Whole Foods Strategy

The familiarity I depart be presenting is safe and sound nutritions, case number seven. building block Foods is a supermarket chain housed in Austin, Texas which emphasizes inwrought and entire crossways. As of September 2009update, the political party operates 302 break ins 291 stores in 38 U. S. states and the District of capital of South Carolina six stores in Canada and louver stores in the get together Kingdom. External assessment there argon all everywhere 1 deoxycytidine monophosphate thousand grocery store stores in the United States, with a wide variety of types. Stores send from very beautiful neighborhood stores, to immense two hundred thousand fledge hind end stores.Currently, the only major rival to upstanding Foods is dealer Joes. As of 2008, they had near 300 stores in twenty five states ar still increment. Most of their stores are located in California and the pep pill east coast, and most single stores disruption out across the Unite d States. Trader Joes ordinarily has diminisheder prices than substantial Foods, entirely their stores are generally smaller in size and in selection. Another supermarket that is current to the industry, barely festering at a rapid pace is a Wegmans.With over 70 stores in the New York area, this store had 4. gazillion dollars in sales in 2008. Wegmans is consistently rated near the top of Fortunes yearbook list of the 100 best(p) companies to trim for. With the organic pabulum for thoughts market growing at such(prenominal) a fast pace, re sportinged stores, small and large-mouthed are incessantly popping up. A couple examples acknowledge the Fresh Market chain which has 86 stores in 17 states, and the Central Markets which cast off 8 stores in Texas. In addition to the unique, organic centered grocery stores, companies such as Walmart, with over 100 zillion dollars in sales, compete for the same customers that square Foods does.Kroger and Safeway round out the list of the highest grossing grocery stores in the country. Due to the sparing downturn, livelong Foods has tried to trim back some of its set to compete with all of the other growing stores in the market. SWOT Strengths Despite the economic downturn, Whole foods has a strong monetary performance. Revenues give way grown by a rate of 17 per centum over last year and this increase was dictated by 14 percent square footage growth, excluding the recently acquired Wild Oats locations.Whole Foods put down sales per gross square foot of $923,an increase of approximately 7 percent over last ear. The Strong revenue enhancement growth has helped the order to pursue its elaboration plans and improve its bargaining power in the market. The company has excessively grown through mergers and acquisitions, with approximately 32 percent of its animate square footage coming from take-overs. In supercilious 2007, Whole Foods merged with Wild Oats markets. Since the organic foods retai ling industry is mostly comprised of small local chains, mergers have renderd the company admittance to locations and they have retained experienced squad members.The company offers a broad product selection in all its stores and its large stores, also have catering go where customers can purchase made-to-order foods. Whole Foods emphasis on fresh food gives the company an edge over its competitors who usually just offer packaged foods this large product portfolio al humbleds the company to address fourfold customer segments. Weaknesses The company has a feeble international operation with just troika stores in Canada, and six in the UK.The companys operations in the UK and Canada are not yet large abounding in purchasing and distribution, resulting in relatively high product prices. Also, Whole Foods relies to a great extent on word-of-mouth publicity, which is a damage in comparison to its competitors who use print, picture and online media. The company spends small a mounts on publicise and merchandising compared to its competitors. In 2007, the company worn-out(a) 0. 5% of its total revenues on advertising. Opportunities inseparable and organic food products are one of the fastest growing categories in food retailing.There is growth in the rent for organic foods because of the increasing preferences among consumers for healthy food. The US organic food market grew by 12. 3% last year to move over a value of $15. 9 billion and is expected to hit 24 billion this year. Although organic products represent just about 2% of the total food and deglutition sales in the US, the market is growing approximately 20% annually. More consumers are preferring natural, fat-free and healthy food products. Food items containing trans-fat are losing market share to low calorie, low fat, natural and organic products. change magnitude customer preference for organic foods is apparent to impact the companys sales, assumption its leading market position in the organic grocery segment. Threats Whole Foods competitors implicate natural foods supermarkets, specialty supermarkets, warehouse social rank stores, small specialty stores and restaurants. In addition, some traditional and specialty supermarkets are also expatiateing more aggressively in marketing a range of organic foods, thereby competing directly with Whole Foods for products, customers and locations.For example, Wal-Mart announced that it will focus on the organic segment. They bespeak to become the low-price leader in organics, not just in food but clothing, electronics and other household products. Wal-Mart has already duple its organic range in fresh produce, dairy and dry food items during 2006. close to of these competitors have great financial or marketing resources than Whole Foods, and may be able to provide greater resources to promoting and change their products.Increased competition may have an adverse effect on favorableness as the result of lower sales, l ower gross profits and/or greater operating costs such as marketing. Discussion of Strategic Alternatives Faced with singular economic challenges and numerous competitors, Whole Foods inescapably to take an aggressive approach to first any challenges. By anticipating continued amour in healthy eating, Whole Foods should laughingstock children as their new customer base with the development of an organic line of products designed for children.With increased competition and economic conditions in the state they are, Whole Foods needs to expand their marketing strategy towards a more broader, interactive one. The use of Facebook and Twitter could be useful tools on the local, and global level to communicate with current and future customers. Whole Foods needs to also continue its commission to the environment. Expanding on already in address programs, such as eliminating disposable pliant bags, charitable donations and green power use, Whole Foods should take part in programs t hat upgrade animal welfare on farms and ranches. cheer perception is one of the most outstanding strategies that needs to be focused on if Whole Foods is going to overcome competing with low cost competition . Providing coupons, budget informed recipes, and money saving tips are what customers value. A in store value study can help customers locate the best deals in the store. Along with a hospitable and educated staff, these strategic alternatives can provide Whole Foods with the tools necessary to overcome the challenges it currently faces.