stated.

It was with this philosophy in mind that Whole Foods transformed its shopping outlets and expanded its product range. In the third place, the company operates within a highly well defined market but one which has the potential for expansion. It does not operate in the foods and beverages market per se but in the organic and health foods market.

This means that competition is somewhat less intense than in the foods and beverages market. Within the context of the stated, it is possible to posit the claim that the company’s core competencies, which are business excellence, customer-focus and the provision of high quality products at competitive prices, have directed it towards the development of its most important strengths – proactive response to nascent market demands and innovation. These strengths, as has been earlier stated, lead to the creation of market opportunities. The above stated does not imply that Whole Foods does not face any challenges or threats.

There is little doubt that its competitors function as a threat to its existing market shares and that offshore producers act as an added threat. Even while conceding to the fact that globalisation has expanded the range of market opportunities available to Whole Foods, globalisation has also expanded the range of threats it confronts, especially from overseas producers who have much lower production and manufacturing costs. Another threat, of course, lies in the health scares that the food market often finds itself enveloped it.

A review of Whole Foods’ corporate website indicates that at least a dozen of different products were recalled last year and while none were for any serious reason and some for label misprints, the fact is that the possibility exists. That possibility, alongside food scares such as Mad Cow Disease and Bird Flu, constitute threats to the company.

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