Instructor: MR.

SHAFQAT ULLAH Group Members: WAQAS AHMED MALIK (23478) JAHANZEB HUSSAIN QURESHI (23409) OSAMA BIN Shamim (23435) TAHIR IQBAL

INTRODUCTION

founded in 1980 as a local supermarket and has now become worlds largest retail chain of natural and organic foods supermarkets

CORE VALUES:

Selling the Highest Quality Natural and Organic Products Available Satisfying and Delighting Our Customers Supporting Team Member Happiness and Excellence Creating Wealth through Profits & Growth Caring about our Communities & Our Environment Creating ongoing win-win partnerships with our suppliers

JOHN MACKEYS VISION FOR WHOLE FOODS

To become an international brand synonymous not just with natural and organic foods but also with being the best food retailer in every community in which whole food stores were located.
MISSION:

Whole Foods, Whole People, Whole Planet Incorporating the highest quality, least processed, unadulterated foods with a decentralized, self-directed team culture and a commitment to helping to take care of the world through active support of organic farming.

STRATEGIES: Growth Strategy: 16 acquisitions in 24 years In 1984, Whole Foods Market began its expansion out of Austin, expanding to Houston and Dallas, and later New Orleans in 1988. Whole Foods moved into Manhattan in 2001 and in 2002 expanded into Canada.

Wild Oats On February 21, 2007, Whole Foods Market, Inc. and competitor Wild Oats Markets Inc. announced the signing of a merger agreement.

FTC Antitrust Case The FTC challenged the acquisition of Wild Oats Markets, Inc. arguing anticompetitive consequences.

STRATEGIES: Store Sizes & Locations Strategy: Whole Foods store sizes range between 40,000 square feet to 60,000 initially. Their biggest store is of size 99,800 square feet located in London. Their location strategy was to open stores in upscale areas of metropolitan centers. Their most stores were located in high traffic shopping locations

Store Layout & Merchandising Strategy: Whole Foods Market did not have a standard layout for stores. Each stores layout is designed according to the particular site and building configuration . Their merchandising strategy was to create an inviting and interactive store atmosphere. They use bright colors for product displays.

Store Operations: It employs between 85 and 600 team members organized into minimum 13 teams. Each team is led by a leader. Whole Foods has given its team members full authority to make many decisions at the store level.

STRATEGIES: Product Line: The products and brands offered vary from store to store because stores are of different sizes and have different clients. Whole Foods have around 30,000 natural, organic and gourmet food products.

Marketing & Customer Service: 0.5 %of its revenue is assigned for advertising. They prefer primarily on word-of-mouth recommendations. Each of its stores has a separate budget for marketing. The corporate marketing budget is allocated to region wide marketing efforts. Whole Foods has empowered its team members to do whatever they want to please the customers.

Compensation & Incentives: The company has a gain sharing program which is based on the profits of each store.

Purchasing & Distribution: Most of the purchasing of Whole Foods is from local, regional and national vendors. It owns two produce procurement centers. It operates nine regional distribution centers

ISSUES & CHALLENGES

Increasing Competition Competitors include but are not limited to local, regional, national and international supermarkets Whole Foods competes in many markets Major Competitor Trader Joe's in Monrovia, California. Offers similar organic foods. In addition to Trader Joes and local organic food stores, the company is facing increasing competition from mainstream U.S. supermarket chains hoping to capitalize on popular consumer trends. Wal-Mart Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business. To take some of the market share from specialty stores, Wal-Mart has launched two new upscale endeavors, doubling organic produce and dairy selections and opening a 217,000-square-foot store in Plano, Texas featuring a sushi bar, specialty foods and a wine department. The Safeway Lifestyle Pleasanton, Calif.-based Safeway, the nations third largest supermarket chain. Safeway opened 21 new Lifestyle stores and completed 293 remodels to the upscale format in 2005. The companys shares were up by the end of 2006.

ISSUES & CHALLENGES

Economic Recession During the summer of 2008, the companys stocks and sales margins took a hit as a Perfect storm of higher gas prices. Higher food costs hit the US and inflation and growing unemployment diminished consumers purchasing power. As the recession deepens, customers have returned to buying cheaper food. Consumers are avoiding any products that might be considered lavish or more than a necessity. This luxury shame can cut sales of Whole Foods products because organic foods in general are perceived to be expensive . Whole Foods took the following proactive measures to the response to the drop in sales and stock prices: Implementation of cost-cutting measures (including the elimination of 306 positions). Cut all discretionary capital expenditure. Lowered number of planned new store openings. Whole Foods has implemented a new marketing strategy to combat the perception of high prices. The Whole Deal offers coupons. These brochures are found in stores and invite the shopper to save through price promotions. 3 for $3 Entertaining on a Budget Seasonal Savings Budget-Conscious Recipes

CONCLUSION: Whole Foods Market is performing exceptionally well from strategic perspective. All its work and doings are in accordance with the strategies they have made, their motto and their core values. It has also made strategies that are feasible for the purchasing and distribution of items. All these strategies are in accordance with the companys requirement and thus the company maintains a competitive advantage over its rivals due to its sustainable implement ation of strategies for achieving its goals and managing the company. However the companys main motto does not mention the factor of customer satisfaction. It should mention the importance of cu stomers for the company as customers should be the first priority of any company.

RECOMMENDATIONS: Cost Cuttings Increased Marketing Entry into New Markets Rebrand image for London stores Loyalty Club