USA: +1(669)289-8683 
Sign in
Hello! I need help with an assignment. I already gave my answers for two discussion questions (3.1 and 3.2). Now I have to respond and comment on two student’s answers for each discussion question (so a total of 4 replies). It needs to list references (APA format). It also needs to be minimum of 250 words or more. I need the assignment completed by Friday 12/21 at 10pm EST (22:00).
Whole Foods
Student 1 Response to Discussion Question 3.1
Pertinent Management Issues
The pertinent management issues of Whole Foods Market is to ensure the organization maintains its competitive advantage despite the economy. As discussed in the case study, the decline in the economy had negative impacts on the growth and competitive advantage of the organization. Leaders in Whole Foods Market should continue to focus on their current strategy and examine ways to maintain their competitive advantage.
Analysis and Evaluation
Five Forces Model:
According to Thompson, Strickland, and Gamble (2012), the strategy of Whole Foods Market best aligns with a focused differentiation strategy. A focused differentiation strategy is “concentrating on a narrow buyer segment and outcompeting rivals with a product offering that meets the specific tastes and requirements of niche members better than the product offerings of rivals” (Thompson et al., 2012, p. 136). More simply put, the strategy of Whole Foods Market is a focus on a narrow buyer segment offering unique, differentiated products.
Market Target:
A focused differentiation strategy aims at securing a competitive advantage with a product designed to appeal to a specific group of buyers (Thompson et al., 2012). The specific group of buyers Whole Foods Market works to satisfy are those who have particular interest in natural and organic foods. Whole Foods Market has a strategy that will “help support the health, well-being, and healing of people (customers and Team Members) and of the planet” (Thompson et al., 2012, p. C-10). Additionally, Whole Foods Market places emphasis on customer satisfaction through the second of seven core values, “satisfying and delighting our customers” (Thompson et al., 2012, p. C-11). Whole Foods Market secures their buyers by strategic placement of stores, choosing upscale areas of urban metropolitan locations with high-traffic shopping.
Product Differentiation:
A focused differentiation strategy also aims at securing a competitive advantage through the uniqueness of a product. Buyers must value the brand’s uniqueness for product differentiation to be successful. Thompson et al. (2012) state “successful differentiation allows a firm to do one or more of the following: command a premium price for its product, increase unit sales, gain buyer loyalty to its brand” (p. 146). In the case of Whole Foods Market, the uniqueness of the brand as perceived and appreciated by buyers, which gives them a competitive advantage. Buyers pay more for their products, but feel they are getting better quality so they are more willing to accept the increase in price. Thompson et al. (2012) highlights the importance of uniqueness and states “the most successful approaches to differentiation are those that are hard or expensive for rivals to duplicate” (p. 150). If a Whole Foods Market consumer no longer feels they are receiving the best quality on the market, they will likely begin shopping elsewhere.
Action Plan and Recommendations
Some pitfalls to a differentiation strategy that Whole Foods Market should be cognizant of include the following: charging too high a price premium, the easy development of rival competitors or rapid imitation of a product, and an unenthusiastic response from buyers (Thompson et al., 2012). If Whole Foods Market falls victim to any of the pitfalls, they are at risk to lose their competitive advantage.
My recommendation to Whole Foods Market would be to continue looking for ways to cut organizational costs to ensure they are maintaining competitive prices for their products. If they are unable to do so, product prices will increase which will catapult negative effects for the organization. For example, if prices increase, rival competitors might be able to offer lower prices on similar products and therefore the response from buyers will shift toward favoring the competitor.
References
Thompson, A., Strickland, A., Gamble, J. (2012). Crafting and Executing Strategy; The Quest for Competitive Advantage: Concepts and Cases, 18ed. New York, NY: McGraw-Hill Irwin.
Student 2 Response to Discussion Question 3.1
SWOT Analysis
Strengths
Market leadership. Whole Foods Market (WFM from hereon) is the world’s leading natural [and organic] foods empire (Johnston, 2008). It prides itself on its differentiated product line of high-quality natural and organic products. This product offering ranges from “produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, specialty (beer, wine and cheese), coffee and tea, nutritional supplements, vitamins, body care, educational products such as books, floral items, pet products and household products” (Whole Foods Market, 2011, p.4). Through the years, WFM has acquired a track record of not only satisfying and delighting their customers; but has also achieved a unique image for its commitment to community and environmental sustainability.
The Company’s strong market position is further evident through its widely dispersed operations. “As of September 25, 2011, [it operates] 311 stores in the United States, Canada, and the United Kingdom. [The] stores average 38,000 square feet in size and 10 years in age” (Whole Foods Market, 2011, p.3).
Customer loyalty. Another one of Whole Foods Market’s intangible assets is the strong buyer loyalty and goodwill. This is because the stores represent more than a “fancy grocery store” and are in fact more of a lifestyle store. It is no surprise then that “customers come from a 20 mile radius to shop at Whole Foods as compared to just two miles for the typical supermarket shopper” (Harbin & Humphrey, 2010, p.4).
Competitively valuable alliance with suppliers. Whole Foods Market creates and maintains win-win partnerships with suppliers which simultaneously enhance product quality. WFM provides “more money to producers, ensure[s] better wages and working conditions for workers, and utilize[s] sound environmental practices” (Whole Foods Market, 2011, p.5).
Organizational knowledge. Whole Foods Market makes a rolling effort to share its collective knowledge and has made “a significant and positive impact on the natural and organic foods movement throughout the United States, helping lead the industry to nationwide acceptance over the last 31 years” (Whole Foods Market, 2011, p.3).
Weaknesses
Heavy reliance on quality products. If suppliers are unable to continue with the quality, quantity, or the variety that is required; or if other grocery chains increase their product line of natural and organic foods (Whole Foods Market, 2011), then WFM will certainly find it hard to uphold its quality standards.
Higher costs than competitors. In the face of a rising number of cost-conscious shoppers, who are more frequently using coupons, preparing more meals at home, opting for store-brands rather than premium national brands, WFM may simply appear as a fancy store with unreasonable prices.
Opportunities
Rising buyer demand for natural food products. The cumulative U.S. grocery industry saw a 1% increase in 2010 with approximate sales of $563 billion. “Within this broader category, natural product sales through retail channels were approximately $65 billion, a 7% increase over the prior year” (Whole Foods Market, 2011, p.3).
Growing through expansion. Whole Foods Market seeks and seizes expansion opportunities primarily through new store openings in premium and upscale real estate sites. Its current opportunistic real estate strategy is concentrated on opening stores in international locations as well as existing trade areas (Whole Foods Market, 2011)
Threats
Loss of sales to substitute products. The grocery store industry in United States is certainly filled with a vast variety of stores, large and small, cheap and pricey. Although most stores differ from each other in the types of customers they attract, they are still, for the most part, competing for the consumer’s food budget. (Harbin & Humphrey, 2010)
Disruption of supply chain. Whole Foods Market relies heavily on purchases made from a singly third-party supplier – United Foods Inc. – and has recently also renewed its relationship through until 2020. Any kind of delay, disruption, cancellation, or inability on part of United Foods to deliver products to WFM stores may significantly damage the operations. (Whole Foods Market, 2011)
Costly new regulatory requirements. As mentioned before, any new laws that require the reformulation of certain products to meet tougher standards (Whole Foods Market, 2011) may threaten the continuation of WFM’s operations at current costs and systems.
Pertinent Issues
In light of the abovementioned threats and issues, it appears that Whole Foods Market needs to address the pertinent issues of maintaining its strong market position while offsetting the higher prices that are currently turning off the rest of the consumer group.
Action Plan
Increase Community Visibility
Whole Foods Market must capitalize the integrity associated with its image and brand-name which it has worked to acquire over the years. People have come to trust WFM for its commitment to quality foods, support of local farmers, and dedication to sustainable agriculture and environment. WFM stores must therefore garner pay back for their brand within respective neighborhoods through increased community involvement. Community initiatives – such as creating healthier lunch boxes for kids, holding local farmer markets alongside store property, organizing informative sessions about healthy foods & healthy planet – may earn WFM the title of “The Ultimate Grocery Store” within the community that it operates.
Increase the Range of Value-Priced Items
Whole Foods Market must additionally take advantage of the quality assurance that comes with its name, while expanding its line of value-priced items. By offering products which are healthier and yet economical, WFM will have the power to attract in customers beyond its loyal core group. Such value pricing will also reassure hesitant customers that they can live a healthier lifestyle without having to damage their household budgets.
Marketing through Pamphlets and Flyers
This is an avenue which may enable Whole Foods Market to advertise its brand-name, company knowledge, and value pricing to gain a larger consumer share of the grocery industry. Advertising “Whole Foods, Whole People, Whole Planet”, its core values, along with feel good statements, may encourage more customers get their groceries from WFM. Such marketing must additionally reassure customers that they can actually afford to shop at WFM because its extensive product line also incorporates value-priced items.
References
Harbin, J. L., & Humphrey, P. (2010). Whole Foods Market, Inc. Journal of Case Research in Business and Economics, 2, 1-17. Retrieved from http://www.aabri.com/manuscripts/09288
Johnston, J. (2008). The citizen-consumer hybrid: Ideological tensions and the case of whole foods market. Theory and Society, 37(3), 229-270. DOI:10.1007/s11186-007-9058-5
Whole Foods Market. (2011). Form 10-K. Retrieved from http://wholefoodsmarket.com/sites/default/files/media/Global/Company%20Info/PDFs/2011_10K
Student Response 1 to Discussion Question 3.2
Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not?
John Mackey’s strategic vision does describe his aspirations for Whole Foods’ future: “to become an international brand synonymous with carrying the highest quality natural and organic foods available and being the best retailer in every community in which Whole Foods stores were located” (Thompson, 2010, p. C-6). If a vision statement is a vivid idealized description of a desired outcome that inspires, energizes and helps you create a mental picture of your goals, I think he achieved it. Conversely, strategic vision should also delineate the strategic course and long-term direction. He may have missed that target according to Thompson (2010) when “growth objectives for Whole Foods had been to have 400 stores and sales of $12 billion by the end of fiscal year 2010, the economic downturn in the United States that accelerated swiftly in 2008 hit Whole Foods hard and forced a number of strategy changes in 2008-2009” (p. C-6).
What do you like/dislike about the company’s mission/vision “Whole Foods, Whole People, Whole Planet”?
Whole food suggests “food and other items that are free of pesticides, preservatives, sweeteners, and cruelty” (Anonymous, 2012). I like that. It just seems to make sense to eat the best tasting and most nutritious high quality food that is the least processed, most flavorful, naturally preserved, pure, and unadulterated by artificial additives, sweeteners, colorings and preservations (Thompson, 2010).
“Whole people” refers to the quality and treatment of Whole Food’s employees. I like that too. Who enjoys going to a place of business wherein all of the employees are curmudgeons? “Employees are crucial for the achievement of internal quality and consequently for business performance of companies” (Antoncic and Antoncic, 2011, P. 81). They add “The loyalty of employees exists in the company, when employees believe in the objectives of the company, accept the objectives as their own, work for the common welfare, and want to stay in the company” (p. 82). Whole Foods has in place a variety of compensation, incentives, benefits, training programs, performance management systems, empowerment programs, and internal promotions that tend to foster loyalty and commitment within Whole Foods Markets.
Whole planet has more of a (Green Party) politically-oriented insinuation to it. I don’t like that. Its smacks of giving advice on morality or behavior in an irritatingly tedious and overbearing way.
What are the elements of Whole Foods strategy?
Their growth strategy has been to acquire small local and regional firms with limited capabilities. Between 1992 and 2004, they acquired nine competitors and gained fifty-three locations. Their store location and product-line strategies of locating in upscale urban metro areas in high-traffic shopping locations are consistent with strengthening their market position via their scope of operations. And, their pricing strategy is consistent with using a cost-based advantage to attack competitors on the basis of price o value.
Which one of the five generic competitive strategies is Whole Foods employing and justify your answer?
I believe that Whole Foods employs the focused (or market niche) strategy, specifically, a Focused Differentiation Strategy which “aims at securing a competitive advantage with a product offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers” (Thompson, Peteraf, Gamble, and Strickland, 2011, p. 154). Their product line-strategy supports this. If you have a proclivity towards cactus pears, organic meats and pet food, wild-caught seafood, scones, hearth-fired pizza, dried fruits, Allegro coffee, and aromatherapy products, then this is the place for you.
How well is Whole Foods Market performing from a strategic perspective?
According to Thompson (2010), in 2009 Whole Foods Market was the 11th ranked supermarket chain in North America with a 0.9% share of total grocery sales. I suggest that since the ten stores listed above whole foods were all traditional grocery and super-market operations, with Whole Foods the only one in the natural and organic foods format, they are performing very well.
Does Whole Foods enjoy a competitive advantage over its 3 chief rivals—Wild Oats, Fresh Market and Trader Joe’s? Does the company have a winning strategy?
Yes. Whole Foods has the ability to meet its customer’s needs, effectively, with products that its customers highly value. They are able to focus on a narrow market niche and sustain this competitive advantage by doing a better job that their rivals by serving the special needs and tastes of their customers within this niche. They also maintain their competitive advantage through continuous value chain and process improvements by engaging their employees to find innovative ways to drive costs down. Additionally, they maintain a competitive advantage by maintaining a corporate social responsibility program that includes environmental sustainability.
Student Response #2 to Discussion Question 3.2
1. Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not? What do you like/dislike about the company’s mission/vision “Whole Foods, Whole People, Whole Planet”?
I think John Mackey has a good strategic vision for Whole Foods. His vision places emphasis on growth of the organization as well as maintaining the core values and company mission. His strategy has allowed for growth of the organization through numerous acquisitions and the company sustained itself even through the economic decline. The actions he has taken to gain a competitive advantage stay true to the natural and organic products that were at the heart of the development of the organization. He does not change these products just to please more customers. I like that the company’s mission/vision is simple and short, this makes it easy for consumers and team members to recognize it and support it. The one thing I do not like about the company’s mission is that until reading this case I was not aware of the “Whole Planet” piece of the mission. I think Whole Foods could do a better job of raising awareness of the good they do for society based on their mission/vision.
2. What are the elements of Whole Foods strategy? Which one of the five generic competitive strategies is Whole Foods employing and justify your answer?
The competitive strategy of Whole Foods is a focused differentiation strategy. Whole Foods targets those who want unique and quality products as well as a unique experience to their consumers. The specific elements of this strategy is to provide natural, organic food of high quality to consumers. Whole Foods’ strategy focuses on the uniqueness of their product more than offering low prices to customers.
3. How well is Whole Foods Market performing from a strategic perspective? Does Whole Foods enjoy a competitive advantage over its 3 chief rivals – Wild Oats, Fresh Market, and Trader Joe’s? If so, why? If not, why? Does the company have a winning strategy? Why?
Whole Foods is doing well in the market of supermarkets for natural and health foods. Their store sales are continuing to increase each year, even despite the declining economy. Additionally, Whole Foods has grown in store locations and has also grown through acquisitions.
When it comes to natural and organic products, Whole Foods does enjoy a competitive advantage over Fresh Market and Trader Joe’s. Wild Oats has been acquired by Whole Foods and is therefore no longer a competitor. Whole Foods achieved a competitive advantage over Fresh Market and Trader Joe’s by narrowing their product through differentiation and also narrowing their target market (Thompson, Strickland, & Gamble, 2012). They have made their brand and shopping at their store a unique experience that consumers have come to love.
