SWOT Analysis: Whole Foods

PESTEL ANALYSIS
Political factors
- A government that is based on“A healthier you” strategy
- Reporting of organic prices
- Safety inspections Services

==> Positive impact
Economic factors
- Increase of 3.9% in the third quarter
- Real Personal Consumption expenditures (increase of 3% in the third quarter)
- Temporary Personal Income (increase of 6.1% in the third quarter)
- European Markets : Weak dollar against Euro, increase in the interest rates.

==> Moderate impact
Socio-cultural factors
- Increase a more healthy consciousness spirit.
- Social pressures regarding the environment and animal welfare.
- Trend to cook organic products with Whole Foods market's cooking initiation.
- Greater knowledge of links between
health issues and food.

==> Positive impact
Technological factors
- New Internet capabilities : On line shopping service
- Improved telecommunication facilities (distribution and retailing of goods)
- Improved technology for processing of goods.

==> Weak impact
Environmental Factors
- less than 1% of US farmland certified organic in 2004
- Recycling and Energy consumption
- Products without pesticides, chemicals..

==> Positive impact
Conclusion to PESTLE Analysis
We can conclude that the macro environment of Whole Food Markets has a good impact.
The most important point that we have to notice is that the company instructs to its team and its customers a particular intention to the environmental issues and concerns.

KEY SUCCESS FACTORS

Strong brand name
Good sales and communication : events ( Valentine's day), customers' invitation, cooking and massage initiation, customer services, limited advertising but marketing through word of mouth..
Merchandising : how they place their products
Control quality processes : Products quality without pesticides, chemicals products. Products 100% natural.
A good place strategy : they try to implement in the big city and center town where they can target a lot of consumers.
Large differentiation in their products
Good marketing impact : packaging,
Strong ethic : missions and visions, employee skills, training and experience
Technology and innovation : The company gives tips and ideas about healthy recipes for children in their website (annexe)
Strong supplier network
Niche : educated and wealthy customers who are willing to pay premium products.
Emotional involvement and customers' experience

Technology and innovation-related
- on line shopping service
- The company gives tips and ideas about healthy recipes for children in their website (annexe)
Manufacturing-related
- Large differentiation in their products
- They pay small-scale producers a price for their products that more than covered the producer's costs in order to maintain the growth, creativity and the lifestyle of their producers
Purchasing and Distribution-related
- The company purchased most of the retailed in the company's stores from local, regional and national suppliers and vendors in order to have a better position to negotiate volume discounts with major vendors and distributors
-They have nine regional distribution centers to supply its stores
-Strong supplier network
-A good place strategy : they try to implement in the big city and center town where they can target a lot of consumers

Marketing-related
- Most of their marketing budgets on in-store signage and store events such as taste fairs, classes, and product samplings
- 0.5% of its revenues is spent on advertising
- Good sales and communication : events ( Valentine's day), customers' invitation, cooking and massage initiation, customer services, limited advertising but marketing through word of mouth..
- Merchandising : how they place their products
Skills-related
- Niche : educated and wealthy customers who are willing to pay premium products
- Strong ethic : missions and visions, employee skills, training and experience
- The company invests in training and education for their
workers
- The company asks their team to participate and take part in product innovation
Organizational capability
- Emotional involvement and customers' experience (Community citizenship and social activism)
- They adapt their products to the willing of the customers : customers are looking for their well being and for healthy products
Environmental-related
-Control quality processes : Products quality without pesticides, chemicals products. Products 100% natural
- use of biodegradable bags
Other types
- A strong brand name
- accessible and helpful employees

Whole Foods market
Kroger
Wal-Mart
Critical

Success Factor

Wt.

Rating
Score
Rating
Score
Rating
Score
Advertising
.11
2
.22
3
.33
2
.22
Product Quality
.09
4
.36
2
.18
3
.27
Marketing
.11
4
.44
3
.33
3
.33
Price
Competitiveness
.08
2
.16
3
.24
4
.32
Innovation
.07
3
.21
3
.21
3
.21
Management-skills oriented
.07
4
.28
3
.21
3
.21
Purchasing and Distribution
.06
4
.24
4
.24
4
.24
Financial position
.11
2
.22
3
.33
4
.44
Manufacture
.08
4
.32
4
.32
4
.32
Customer Loyalty
.06
3
.18
3
.18
4
.24
Global Expansion
.04
2
.08
3
.12
3
.12
Market Share
.09
2
.18
4
.36
4
.36
Environment
.03
3
.09
2
.06
2
.06
Total
1

2.98

3.09

3.34

Following this weighted scales, we notice that Walmart and Kroeger are the leader in the American Supermarket chains thanks to its price competitiveness and financial position.

5.
Marketing

One main key decision of the company is to invest on its in-store signage and store events such as taste fairs, classes, and product samplings. Also, they invest on training and education for their workers to make them part of the company's culture and above all, to make them part of the innovation and ideas. The idea is to give a personal attention to the customers and give them the impression to be in a “third place” (after home and office) that is to say to turn shopping into a fun, pleasurable experience.
Its target are people who pay intention to their appearance, well being and a public who is willing to pay products at a premium price.
Then, they decide to promote environmentally sound practices such as all-natural-fiber-packaging, biodiesel fuel for their distribution fleet vehicles and electricity produced by renewable energy.

6. Fair business with its producers

Whole Foods Market decides to pay the small producer a price for their products that more than cover the producer's cost in order to make sure that they keep in working in good condition and maintain its growth, creativity and well being. This aspect is a point that differentiate them from its competitors because they don't only pay attention on their workers and customers but also on their suppliers and producers. This is part of the company's culture and
vision.

Marketing and Sales: Personal relationships with valued customer base, as well as creative and innovative marketing to attract new customers. There is now an interactive website for Whole Foods Market to interact with their customers even more by utilizing the Internet to reach out to their customers about education, new recipes, and new articles on the latest in research.

Humain ressource Management : A better hiring and training process for the team in order to make them part of the culture process of the company.
Customer service is flawless thanks to its employees who provide a personal attention to its consumers.
Procurement : They buy only the most organic and healthy food that is to say without pesticides, chemical products from accredited suppliers.
Marketing and sales : They provide a particular relationship to each customer. The innovation from Whole Foods Market is on providing some articles, information, ideas about new recipes based on healthy products for children and also to always provide an updated website.

RECOMMENDATION :

In a short-term
They should invest more on its competitive advantages which is the customer experience.
Invest on professional food staff ( dietitians and chefs) in order to provide advice and expertise for consumers.
Keep in organizing local activities that promote the organic living lifestyle.
Keep in offering fresh organic foods with other natural, locally-made products at a price-quality ratio.
Keep with its growth strategy by opening new stores in some strategic places where they could attract new targets.
Continue with training its team members and hiring more people.
Keep in updated its website by giving some tips and ideas of recipes through video tutorials.

In a long-term we could imagine a price war with its main competitors so in this case, Whole foods Markets should think to adopt a vertically backward integration that is to say to produce its own products. This strategy would decrease the power of the suppliers through differentiation and in this case maintain its profit margins within an increasing price competitive environment.
Target a new segment of customers
To be on the alert of any market changes and customer trends/needs.