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Whole Foods Case Study

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by

Katie Marshall

on 23 October 2014

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Transcript of Whole Foods Case Study

Whole Foods Case Study

Company Structure
The corporate headquarters is located in Austin, Texas where the first store opened in 1980.
Today, 360 stores in North America and the UK
Structured into 12 geographic regional offices.
Over the years they have also acquired other natural grocery store brands to expand their market share in the industry.
IPO: 1992
Whole Foods, Whole People, Whole Planet
Core Competencies: wholefoodsmarket.com

Sell the highest quality natural and organic products available
To satisfy, delight and nourish our customers
Support team member excellence and happiness
Create wealth through profits and growth
Serve and support our local and global communities
Practice and advance environmental stewardship
Create ongoing win-win partnerships with our suppliers
Promote the health of our stakeholders through healthy eating education
Standards
Quality:
"Whole foods" are the most nutritious, freshest and taste the best
Products sold do not contain artificial preservatives, colors, flavors, sweeteners or hydrogenated fats.
They maintain relationships with local suppliers that allow the food to be the freshest as possible from the farm to plate.

Environmental:
Principles: organic farming, seafood sustainability, animal welfare standards, caring for communities and whole trade guarantee.
Whole Planet Foundation:
seeks to help global communities by introducing micro-finance projects in developing countries.
Markets They Serve
People:
Health food nuts, specialty food seekers and organic home chefs.
Healthy Lifestyle, people who care about what they put into their bodies.
Leader in health food industry

Local Communities:
Partner with local suppliers to get the freshest products and also support the local economy
Philanthropy such as food and clothing drives, monetary donations and 5% giveback
Questions??
Kinetic Consulting
SWOT Analysis
Strengths
:
Well established in sustainable, organic "niche" market
Loyal customer base
Stable growth and profit margins
Established and carried out responsible business practices
Treats its employees well and stuck with their standards and practices.
Weaknesses
:
Known as "Whole Paycheck" due to high costs
Food production dependent on environment forces
Opportunities:
Sponsor local events to build stronger relationships within their communities
Improved marketing especially around Whole Foods generic brand 365
Loyalty program to reward frequent shoppers.
SWOT Analysis
Threats:
Well established grocers becoming players in the organic market (i.e. Kroger)
Many new organic grocers entering the market (i.e. Sprouts)
Procurement of local product
Lack of availability of organic & local crops
Supply chain for organic products is underdeveloped and cannot meet the needs of the food system in the United States.
Changes in local and federal organic food regulations and standards
Economic downturn
Case Study Problem:
Increased competition may adversely effect revenues and profitability
Possible Solutions:
Recommendation:
Implementation Activities:
Measurements:
Improve Marketing**

Buy out competitors
Positive: Expand market share
Negative: makes room for additional new competitors
Exclusive Co-op Network with local, organic farms
Positives: Consistent supplies of the highest quality meats, vegetables, fruits, dairy and grains.
Negatives: Logistics
Improve Marketing
365 Brand
"365 Everyday Value"
Fight "Whole Paycheck" image
Focus on positive, beneficial, and humane way they do business
5% profits go back to local community
Excellent support of employees

Pros:
Expand customer base
Reinforce identity
Cons:
Perception of market share loss
Difficulty focusing on specific regions
Create substantial budget for a new marketing campaign
Unique brand style
Community Involvement
Sustainable business practices and quality standards
Media/print presence
Create Whole Foods App
Specials/discounts
Recipes/shopping lists/meal planning
Live in-store updates
Create incentives for employees
Partnering and engaging local farms to build the key relationships and networks.
Participate in developing marketing initiatives
Financial Summary:
2004-2006:
Steady growth
2007-2008:
Acquired Wild Oats
Resulted in high store expenses due to refurbishing requirements, loans to purchase WO/interest payments, and reduction in Net working Capital
New legislation on Organic Foods and Green Initiatives
2008 Recession
2009-2013:
Growth rate of average stores: 5.2%
2 to 1 stock split in 2013
Themes: increasing sales, increasing property, and increasing liabilities
Organizational History
Founders:
John Mackey, Renee Lawson Hardy, Craig Weller and Mark Skiles
Whole Foods organic empire grew through mergers and acquisitions of brands, all of which contributed to shaping the companies values
Wild Oats
Allegro Coffee
Bread of Life
Merchant of Vino
etc......
Create focus groups in geographic region
Determine current impression of WF
Determine current impression of competitors
Later determine how well marketing is working

Collect data:
Customers in store/revenue
Downloads of App/web traffic

Tracking average spending of:
Existing customers now (baseline)
Customers as time progresses
Customers use of frequent shopper card
Outline
Background on Whole Foods
Company Structure/History
Financial Summary
SWOT Analysis
Problem
Recommendations
Implementation
Measurements
Full transcript