wholefood market (case no. 7)

CASE NUMBER 7
Group Members
 Aysha Khan
 Marium Vohra
 Mehak Rasheed
 Monum faizan
 Nuzhat Yasmin

OUTLINES
STEP 1 INTRODUCTION AYSHA KHAN
STEP 2 MISSION AND VISION AYSHA KHAN
STEP 3 INTERNAL ASSESSMENT MONUM FAIZAN
STEP 4 EXTERNAL ASSESSMENT NUZHAT YASMIN
STEP 5 STRATEGY FORMULATION NUZHAT YASMIN AND
MARIUM VOHRA
STEP 6 STRATEGY
IMPLEMENTATION
MEHAK RASHEED
STEP 7 STRATEGY EVALUATION MEHAK RASHEED
STEP 8 CONCLUSION MARIUM VOHRA

COMPANY HISTORY
Name Whole Foods Market, Inc
Founded 1980
logo
Brand value Natural and Organic food
Geographic areas served U.S., Canada, UK
Headquarters U.S.
motto Whole Food, Whole People, Whole Planet
Stores 275 stores(2008)
284 stores (2009)
435 stores (2016)

 John Mackey and his wife began a small natural
foods store called Safer Way and were evicted from
their apartment for storing products in it, so they were
forced to live in their store. After several mergers a
couple years later with Craig Weller and Mark Skiles,
the opening of the original Whole Foods market
began. Whole Foods expanded to Houston and
Dallas in 1988 and then into the West Coast. During
this time, the trend had caught on and other natural
food chains began opening in the Northeast. In 2007,
Whole Foods expanded into markets all across the
U.S. and into the U.K.
WFMS STORY

EXPANSION HISTORY
 1984- Whole Foods Market began its expansion.
 1989- We expanded to the West Coast.
 1990-1999- acquiring other natural foods chains throughout
the 90's.
 1998- Development of "virtual" store began.
 2000- Additional acquisitions.
 2001- Whole Foods moved into Manhattan.
 2002- Expansion into Canada
 2003-2004- Whole Foods Market entered the United
Kingdom.
 2007- Merger with Wild Oats

WILD OATS MARKET INC
 Started in boulder, Colorado in 1987.
 Acquisition due to competition
 35% market share + Wild Oats = 50% market share
 it helped WFMs to have an increase in the number of
stores and to explore new geographical locations which
obviously allowed WFMs to serve more customers.
 Acquisitions of Wild Oats was a capital and costly decision
and it can affect the financial position of the WFMs.(cons)
 This acquisitions is also against the strategy of WFMs to
have larger stores because Wild Oats stores are relatively
smaller.

PRODUCTS
Sea Food
Meat And Poultry
Specialty(beer , wine & Cheese)
Nutrition & Body Care(organic,
natural)
Floral Items
Grocery
Prepared Food (soups, canned
and packaged)
Coffee And Tea
Vitamins
Pet Products
Bakery(cakes, breads and
cookies and etc.)
Educational products such as
Books related to cooking, diets and
lifestyles
Household products

STEP 2:
VISION AND MISSION
STATEMENT

• Searching for the highest quality, least
processed, most flavorful and natural foods
• Famous at providing organic food Whole
Foods
Whole
food
• Employing people who are passionate about
healthy food and a healthy planet.
• Providing excellent customer service Whole
People
Whole
people
• Caring about communities and environment
• Sponsoring neighborhood events and Donating
to local non-profit groups Whole Planet
Whole
planet
MOTTO

‘We are selling the 100% organic and
natural products in the world.’
PROPOSED VISION

EXISTING MISSION STATMENT
“To promote the vitality and well being of all
individuals by supplying the highest quality, most
wholesome foods available.”
Customer Products/ Services Markets
Yes(individuals) Yes(healthy food) No
Technology Concern for survival or
growth
Philosophy
No No Yes (highest quality
food)
Self-concept Concern for public
image
Employees
Yes (all individuals) No No

PROPOSED MISSION
‘To serve customers with superior organic food,
customer focused service and continuous
innovation in the world while generating long
term profitable growth for shareholders and
contribute for the welfare of society .’

9 COMPONENTS OF MISSION STATEMENT
Customer Products/ Services Markets
Yes Yes(organic) Yes (world)
Technology Concern for survival or
growth
Philosophy
No Yes Yes (highest quality)
Self-concept Concern for public
image
Employees
Yes(innovation in the
world)
Yes(welfare of society) Yes

FINANCIAL RATIO ANALYSIS
INCOME STATEMENT RATIOS 2006 2007 2008
Gross profit 34.9% 34.8% 34.0%
Net profit margin 5.7% 4.5% 3.0%
Direct stores opening expenses 72.6% 74.5% 77.9%
Per-opening and relocation cost 1.9% 3.1% 3.4%
Earning per share(EPS) 1.46% 1.3% 0.82%
•Gross profit set by company to achieve 34%
•Net profit margin averaging 5% of sales.
•Direct stores opening expense as a
percentage of gross margin shows large
consumption of gross profit.
•Pre-opening and relocation as a
percentage of gross margin shows minimal
consumption of gross profit.
•EPS favorable from 2006-2007 but drops to
insufficient level in 2008.

FINANCIAL RATIO ANALYSIS
•Current ratio declining gradually indicating
cash and receivables are insufficient to
cover current liabilities.
•Debt to asset ratio shows rapid increase in
debt from line of credit and long term loans
and capital leases.
•Debt to equity ratio show debt averaging
50% of the equity stake in assets then
increase to 120%.
•Inventory turnover shows monthly
average to sell its merchandise inventory.

Whole food management
Regional Presidents
ORGANIZATIONAL CHART

 Executives officers

 Flat
 Non hierarchical
 Decentralized
 Lean, not heavy management
 Open communication.

RECOMMENDED ORGANIZATIONAL CHART

MARKET SHARE AND OTHER COMPANIES
17%
7%
64%
9% 2%
1%
SHARE
the kroger co
supervalu inc
others(walmart,fresh and easy,mom & grocer)
safeway inc
whole food market inc.
adil group

 The value-added pricing strategy
 Keep customers loyal by providing service the customers
can’t find anywhere else.
 Market strategy:
 expansion and acquisition.
 Forward integration
 Horizontal integration
STRATEGY ANALYSIS

Promotional strategy
 Discounting
 Advertising
 Television advertising.
 Print advertising.
 Online advertising(social network marketing and Google ad
words).
 Billboard advertising.
 Website’s design
 Cooking tips.
 Company blogs.
 Product and stores locators.
 Company and investor information.
 Links to whole foods’ pages on social networking sites.
STRATEGY ANALYSIS

PROMOTIONAL STRATEGY
Social media
Gain awareness about our prepared meals and post what
are the meals are that day.

 Mobile apps
PROMOTIONAL STRATEGY

 Radio
 Television/online:
 “values matter”:documentary style TV spots
feat supplier, fisherman etc.
 Modern family, jimmy kimmerl, the voice.
 You tube:22 video ads
 Print:
 Magazines and newspapers.
 Men’s health, rolling stone, new York times
MEDIA MIX

CORE VALUES
 Selling the highest quality natural & organic products available
 Satisfying & delighting our customers
 Supporting team member happiness & excellence
 Creating wealth through profits & growth
 Caring about our communities & our environment
 Creating ongoing win-win partnerships With our suppliers
 Promoting the health of our stakeholders Through healthy
eating education

STRENGTH
• Brand recognition.
• Good quality.
• Huge selection/variety.
• Large, customized stores.
• Organic market leader
• Good distribution system.
• Positive employee environment.

WEAKNESS
• Concentrated just on US market.
• Relative slow growth.
• Limited number of suppliers.
• Advertising budget is very low.
• Large perishable inventory.
• Low market share.

IEF MATRIX
Strength
•Brand recognition.
•Good quality.
•Huge selection/variety.
•Large, customized stores.
•Organic market leader
•Good distribution system.
•Positive employee environment.
Weight
0.10
0.14
0.10
0.07
0.05
0.05
0.07
Rating
4
4
4
4
3
3
3
W.Score
0.4
0.56
0.4
0.28
0.15
0.15
0.21
Weakness
•Concentrated just on US market.
•Relative slow growth.
•Limited number of suppliers.
•Advertising budget is very low.
•Large perishable inventory.
•Low market share.
0.10
0.05
0.10
0.10
0.06
0.01
1.00
1
2
1
2
2
1
0.1
0.1
0.1
0.2
0.12
0.01
2.78

OPPORTUNITIES
 Higher quality product
 Popularity of healthy living
 Cross over of traditional grocers
 Promote and build brand identity with organic food
 Expend prepared food
 Higher demand for organic product
 Consumer health benefit through media
 Discount product line for lower income segment
 International expansion

THREATS
 Increased price pressure from fresh food
 Increase competition
 Increasing inflation
 Growth relies on new stores and acquisition
 New entrant
 Economic condition could effect good will
 Expanded prepared food

Opportunities
1. Higher quality product
2. Popularity of healthy living
3. Cross over of traditional grocers
4. Promote and build brand identity with
organic food
5. Expend prepared food
6. Higher demand for organic product
7. Consumer health benefit through media
8. Discount product line for lower income
segment
9. International expansion
Strength
1. Brand recognition.
2. Good quality.
3. Huge selection/variety.
4. Large, customized stores.
5. Organic market leader
6. Good distribution system.
7. Positive employee environment
SO strategies
1. Promote and build brand identity for
brand recognition. (S1,O4)
2. Use experience to successfully expend
in to international market. (S4,O9)
3. Growth in prepared organic food.
(S5,O5)
SWOT MATRIX

WEAKNESS
1. Concentrated just on US market.
2. Relative slow growth.
3. Limited number of suppliers.
4. Advertising budget is very low.
5. Large perishable inventory.
6. Low market share.
Opportunities
1. Higher quality product
2. Popularity of healthy living
3. Cross over of traditional grocers
4. Promote and build brand identity with
organic food
5. Expend prepared food
6. Higher demand for organic product
7. Consumer health benefit through
media
8. Discount product line for lower income
segment
9. International expansion
WO strategies
1. Creating a prepared food section
would appeal to more people
because of convenience.(W2,O8)
2. If cost for organic farmers are
lowered, produced more and arrange
a selling price deal between farmers
and whole foods.(W2,O6)

Strength
1. Brand recognition.
2. Good quality.
3. Huge selection/variety.
4. Large, customized stores.
5. Organic market leader
6. Good distribution system.
7. Positive employee environment
THREAT
1. Increased price pressure from fresh
food
2. Increase competition
3. Increasing inflation
4. Growth relies on new stores and
acquisition
5. New entrant
6. Economic condition could effect
good will
7. Expanded prepared food
ST strategies
1. Concentrate on strength and
what will separate them for all
the other stores in order to
maintain consistent growth
rate.(S2,T4)
2. Promote brand image with
quality and value for
money.(S1,O1)

WEAKNESS
1. Concentrated just on US market.
2. Relative slow growth.
3. Limited number of suppliers.
4. Advertising budget is very low.
5. Large perishable inventory.
6. Low market share.
THREAT
1. Increased price pressure from
fresh food
2. Increase competition
3. Increasing inflation
4. Growth relies on new stores and
acquisition
5. New entrant
6. Economic condition could effect
good will
7. Expanded prepared food
WT strategies
1. Internationally expansion with
prepared food. (W1,T2,T7)
2. Expand advertising budget to
increase market share for
meet competition.
(W4,W6,T2)

SPACE MATRIX
FP average 4.14
SP average -2.71
CP average -3.00
IP average 4.57
X axis 1.57
Y axis 1.43

SPACE MATRIX
Defensive
Conservative
Aggressive
Competitive

BOSTON CONSULTING GROUP
(BCG) MATRIX
Revenue % Profit % Relative
market share
Industry
growth rate
33.8% 43.2% 0.70 +15
19.1% 20.4% 0.09 -5
47.1% 36.4% 0.21 +10

INTERNAL - EXTERNAL (IE) MATRIX
 Classification of Cells:
 I, II, IV classified as: Grow & Build
Backward, Forward, or Horizontal Integration
Market Penetration
Market Development
Product Development
 III, V, VII classified as: Hold & Maintain
Market Penetration
Product Development
 VI, VIII, IX classified as: Harvest & Divest
Retrenchment
Divestiture

QUANTITATIVE STRATEGIC PLANNING MATRIX
 Range for Attractive Scores:
 1 = Not attractive
 2 = Some what attractive
 3 = Reasonably attractive
 4 = Highly attractive

RECOMMENDATION
 Product Development
Whole foods are competing in high competitive
environment from 2 kind of competitor general
store and organic store and as per QSPM result
both are highly attractive but Product Development is
more just life prepared food, prepared diet food,
recipe magazine, and health guider etc..

STEP 6:
STRATEGY
IMPLEMENTATION

EPS/EBIT CHART ANALYSIS
54
69
76
66
84
93
60
75
83
0
10
20
30
40
50
60
70
80
90
100
100 150 200 250
C.S.F
D.F
C.F

WHOLE FOOD MARKET INC.
PROJECTED INCOME STATEMENT

WHOLE FOOD MARKET INC.
PROJECTED BALANCE SHEET

EXISTING STRATEGIES FOR 2009
 Cutting in half the planned new store opening(30to15)
 Cutting discretionary spending by 50 percent
 Suspending its cash dividend
 Increasing the range of lower priced item
 Strengthening its value image
 Launched its whole trade product line

PROPOSED STRATEGIES
 Backward integration
 Increase marketing and goodwill to grow comparable
store
 Look for way to decrease upstream supply
 Private labeling
 Establish R & D project
 Expend online service

wholefood market (case no. 7)

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