Whole Foods Case- Part 2
Whole Foods Market, Inc. has long been known as an innovative company with stringent quality standards, a calling to community and environmental activism, a robust growth model and highly admired employment practices. However, the company has faced recent hardships from elements from its macro-environment such as the economic climate in the U.S. and abroad, the political environment, the socio-cultural environment of many prospective expansion regions, and technological advancements in the industry. Whole Foods must take into careful consideration the primary competitive forces affecting their potential growth and current market standing. Rivalry among the industry member’s increase and decrease with the tides of the market and much focus should be directed towards buyer demand. Keeping an open and healthy relationship with their suppliers and running their own distribution networks leaves Whole foods with a win-win outcome with their partners along the supply chain. And being an industry incumbent they experience cost advantages and have attracted strong brand loyalty from customers. But to bounce back from some of the toughest years in the company’s history, Whole Foods Market must reassess its costs, refocus its expansion strategies, and offensively target potential clientele interested in purchasing organic products. During these changes, Whole Foods must continue to market its social and environmental ideals and its mission and vision. They are known for their high standards of quality and ethical practices and it is important to balance the needed effort to expand brand recognition and loyalty with its core values and beliefs. Without the value behind their brand, the company will not survive. If Whole Foods can be successful in completing these initiatives that include a new marketing structure that will create a public relations buzz surrounding their core beliefs and superior product quality, the company will have no problem emerging as an industry leader once the economy strengthens.
In order to continue pursuing being a market contender, Whole Foods must take immediate actions to increase financial performance and maintain its competitiveness. The most expensive area for Whole Foods’ cost structure is labor costs. They need to reassess which services are more highly valued than others and then make some difficult decisions about which ones are the most beneficial to their market standing and imperative to their growth. Cutting expenses that are not completely necessary to maintain their exceptional in-store experience should free up resources that can be put back into the company advertising budget. Whole foods has spent less on advertising than a large majority of their market contenders (.5% of their total sales in 2008). Word of mouth and in-store advertising of taste fairs, farmers markets, tours and classes and product sampling, made up of most of their marketing strategy. And while creating an exceptional in-store experience for the customer is one of Whole Foods main objectives, its main priority should be to draw customers in.
1. Elements of The Macro-Environment
The macro-environment is largely external to Whole Foods Market and the organic food chains in America and the world abroad. The elements of the macro-environment are uncontrollable factors and beyond the direct influence and control of any business in any industry. Some elements that may have an impact on Whole Foods Market and its industry as a whole include economic conditions, government and political conditions, socio-cultural, and technological conditions. The general economic environment can be made up of the nature of the economy of the country the organization resides as well as conducts business. Market resources such as money, market raw material components, services, supply markets and so on which influence the supply of inputs to the organization as well as...
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