Kelley Parrigin

Kat Keivens
Bo Ghassemi
Kathy Flores
Miranda Niederle
Sheridan Sands
Jessica Nelson
Seda McCarthy
 Whole Foods Vision

• Our vision of a
sustainable future
means our children
will be living in a
world that values
human creativity,
diversity, and
personal choice.
 Mission
• Whole Foods — We search for the
highest quality, least processed,
most flavorful and natural foods
possible .…
• Whole People — Our people are our
company. They are passionate about
healthy food and a healthy planet….
• Whole Planet — We are committed
to helping take care of the world
around us….
 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
 General Environment
• Demographics
• Economic
• Political / Legal
• Socio / Cultural
• Technological
• Global
 The General Environment

Demographics -
• Only one demographic
governs WWI:
• Each store is located in a
neighborhood where 40%
have a college degree.
• This ensures being in an
area where people know
about nutrition.
 The General Environment
Economic –
 The General Environment
Political/Legal –
 The General Environment
Socio/Cultural –
• Representative on the National Organic
Standards Board
• Health conscious
• Consumer awareness-health education
• Sustainable agriculture
 The General Environment
Technological –
• Business Processes
– Website
– Paperless ordering system
• Green Mission
– Power monitors
– Wind power
– Solar and Biomass
 The General Environment
Global –
• More than 270 stores in North America
and the United Kingdom
• Whole Planet Foundation
• Whole Trade Guarantee program
 Industry Environment
• Threat of New Entrants
• Bargaining Power of Suppliers
• Bargaining Power of Buyers
• Threat of Substitute Products
• Rivalry Among Competing Firms
Threat of Substitute
Products
 Rivalry Among Competing
Firms

Internet Grocers

Mass
Local Farmers’
Merchandisers and
Markets
Super Centers

Whole Foods
Restaurants and
Supermarkets
Fast Food Chains

Convenience
Wholesale clubs
stores
 Strengths
• Quality food
• Customer “Experience”
• Store and Corporate Culture
• Image and Branding
• Loyal Customer Base
• Great Store locations for target market.
 Internal Capability
Analysis
• SWOT Analysis
• Value Chain Analysis
• Resources and Capabilities
• Sustainable Competitive Advantage
 Weaknesses
• Prices are high- “Whole Paycheck”
• Lacking on International Operations
• Narrow target market
• Marketing- rely on word-of-mouth
 Opportunities
• Expand private label brand
– Possibly work with large chains for generic
distribution
• Expand food selection
• In store classes
• Invest in marketing about the benefits of
eating healthy and organic.
 Threats
• Economy- downturn leads to less
disposable income and less luxury
• Market intrusions and competition
• Lax regulations on organic foods
 Value Chain Analysis
Primary Activities
• Partnering with Vendors
– Owns and operates
downstream suppliers
– Low interest loans
– New store inventory
 Value Chain Analysis
Primary Activities
• Purchasing Goods
– Stringent Quality
Standards
– Regional and
National Suppliers
– Local Suppliers
• Managing and
Distributing Inventory
– JIT operations
 Value Chain Analysis
Primary Activities
• Store Operations
– Duplication
– Customization
• Marketing and Sales
– Full service
– Rich sensory
experience
 Value Chain Analysis
Support Activities
• Human Resources
– Code of conduct
– 100 Best Companies
– 90% Employee
Satisfaction
 Value Chain Analysis
Support Activities
• General Administration
– Best Corporate Citizen
– Top-notch mgmt
– Talented real estate team
 Resources and Capabilities

Tangible Resources
• Financial
– Capacity to raise equity
– High borrowing capacity
– Strong financials
• Physical
– Stores
– Distribution Centers
– Support Facilities
 Resources and Capabilities

Tangible Resources
• Organizational
– Just-in-time logistics
– Innovative evaluation
and control systems
 Resources and Capabilities

Intangible Resources
• Human
– Strong bench strength
– Widespread involvement &
knowledge transfer
• Innovation
– Creative solutions
• Reputation
– Brand name
– Competitive advantage
 Resources and Capabilities

Organizational Capabilities
• Highly adaptive business
model
• Leveraging supplier
relationships
• Outstanding customer
service
Stakeholder Agenda
 Sustainable Competitive
Advantage?
• Not Likely because….
– Exit barriers are low
– Market is being infiltrated by lower priced,
more readily available stores.
– People looking for one stop shop
– Direct Competitors are making it even harder
for Whole Foods to differentiate themselves.
 Business Strategy
• Expansion
– Whole Foods is expanding internationally
– Expects to have a sizeable market position in
Europe 20 years from now
– Hopes to become a global company
• Roping in Customers
• Captive banners
• Giving customers a sense of “virtue”
 Business Strategy
• Information Sharing
– Collects and distributes sensitive information
to everyone.

• Community Giving
– Donate food and money to fight poverty
worldwide
 Organizational Strategy
• Caps on executive compensation
– No exec. Makes more than 14x the employee
average
• Teams
– Whole Foods is committed to self managing
teams which do their own hiring and
scheduling.
– To be hired, individual must be voted on by
2/3 of their team during “trial” period
 Organizational Strategy
• "Whole Foods is a social system,It's not a
hierarchy. We don't have lots of rules
handed down from headquarters in Austin.
We have lots of self-examination going on.
Peer pressure substitutes for bureaucracy.
Peer pressure enlists loyalty in ways that
bureaucracy doesn't.“ John Mackey,
Founder and Chairman
 Ethical Issues
• Treatment of animals
– Existing standards for humane animal
treatment can always be improved
– Thrives to help animals flourish and do it in a
way that is cheap enough for customers to
buy
• 14 Page code of conduct
– Addresses expected and desired employee
behavior
Financial Analysis
 Where Can Whole
Foods Improve???
• A more centralized strategy if they aim to
reach $10 billion in annual sales
Sources