In recent years’ consumers have turned their attention to a healthier way of life and the so called “health-related labels” in products. The healthier body effect delivered by organic and natural foods has became a worldwide mission to many consumers and competitive firms. As previously noted this awareness is expected to increase up to 16% by 2020 (Burnaby, 2015). In order to understand the relationship between higher product quality and supply; reflecting in increase in price and the fluctuation, if any in demand, we will analyze revenue growth, sales, customer behaviors and the price elasticity of demand a company like Whole Foods has experienced for the last 5 years. As noted above this The graph below illustrates the total revenue the
Kroger is using cost-based strategy to sell organic products as according to their Executive Vice President Mike Donnelly, their customers are not ready at the moment to pay higher prices for organic products so they target to sell organic products at a price closer to traditional foods and they are happy with small/no margins at the moment (Kowitt, 2015). Kroger is one of the most analytics’ supermarket chains as they are targeting the future because organic grocery products market is expected to grow by 2018 (Forbes, 2015). In the 2014 fiscal year Kroger’s total sales, total sales revenue was $108b and $11b was contributed by organic products whereas Whole foods sales revenue was $14b (Forbes, 2015). Next Trader Joe’s is also a well positioned rival for Whole foods. They have 461 stores and revenue was $8.63b in 2015 and expected to grow by 2.5% in future years (Business Insider, 2016).
Another latest news just released from Kroger's chairman and CEO, and the news is that the Kroger and Ocado is going to announce an exclusive partnership agreement to accelerate the Kroger's creation of seamless digital shopping experience for whole America's family in the United States America. Its very first time that an alliance will bring to United States an unparalleled technology underpinnings of the Ocado smart platform, which includes home delivery, online ordering and automated fulfillment. For enhancing the Kroger's digital shopping and robotics capabilities and helping expand its seamless coverage area in the Unites States to provide every American family with the convenient and easy shopping from anywhere, anytime and anything,
For these reasons, it is imperative to continue to adapt and monitor the market place to be vigilant against threats to market share (Jindal, Sarangee, Echambadi & Sangwon, 2016). In the case of Whole Foods 365, Trader Joe’s will require ample efforts to minimize the effect and threat it and others will
1. Through extraordinary customer services, Whole Food Inc aims at nourishing and making the customer trips to their stores a delightful experience. The company serves its customers competently, efficiently and knowledgably. The customers are then satisfied and this will make the customers attract more customers into the business by advocating on the business.
Porter’s Five Forces Model of Competition As explained below, Whole Foods Market faces intense pressure in four of the five elements of competition. For WFM to remain competitive and continue its dominance within the industry, they must thoroughly address each of these forces. To continue their profitable ways, WFM must identify strategies to reduce cost, enabling them with the ability to shake the “Whole Paycheck” stigma. Intensity of Rivalry: With a highly saturated retail industry, it’s no surprise Whole Foods Market practices under strong external forces that contribute to highly competitive rivalries. Companies within this sector compete in many different aspects including price, service, and quality.
John Mackey’s story of how he was once a high school dropout and is now the CEO of Wholefoods is inspiring. His story begins with him dropping out of school and opening a store called Saferway after barrowing $45,000 from friends and family. Currently he pays himself a $1salary. Although there are other competitors with better pricing on the market such as Trader Joe’s, Kroger, Sprouts Farmers Market Wholefoods has a firm loyalty base.
Established in 1978, Whole Foods Market opened its first store in Austin, Texas in 1980. This natural supermarket was the first certified organic food supermarket in the U.S. Now, 456 stores stretch across the nation, Canada, and the U.K. (see appendix A with the various states and locations) with 35,000-50,000 SKU’s lining the shelves. Whole Foods sets high standards for not only it’s product freshness but also expectations of employees. High customer service, environmental stewardship, positive impact on local and global communities, and high return on invested capital has made Whole Foods Market an industry leader being 5th largest public produce and food retailer.
They believe that the solution to their problems is by laying off its employees, without taking into account that they are at a fault as a whole. This relates to the assumption “Production of data is not affected by organizational politics” from “Give the Kid a Number”. It is clear that the Whole Foods management is laying off their employees in order to make up for their mistakes. Indeed they haven’t stated this, which is basically showing that when people are in the position to be able to influence data whatever way they like in order to suite their own purposes (Garham, 1982). Through further research I found that Whole Foods is opening up 365 new stores, this is inconsistent with their conclusion to layoff employees.
I’m not saying that they should get rid of the majority of the products that they sell and swap them out for different cheaper products. However, if they take a significant portion of what they sell, and swap it out for more affordable products, the consumers can walk in knowing that there are more than two or three things they’ll be able to buy, without breaking the bank. Whole Foods does very well in business, as well as customer satisfaction. If Whole Foods wants to come out on top, instead of just being below the top five supermarkets in customer service, they need to make a few changes, so that they beat their competitors. By making changes they will be able to please all of the
AMA INTERNATIONAL UNIVERSITY BAHRAIN MBA PROGRAM PMBA623 – SURVEY OF ECONOMICS FINAL PROJECT SET A PROJECT 1. Illustration of the supply and demand curves: A. A shift occurs in the demand and supply curve for laptops to the right since we assume that the demand increased less than the supply and as a result the demand and the supply curves will shift or move to the same direction.
Every industry is becoming more competitive year by year. The grocery store sector is one prime example of this trend. Kroger Inc. is currently experimenting with new product lines, refining their core business, utilizing technology to better serve their customers, and selling off segments of their corporation. The company realizes they need to innovate or die and that in order to retain and attract customers, selling groceries is not enough. Consumers will voice their opinions on their efforts by staying with Kroger or breaking off and giving their business to one of Kroger’s many competitors.
Because of the high availability of substitute products and the cheaper prices of these products, Whole Foods Market experiences a strong force from substitutes. There is a high possibility for customers to move back to high-quality non-organic food corresponds to the low switching cost. (Strategic direction: to focus on product quality; also necessary to offer
Whole Foods has successfully evolved into being one of the largest organic and sustainable organizations by performing management tactics in a unique, collective fashion. Whole Foods fuses management concepts such as organization, culture, smart financial measures, and quality customer and product care to promote a holistic health approach to business for not only the company, but also the consumer. Mission of Whole Foods The primary resource that validates the concept of Whole Foods being an organization that upholds a sustainable, holistic health approach to business and management is to look at the company’s mission statement. In summarization, Whole Foods states that they make it a priority to sell the highest quality natural products
Therefore, the acquisition of Whole Foods Market will allow Amazon to reach a market that Amazon has not fully reached. Whole Foods Market is a grocery store “seeking out the finest natural and organic foods available, maintain the strictest quality standards in the industry and have an unshakeable commitment to sustainable agriculture” (Wholefoods). Whole Foods tangible resources include their brick and mortar stores and their financial capacities. Their intangible resources are the ways they organize Whole Foods, their employee strives for customer service and their brand reputation. Furthermore, Whole Foods core competencies include highly healthy and organic products that Whole Food offers, their brand reputation, the reason why is because