Whole Foods, founded by John Mackey, is one of the largest natural food grocery chains that is trying to bring a more organic and natural way of buying and consuming foods to its consumer base. In order to provide this to consumers, it is important that Whole Foods continues to grow in the organic food market. As they grow, there needs to be continuous supply for the demand for organic food. Synopsis of the Situation Whole Foods entered the industry hitting the ground running, making a name for them and positioning themselves as a leading natural food chain.
Whole Foods Market’s success continues to grow, but in this market, the owner knows that he or she must maintain this success and meet the company’s growth targets along with making a profit. Continuing to adhere to the company’s philosophy and mission statement has helped with their continual growth through mergers, new store openings and other purchases. Key Issues The issues that Whole Foods Market faces are maintaining quality and a reputation through a growing industry.
Harasta & Hoffman states the organic food industry is growing and Whole Foods finds itself competing hard to maintain its elite presence (Pearce & Robinson, 2010). The competition for Whole Foods continues to grow because of the growing demand for natural and organic food. Other issues that arise for Whole Foods are the competition with larger grocery chains, difficulties with suppliers, and the possibility of not having the products for the customers. Only 3% of U. S. farmland is organic, so there is limited output (Pearce & Robinson, 2010).
Whole Foods must also face the fact that store locations could become limited. When the consumer base and location sites are defined by those that have a college education, higher income and population density, one could be setting the business up for failure in the future. Prime store locations and the supply of organic foods are potential scarce resources (Pearce & Robinson, 2010). Whole Foods other problem comes from the competition of wholesalers. When selling organic natural foods one cannot package it and sell it in bulk. Define the Problem
John Mackey faces the dilemma of being able to meet the goals that have been set for his grocery business and still supply the consumer with quality organic and natural foods. This must be done without jeopardizing the reputation of Whole Foods while continuing the growth in the different communities and countries. John Mackey is uncertain about how to meet the company’s aggressive growth targets (Pearce & Robinson, 2010). Alternative Solutions Mackey knows that in order to keep this company going in the direction he wants, he must continue to provide quality food to his consumers, continue the growth of Whole Foods’, and bring in revenue.
The company will need to go after the disposable money and continue to set up stores in the local communities that believe in the mission and vision of Whole Foods. The disposable money comes from the aging baby boomers, urban singles, and women who work. Baby Boomers are the driving demand for organic food in general because they are health-conscious and can afford to pay higher prices (Pearce & Robinson, 2010). Baby Boomers are many urban singles and women who work and are more focused on a healthy diet, even if it means they must pay more.
Selected Solution to the Problem The solution that will bring everything together for Whole Foods is to stay on the top. In doing so, they may increase the growth rate and reach their targeted 12 billion in revenue in their financial operations. Though Whole Foods owners cannot control the supply of organic food from suppliers, they can make sure that they provide outstanding service and quality to their consumers and a work environment for their staff that is superior compared to others.
If Whole Foods stays true to their mission, there will be no doubt that they will be able to continue expanding whether it is through merging, acquisitions, or just opening new locations. The demand for organic and natural food is increasing as individuals continue to educate themselves on how such foods help them and their family’s lifestyle. Implementation To ensure that Whole Foods continues to grow, the company has implemented using marketing tools in certain locations to sell different organic products that are less in price.
They continue with their charitable contributions, which help spread word of mouth, thus getting more individuals in their store. By acquiring other companies and merging it also helps with the growth that Whole Foods is trying to maintain. Recommendations If Whole Foods Market wants to continue to grow and reach their 12 billion dollar revenue with its 300 plus stores, they must continue to provide quality products to their customers and a quality work environment for their employees.
Consumers stay loyal to brands if the company stays loyal to the consumer. In doing this, the consumer is more apt to draw more of their friends and family into supporting and putting their money into buying organic and natural foods. Conclusion Whole Foods Market has been steady growing and changing the way its consumers eat. The company has been supplying individuals with quality organic and natural foods. By maintaining and living up to their vision and mission, Whole Foods Market will continue to grow and meet goals that the company has established.
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