Whole Foods Markets

Introduction
Whole foods is the world leading natural

and organic supermarket. It offers variety

of products.
John Mackey open Saferway store in
1978, Merged with Clarksville Natural
Grocery in 1980 as a result World Foods
is formed.

Cont
Having 264 stores in US, 6 in Canada and 5

stores in UK
A third of its existing square footage derived
from acquisition
World foods have 50,000 employees with $
6.6 Billion of revenues
Head Quarter is in Austin, Texas, Current
CEO is John Mackey

Internal and External

Analysis

SWOT Analysis
Strengths

Opportunities

Brand Recognition
Good Quality
Huge selection/variety
Positive Employee Environment
Large, customized stores
No. 16 on Fortunes Worlds

through media
Emphasis on organic farming

Expansion
Consumer Health Benefits

Most Admired Companies list

Weaknesses
Concentrated just on US

market
Relative Slow Growth
Limited number of suppliers
Advertising Budget is very low

Threats
Supermarkets introducing

organic products
Increasing inflation
Low spend per trip due to
higher prices

Internal Factor Analysis (IFE)

Key Internal factors

Weight

Rating

Weighted
Score

Strengths
0.12
0.15
0.10
0.08
0.10

4
4
4
3
4

0.48
0.60
0.40
0.24
0.40

0.05

0.15

Concentrated just on US market

Relative Slow Growth
Limited number of suppliers
Advertising is Budget very low

0.15
0.05
0.10
0.10

1
2
1
2

0.15
0.10
0.10
0.20

Total

1.00

Brand Recognition
Good Quality
Huge selection/variety
Positive Employee Environment
Large, customized stores
No. 16 on Fortunes Worlds Most Admired
Companies list
Weaknesses

2.82

Interpretation (IFE) Matrix

The company IFE score is 2.82 which is above
the average score 2.5. It indicates that the
company is internally very strong, if the
company use its strength effectively it will
minimize the weaknesses of the company.

External Factor Evaluation (EFE)

Key External factors

Weight

Rating

Weighted
Score

Opportunity
0.25
0.20
0.15

4
2
3

1.0
0.40
0.45

Supermarkets introducing organic products

Increasing inflation
Low spend per trip due to higher prices

0.15
0.15
0.10

4
3
2

0.60
0.45
0.20

Total

1.00

Expansion
Consumer Health Benefits through media
Emphasis on organic farming

Threat

3.10

Interpretation (EFE)
Matrix
The EFE total score is 3.10 which is above the
average score of 2.5, indicate that the
company is replying in an excellent way to
current possibilities and risks in its industry. In
other terms, the company's techniques
successfully take advantage of current
opportunities and reduce the negative effects
of exterior risks.

CPM
(COMPETITIVE PROFILE
MATRIX)

CPM
Critical success factor

weight

Whole Foods Market

Trader Joe's

Rating

Score

Rating

Score

Brand Recognition

0.20

0.80

0.80

Product Quality

0.13

0.52

0.52

Management

0.10

0.20

0.40

Price Competitiveness

0.15

0.30

0.45

Financial Position

0.15

0.30

0.45

Customer Loyalty

0.15

0.45

0.60

Global Expansion

0.12

0.24

0.24

Total

1.0

2.81

3.46

Interpretation (CPM)
The Competitive Factor Evaluation Matrix
reveals that Whole foods is only partially
positioned against its competitor Trader Joes.
Shoppers spent only few dollars at Whole
Foods while shopper spent more dollars in
nearest competitor because whole foods
prices are high. They have to provide high
quality on low cost and fresh foods in order to
maintain its profitability.

Problems

Minor Problems
Expand into smaller area where

population have low income

Focus on niche market
Less number of Suppliers as

compare to competitors, results

low growth
Advertising Budget is very low

Major Problem
Decision Making

Whole foods management is acquiring small

competitors and building new stores, through
which their business is only expanding in US,
Management is not taking decision to expand
their business in UK and Canada.

Alternative Strategies

Strengths - S

TOWS
MATRIX

Opportunities O

1. Expansion
2. Emphasis on organic
farming
3. Consumer Health
Benefits through
media
Threats T

1. Supermarkets
introducing organic
products
2. Increasing inflation
3. Low spend per trip
due to higher prices

1.
2.
3.
4.

Brand Recognition
Good Quality
Huge selection/variety
Positive Employee
Environment
5. Large customized stores
6. No. 16 on Fortunes
Worlds Most Admired
Companies list

Weakness W

1. Concentrated in US
2. Relative Slow Growth
3. Limited number of
suppliers
4. Advertising Budget is
very low

SO strategies

WO strategies

(S1,O1)
(S2.O3)

(W2,O1)
(W3,O2)

ST strategies

WT strategies

(S1,S5,T1)

(W1,T1)
(W3,T3)

Interpretation
(S1,O1): Whole foods have to expand their market. Its an opportunity for
them because their brand is highly recognized if they enter into another
market it will be beneficial( Market development)
(W2,O1): Whole foods have the opportunity to enter into another market by
doing this they can overcome their weakness (Market Development)
(S1,S5,T1): Whole foods have recognized products and large number of
stores in US they have to advertise their products in different ways to
attract their customers. They should announce shopping incentives. Threat
will be overcome by doing this. (Market penetration)
(W1,T1): Whole foods can overcome its weakness and threat by expanding
its Market from US to other Markets.( Market Development)

Internal Strategic Position

External Strategic position

Financial Strengths (FS)

Environmental Stability (ES)

Return on Investment
leverage
Liquidity
Earning per share

Total
Average

+3
+2
+2
+3

+10
+2.5

Price range of Competing products

Competitive pressure
Price elasticity of demand

Total
Average

Competitive Advantage (CA)

Market Share
Product Quality
Customer Loyalty
Control over suppliers

Total
Average

-3
-4
-3

-10
-3.3

Industry Strength (IS)

-3
-2
-2
-4

-11
-2.75

Growth Potential
Profit Potential
Financial Stability
Productivity, capacity utilization

+3
+3
+2
+4

Total
Average

+12
+3

F
+ S
7

Conservativ
e

Aggressiv
e

+
6

X-axis =CA + IS

+
5

=
-2.75+(3)

+
4
CA
-7

-6

-5

-4

-3

+
3
-2
+
-1
2
-2
+
1-3
-4

= 0.25

-1

+1
+6

+2
+7

+3

+5

IS

Y-axis = FS + ES
= 2.5+(3.3)
=-0.8

-5
-6

Defensive

Competiti
ve

-7
E

Interpretation
According to the space matrix score HP falls in

the Competitive Quadrant . Strategies

they can apply are
They can focus on Market development
because they are facing very tough
competition in US market and they are having
only few stores in the foreign markets
They can also use Market penetration and use
some different advertisement methods to
attract customers.

IE
(INTERNAL-EXTERNAL
MATRIX)

EFE TOTAL WEIGHTED SCORE

3.1

IFE Total Weighted Score

2.82
4.0

Strong 3.0
4.0

3.0

Average 2.0
2.99

2.0

Weak 1.0
1.99

ii

iii

iv

vi

vii

viii

ix

High

3.0 4.0
3.0

Medium

2.0 2.99
2.0

Low

1.0 1.99
1.0

Interpretation
Whole foods falls in first region of IE matrix

and there main focus will be on GROW AND

BUILD and strategies which whole foods has
to focus on are
Market development

Market penetration

QSPM
(QUANTITATIVE STRATEGIC
PLANNING MATRIX)

Key Internal Factors

Strengths

Market
Development

Market
Penetration
Weight

AS

TAS

AS

TAS

Brand Recognition

.12

.24

.48

Good Quality

.15

.30

.45

Huge selection/variety

.10

.20

.30

Positive Employee Environment

.08

Large, customized stores

.10

.40

.20

No. 16 on Fortunes Worlds Most

Admired Companies list

.05

.10

.10

Concentrated just on US market

.15

.45

.60

Slow Growth

.10

.10

.30

Limited number of suppliers

.15

.30

.15

Weaknesses

Total weight

1.00

Market
Penetration

Key External Factors

Opportunities

weight

AS

TAS

Market
Development
AS

TAS

Expansion

.25

.25

1.0

Consumer Health Benefits

through media

.20

.60

.20

Emphasis on organic farming,

.15

.30

.45

Super markets introducing

organic products

.15

.75

.60

Increasing inflation

.15

.15

.30

Low spend per trip due to higher

prices

.10

.30

.10

Threats

Total weight
Total Attractive Score

1.00
4.44

5.23

Recommended Strategy and

Plan of action
Market Development

Whole foods is competing in very unstable industry

and their business is almost situated in one

industry, if they face tough competition in that
market so they will have no other market to rise
their profits
They have to expand their business e in the UK and
Canada as well as in other markets, which will help
Whole foods to focus on stable market and also
take the 1st mover advantage from competitors