Slide 1

Whole Foods Markets

IntroductionWhole 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.

2ContHaving 264 stores in US, 6 in Canada and 5 stores in UKA third of its existing square footage derived from acquisitionWorld foods have 50,000 employees with $ 6.6 Billion of revenuesHead Quarter is in Austin, Texas, Current CEO is John Mackey

Internal and External Analysis SWOT AnalysisStrengthsBrand RecognitionGood QualityHuge selection/variety Positive Employee EnvironmentLarge, customized storesNo. 16 on Fortunes Worlds Most Admired Companies list

WeaknessesConcentrated just on US marketRelative Slow GrowthLimited number of suppliersAdvertising Budget is very low

OpportunitiesExpansionConsumer Health Benefits through mediaEmphasis on organic farming

ThreatsSupermarkets introducing organic productsIncreasing inflationLow spend per trip due to higher prices

Key Internal factorsWeightRatingWeighted ScoreStrengthsBrand RecognitionGood QualityHuge selection/variety Positive Employee EnvironmentLarge, customized storesNo. 16 on Fortunes Worlds Most Admired Companies list

0.120.150.100.080.10

0.05

44434

3

0.480.600.400.240.40

0.15

WeaknessesConcentrated just on US marketRelative Slow GrowthLimited number of suppliersAdvertising is Budget very low

0.150.050.100.1012120.150.100.100.20Total1.002.82Internal Factor Analysis (IFE)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.

Key External factorsWeightRatingWeighted ScoreOpportunityExpansionConsumer Health Benefits through mediaEmphasis on organic farming

0.250.200.15

423

1.00.400.45

ThreatSupermarkets introducing organic productsIncreasing inflationLow spend per trip due to higher prices

0.150.150.10

432

0.600.450.20

Total1.003.10External Factor Evaluation (EFE)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)

CPMCritical success factorweightWhole Foods Market Trader Joe'sRatingScoreRating ScoreBrand Recognition0.2040.8040.80Product Quality0.1340.5240.52Management0.1020.2040.40Price Competitiveness0.1520.3030.45Financial Position0.1520.3030.45Customer Loyalty0.1530.4540.60Global Expansion0.1220.2420.24Total1.02.813.46Interpretation (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.ProblemsMinor ProblemsExpand into smaller area where population have low incomeFocus on niche marketLess number of Suppliers as compare to competitors, results low growthAdvertising Budget is very low

Major ProblemDecision 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 StrategiesTOWSMATRIXStrengths - S

Brand RecognitionGood QualityHuge selection/variety Positive Employee EnvironmentLarge customized storesNo. 16 on Fortunes Worlds Most Admired Companies list

Weakness W

Concentrated in USRelative Slow GrowthLimited number of suppliersAdvertising Budget is very low

Opportunities OExpansionEmphasis on organic farmingConsumer Health Benefits through media

SO strategies

(S1,O1)(S2.O3)WO strategies

(W2,O1)(W3,O2)

Threats TSupermarkets introducing organic productsIncreasing inflationLow spend per trip due to higher prices

ST strategies

(S1,S5,T1)

WT strategies

(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 PositionExternal Strategic positionFinancial Strengths (FS)Environmental Stability (ES)Return on InvestmentleverageLiquidityEarning per share

TotalAverage+3+2+2 +3

+10+2.5Price range of Competing productsCompetitive pressurePrice elasticity of demand

TotalAverage-3-4-3

-10-3.3Competitive Advantage (CA)Industry Strength (IS)Market ShareProduct QualityCustomer LoyaltyControl over suppliers

TotalAverage-3-2-2-4

-11-2.75Growth PotentialProfit PotentialFinancial StabilityProductivity, capacity utilization

TotalAverage+3+3+2+4

+12+3 -7 -6 -5 -4 -3 -2 -1 +1 +2 +3 +5 +6 +7+7+6+5+4+3+2+1-1-2-3-4-5-6-7AggressiveConservativeCompetitiveDefensiveISCAX-axis =CA + IS = -2.75+(3) = 0.25Y-axis = FS + ES = 2.5+(-3.3) =-0.8

FSESInterpretationAccording to the space matrix score HP falls in the Competitive Quadrant . Strategies they can apply areThey 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 marketsThey can also use Market penetration and use some different advertisement methods to attract customers.

IE (INTERNAL-EXTERNAL MATRIX)i ii

iiiivvviviiviiiixStrong 3.0 4.0Average 2.0 2.99Weak 1.0 1.992.03.04.0IFE Total Weighted Score 2.821.02.03.0Low1.0 1.99Medium2.0 2.99High3.0 4.0EFE TOTAL WEIGHTED SCORE 3.1Interpretation 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 developmentMarket penetrationQSPM(QUANTITATIVE STRATEGIC PLANNING MATRIX)Key Internal FactorsMarket Penetration Market DevelopmentStrengthsWeightASTASASTASBrand Recognition.122.244.48Good Quality.152.303.45Huge selection/variety .102.203.30Positive Employee Environment.08--Large, customized stores.104.402.20No. 16 on Fortunes Worlds Most Admired Companies list.052.102.10WeaknessesConcentrated just on US market.153.454.60Slow Growth.101.103.30Limited number of suppliers.152.301.15--Total weight1.00 Key External FactorsMarket PenetrationMarket DevelopmentOpportunitiesweightASTASASTASExpansion.251.254 1.0Consumer Health Benefits through media.203.601.20Emphasis on organic farming,.152.303.45 ThreatsSuper markets introducing organic products.153.754.60Increasing inflation.151.152.30Low spend per trip due to higher prices.103.301.10Total weight1.00 Total Attractive Score4.445.23Recommended Strategy and Plan of actionMarket 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 profitsThey 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