Whole Foods Value Chain
Contents Page
1. Introduction……………………………………………………………………...Page 1
2. Environmental Factors…………………………………………………………...Page 1
3. Value Chain……………………………………………………………………...Page 2
4. Conclusion…………………………………………………………………….....Page 4
5. References………………………………………………………………...……..Page 5
Introduction
Whole Foods started in 1980 when it’s CEO, John Mackey merged his store, SaferWay, with a competitor, Clarksville Natural Grocery. Since then, Whole Foods has expanded to 275 locations in North America and United Kingdom with 47,000 employees, making it the world’s leading supermarket retailer of natural and organic products (Harbin and Humphrey, 2013). With a mission to promote the vitality and well- being of individuals, Whole Foods strives to maintain the strictest quality standard in the supermarket industry (Lee and Linowes, 2009). The objective of this essay is to understand how the value chain of Whole Foods reflects the internal and external realities faced by the company.
Environmental Factors
Due to the increased awareness of threats like genetically modified foods, additives and preservatives, health and organic food gained popularity and show no sign of slowing down, increasing the attractiveness of the industry. For Whole Foods, who holds a strong position in market, this means potential for a bigger market share, putting itself in an even stronger and profitable position (Meador, Britton, Philips and Howery, 2012). However, Whole Foods will still be affected by changes in the demographic, economic segments of the external environment.
As Whole Foods emphasizes on high quality standards, its products tend to command higher prices as compared to its competitors therefore the two market groups that present an opportunity for the growth of Whole Foods are the ageing baby boomers and urban singles (Harasta and Hoffman, 2007). Being more health-conscious, the baby boomers are the main driver and can afford to spend more on organic
1. Introduction……………………………………………………………………...Page 1
2. Environmental Factors…………………………………………………………...Page 1
3. Value Chain……………………………………………………………………...Page 2
4. Conclusion…………………………………………………………………….....Page 4
5. References………………………………………………………………...……..Page 5
Introduction
Whole Foods started in 1980 when it’s CEO, John Mackey merged his store, SaferWay, with a competitor, Clarksville Natural Grocery. Since then, Whole Foods has expanded to 275 locations in North America and United Kingdom with 47,000 employees, making it the world’s leading supermarket retailer of natural and organic products (Harbin and Humphrey, 2013). With a mission to promote the vitality and well- being of individuals, Whole Foods strives to maintain the strictest quality standard in the supermarket industry (Lee and Linowes, 2009). The objective of this essay is to understand how the value chain of Whole Foods reflects the internal and external realities faced by the company.
Environmental Factors
Due to the increased awareness of threats like genetically modified foods, additives and preservatives, health and organic food gained popularity and show no sign of slowing down, increasing the attractiveness of the industry. For Whole Foods, who holds a strong position in market, this means potential for a bigger market share, putting itself in an even stronger and profitable position (Meador, Britton, Philips and Howery, 2012). However, Whole Foods will still be affected by changes in the demographic, economic segments of the external environment.
As Whole Foods emphasizes on high quality standards, its products tend to command higher prices as compared to its competitors therefore the two market groups that present an opportunity for the growth of Whole Foods are the ageing baby boomers and urban singles (Harasta and Hoffman, 2007). Being more health-conscious, the baby boomers are the main driver and can afford to spend more on organic
References: 1. Conway, S. (2007). Whole Food Market: An Industry Leader? Graduate School of International Relations and Pacific Studies, 1-19. 2. Dess, G. Lumpkin, G. Eisner, A. McNamara, G. Kim, B. (2012). Strategic Management: Creating Competitive Advantages. New York, America: McGraw-Hill Irwin. 3. Harasta, P. Hoffman, A. (2007). Whole Foods Market, 2005: Will There Be Enough Organic Food to Satisfy the Growing Demand? 566-576. 4. Harbin, J. Humphrey, P. (2013). Whole Foods Market, Inc. Journal of Case Research in Business and Economics, 1-19. 5. Lee, A. Linowes, R. (2009). Whole Foods Market: A Strategic Analysis. General University Honors, 1-27. 6. Trader Joe’s vs Whole Foods Market: A Comparison of Operational Management. (2010). MIT Sloan Management. 7. Value Chain Analysis For Assessing Competitive Advantage. (1996). Institute of Management Accountants, 1-33.