T Just Natural And Organic Foods And International Brand Synonymous Marketing Essay

Harmonizing to Whole Foods Market, Inc. ‘s Form 10-K from 2002, the company ‘s “ end is to go an international trade name synonymous with non merely natural and organic nutrients, but with being the best nutrient retail merchant in every community in which we are located. ” The vision of Whole Foods goes deeper than merely being a successful food market shop. The company is dedicated to finally bettering the universe in general ; it plans to make this by go oning to concentrate on its immediate visions, which include offering the highest quality of all-natural nutrients and fostering a respectful, motivated workplace in which employees are treated reasonably. The company ‘s doctrine besides includes the declaration that “ companies, like persons, must presume their portion of duty as renters of the Earth. ”

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Overall external factors with immediate effects on Whole Food Market Inc. ? s concern include economic, societal, and ecological. Presently, consumers are overspending their personal income bounds, energy costs are staying high every bit good as involvement rates lifting. All of these economic issues result in a decreasing disposable personal income among consumers, which could take to be economy and price reduction purchases attempts. For Whole Foods, this can be seen as a possible menace to gross revenues and net incomes because of the company? s well-known high monetary values. The most influential societal factor, which can be seen as a definite chance for Whole Foods is America ‘s current Health Consciousness province. Many consumers are taking a interest in bettering their feeding wonts and overall wellness than of all time before. With the continued spread of the wellness witting motion, shops like Whole Foods can make nil but addition.

Industrial Analysis

The natural and organic nutrient retail industry has grown quickly over the past 20 old ages. This industry saw huge growing during the 1990s, but upon reaching of the 2000s, the growing has steadied itself at 7-9 per centum per twelvemonth from the old decennary ‘s two-digit growing figures. The natural and organic nutrient retail industry to which Whole Foods belongs is merely a little section of the big Grocery retail industry. Whole Foods ‘ gross revenues account for less than 1 % of the US food market market. However, this little section is still a great influence on the grocery/supermarket concern. Natural nutrient shops have become progressively more comfortable and popular over the past 20 old ages due to the demand for organic merchandises by a turning figure of consumers. Harmonizing to a study by the Organic Trade Association, the mean US family will pass 14 % of its budget on organic merchandises by 2025.

Consumers shopping within the natural and organic nutrient retail industry can non be classified into one class of the market. Harmonizing to many studies, all age groups can be found shopping in natural and organic nutrient shops, but at that place has been a important addition in immature grownups between the ages of 18 to 24 every bit good as grownups aged 55 to 64. The chief grounds clients shop at natural and organic nutrient shops include the turning away of genetically modified nutrients and pesticides, wellness and nutrition, and freshness.

Suppliers to the natural and organic nutrient retail merchants are of class organic husbandmans. In 2004, merely 1 per centum of US farming area was designated as organic cropland, nevertheless, this figure has doubled since 1997, seen in Exhibit 1. It is an of import end for at least 5 per centum of U.S. husbandmans to be dedicated to organic agriculture by 2013. Current, obstacles to acceptance of organic farming include high managerial costs and hazards of switching to a new manner of agriculture, limited consciousness of organic farming systems, deficiency of selling and substructure, and inability to capture selling economic systems. However, as monetary values for staple trade goods are falling, many U.S. husbandmans are encompassing organic agriculture in order to capture high-value markets and increase farm income.

The largest rivals in the natural and organic nutrients retail industry are Whole Foods Market, Inc. , Trader Joe ‘s and Wild Oats Markets ( full list in Exhibit 2 ) . Wild Oats Markets is a 113-store concatenation, which operate under 12 or more different names in 24 provinces every bit good as Canada. One major failing of Wild Oats is the inconsistent signifier of client service and merchandise choice from shop to hive away due to an “ aggressive acquisition run ” lead by former CEO and laminitis, Mike Gilliland. Trader Joe ‘s operates over 200 forte supermarket shops in 19 U.S. provinces. Trader Joe ‘s concatenation is really attractive to the cost-conscience natural and wellness nutrient client. They are able to maintain the monetary values of their organic nutrient points low while still keeping the high quality.

Internal Analysis

Whole Foods Market, Inc. ‘s CEO and cofounder, John Mackey, has been with the company since its start in 1980. He has driven the company to its success at being the state ‘s largest natural and organic nutrients retail merchant. Mackey is really motivated in maintaining the company ‘s gross revenues high and growing rates increasing. The company utilizes a “ decentralised squad ” attack to hive away operations. The bulk of operational determinations are really made at the single shop degree. With this sort of shop operation, it is of import that each shop have an efficient “ squad leader, ” capable of doing higher-level determinations with merely the aid of an “ associate squad leader. ” Each facet of the shop is divided into a different section ; employees are so assigned in squads to each section. Customer service is a premier facet of operations as good. This method of operations has proven successful therefore far.

Whole Foods is an internationally known trade name name. It markets itself to its clients as a company chiefly concerned with “ advancing the verve and wellbeing of all persons. ” The chief company logo is “ Whole Foods, Whole People, and Whole Planet. ” Each country of this logo is an of import portion of Whole Foods ‘ selling program every bit good as mission statement. “ Whole Foods ” is carried out by the company geting the highest quality nutrient points and from providers, which claim to be the least processed, most flavourful and of course preserved nutrients. “ Whole People ” refers to the company ‘s employees. Whole Foods prides themselves on holding a really motivated, respectful and reasonably treated staff. “ Whole Planet ” symbolizes Whole Foods duty to take portion in their portion of duty for the planet as a company. They carry this out by being active protagonists of organic agriculture every bit good as advancing environment consciousness. In 2004 ‘s financial twelvemonth, less than.5 % of entire gross revenues went to advertisement and selling costs. Whole Foods relies on its loyal clients to distribute the word for the concern. Rather than concentrate on community-wide advertizement, Whole Foods is focuses on a national brand-awareness selling program.

Fiscal Analysis

Whole Foods outperforms its industry in all facets of fiscal ratios including liquidness, profitableness, debt and market value ( Exhibit 3 ) . To get down, the liquidness ratios of Whole Foods are on mean 35 % greater than that of the industry. This suggests that in footings of run intoing short-run fiscal duties, Whole Foods is more capable than its rivals in the industry. Profitability ratios for Whole Foods besides outweigh the industry. Specifically, Whole Foods has a net net income border of 3.2 % in 2005 dual that of the industry. Return on assets for Whole Foods are besides twice every bit much as the industry, while the return on equity is about equal to the industry ‘s. These profitableness ratios are grounds of Whole Foods success at bring forthing income within its huge portion of the market. The debt to equity ratio for Whole Foods in 2005 was 1.38 dual that of the industry. This implies that overall long-run solvency for Whole Foods is more suited than its industry. The price/earnings ratio of Whole Foods is 78 % higher than the industry, intending that the company earns significantly more per stock monetary value than its rivals in the industry. There is the overall noticeable tendency of growing among Whole Foods ‘ 2004 and 2005 financials every bit good as compared to the industry financials.

Assumptions/Challenge/Objectives

Assuming the U.S. economic system continues, as it is presently, disposable personal income will go on to diminish, doing Americans to go on to look for price reduction shopping chances. This could present itself as a possible menace for Whole Foods, sing the monetary value of its high-quality stock list. It is assumed that Americans will gravitate off from desiring to pass excess for high quality in order to salvage money on mediocre-quality points from price reduction shops.

The major challenge that Whole Foods Market, Inc faces is competition. Although Whole Foods is the state ‘s largest natural nutrient retail shop, its competition still raises concerns in certain locations and countries of concern. One obstruction in Whole Foods ‘ rapid growing scheme is providers. As stated before there is presently merely 1 per centum of cropland dedicated to organic agriculture in the U.S. Although organic agriculture, does hold its strengths in the market it besides has several failings, which keeps many mainstream husbandmans from following its methods.

The overall strategic aim of Whole Foods is growing. It plans to go on to spread out through opening new shops every bit good as geting bing shops. Whole Foods has been highly successful in opening new shops in ideal existent estate locations, which capture many different markets. The geting of bing shops has besides proven successful to the Whole Foods ‘ company ( Exhibits 5 ) . The acquisition of the bing shops is usually little ironss, which provide Whole Foods with more of the market, experienced employees and timeserving locations. In conformity with Whole Foods strategic objective, its fiscal aim is to increase gross revenues. The jutting gross revenues mark for 2010 has late been increased from $ 10 billion to $ 12 billion because its concern has been making so good.

Alternate Analysis

The first possible option that presents itself as a declaration to Whole Foods challenge of competition is the continued acquisition of bing shops and the gaps of new shops. Whole Foods has been really successful and efficient in this operation, in footings of its huge growing over the old ages. Another option, which can besides be combined with the old option, is the acquisition of providers. Whole Foods already owns several of its sellers, having more has the possible to diminish stock list costs every bit good as the fuss of negociating monetary values with outside sellers. However, along with the acquisition of sellers comes the added cost of keeping the sellers. The last option for Whole Foods would dwell of the lowering of its monetary values. With lowered monetary values, Whole Foods could keep its current market portion every bit good as increasing it. This is the most hard alternate in footings of execution. Whole Foods strives to supply its clients with high-quality points of which they must monetary value at high rates. This pattern turns off many cost-conscious clients. While cutting monetary values has the possible to increase volume gross revenues and market portion, it besides has the possible to stagnate or diminish entire gross revenues.

Resolution

The best declaration for Whole Foods would be to go on along its current strategic program. The overall growing by acquisition of bing shops and opening new shops has proven to be really successful every bit good as efficient. Because, the natural nutrients retailing industry is extremely disconnected and includes many smaller local and regional ironss, its in Whole Foods best involvement to obtain acquisitions that provide entree to advantageous markets, locations and experient employees. Whole Foods has a scheme to picking premier existent estate locations and geting little ironss of shops, which merely benefit its overall operations. Whole Foods has a system dedicated to seeking out new markets every bit good as perforating bing trade countries. As the lone foreseeable challenge to Whole Foods Market, Inc. is competition, if it continues its aggressive growing program so it will stay the largest national retail merchant of natural and organic nutrients.

List of Beginnings

Economic Research Service: www.ers.usda.gov/data/Organic/

William hoovers ‘ Online

MSNMoney.com

Standard and Poor ‘s NetAdvantage

Whole Foods Market, Inc 10-K Report- 2004.

Yokel! Finance

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