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Global Marketing Strategy And Planning

Executive Summary of Whole Foods Market Company

The report aims to select and analyse a global market opportunity for Whole Foods Market company which is an American multinational chain of supermarkets. The discussion throws light on the Structure, Capabilities, Resources, Products, Markets, Distribution and Supply of the company so that the opportunity can be evaluated and justified. It is identified that the company can expand its vegan product line in the global market by considering that people are becoming more health-conscious and acceptance and demand for these products are also increasing. The company possesses sufficient strength, capability and resources to successfully work in this direction.

Contents

Introduction

Company Structure, Capabilities and Resources

Products/ Markets/ Distribution & Supply (considering specific opportunity)

Competitive Environment, Industry Situation Relative to Potential Opportunity

Synthesis of Strengths Relative to Potential Opportunity

Strategic Fit Evaluation and Opportunity Identified and Justified

Conclusion

References

Introduction to Whole Foods Market Company

Whole Foods Market company is selected for the report which is an American multinational chain of supermarkets founded in 1980. The company registers its presence in the US, Canada and UK with 500+ stores and 91000+ employees (Whole Foods Market, 2020a). It is known for its food products which are free from artificial colours, preservatives, flavours, hydrogenated fats. In 2017, the company merged with Amazon as it had been facing continuous declines in its sales and revenue which also resulted in the closure of some of its outlets. The cause of this decline was increased competition, lower footfall in the stores and slowed sales growth. The report will throw light on Company Structure, Capabilities and Resources, Synthesis of Strengths Relative to Potential Opportunity, Industry Situation Relative to Potential Opportunity, Products/ Markets/ Distribution and Supply by considering the specific opportunity, Competitive Environment and Strategic Fit Evaluation and Opportunity Identified and Justified. The purpose of the report is to identify and justify any specific opportunity which is available for a product or product line of the company at the global level. The identified product line in this direction is the vegan product line and global opportunity for the same will be discussed further.

Company Structure, Capabilities and Resources

Whole Foods Market follows a four-tier hierarchy in which the fours levels are headquarters at global level, regional level offices, facilities and then individual stores. This kind of structure supports the company to manage its business in different nations by allowing it to effectively meet the needs of varying regions. The capabilities of the company can be defined in terms of its offerings, approach and reach to the customers. The company states that it sales the highest quality of natural and organic products with a focus on specific markets. Company does not sell the products which do not meet its standards. More than ten thousand suppliers are associated with the organization to delight and satisfy the customer base (Whole Foods Market, 2020b). Company is earning a good profit which will help it in the future growth and along with that, the support of Amazon will further help in expansion and growth. The company is considered to be highly competitive and switching cost is almost zero. The company has a scale advantage over its more direct competitors including The Fresh Market, Trader Joe's and Sprouts Farmers' Markets (SFM). The strong brand identity of the company is the greatest source of competitive advantage for the company. The resources of the company include more than 500+ stores and 91000+ employees. Amazon paid $13.7 billion in cash to buy the company (Kirsch, 2017). The company also has the support of Amazon which will be helpful in its expansion plan and thus, the capabilities and resources of the company will increase.

Products/ Markets/ Distribution & Supply (considering Specific Opportunity)

The products of the company include a huge variety of organic and natural products. Due to the focus on providing high quality and healthy products, the company generally does not possess products that are commonly available in other supermarkets. For examples; it does not sell the sugary sodas as it causes obesity in children. The product range of the company includes by-product fresh fruits, vegetables and herbs and by dietary preference includes keto-friendly, vegan, gluten-free, dairy-free, sugar conscious, , low fat, vegetarian, organic, whole foods diet and many more. Further, the categories are dairy and eggs, meat, prepared foods, body care, supplements, seafood, beverages and so on. The major markets of the company are in the US, Canada and UK. Distribution is done through both in-store and online mode. It involves more than ten thousand suppliers to meet the purpose. Partnership signed with Instacart allows to deliver products to their customers. Average size of its stores is 35000-40000 square feet and have easy access to roadways with clear visibility of the signages Whole Foods Market. (2020a). The supply is managed by a system of decentralized buying in which vendors are approved at the regional level with regards to standards like fair trade and non-GMO (Genetically modified food controversies). Then it’s the discretion of individual stores to decide the products that should be stored (Hugos, 2018). A rolling ten-year distribution arrangement has been done with North American food wholesaler (UNFI).

Competitive Environment, Industry Situation Relative to Potential Opportunity

The company is known to be a company with an expensive product range due to the lack of awareness among people regarding its discounts and special offers. The company is also knowns as 'America's Healthiest Grocery Store' and is also touted as the “100 best companies to work for”. However, in recent years, due to pressure margin and competition from old as well as new stores, the company is experiencing declining sales (Digital Initiative, 2015). The competitors include Walmart, Kroger, Sprouts of Trader Joe’s etc. The competitors are providing natural and organic products at a lower rate especially the large retail chains which have better pricing leverage. It is the same in the vegan product line and therefore, the company might face stiff competition in this segment when entered in the global market. Along with the big brands, there are many small firms which can also give competition in the global market People believe in local vendors more and consider their products to be better and trustworthy. However, it is also found that the company provides such products which are not easily available in every grocery store or other brands (Gray, 2019). The industry situation relative to the potential opportunity shows that the company needs to lower its prices or make strategies to make the customers buy its products even at higher prices. This will help for better expansion and growth in the global market.

Synthesis of Strengths Relative to Potential Opportunity

The potential opportunity presented for the company is significant because, after the COVID19 pandemic and various health issues, people are more inclined towards products which cause minimum harm and are healthy for them. The vegan line of products of the company are healthy and also meet the requirements of the generation. Further, the company has the strength of well-established supply chain, collaboration with Amazon, a variety of products in the vegan product line, well-established brand name and valued products. All these strengths will be helpful to grab the global opportunity present in the vegan product line. There is still a lack of any such global brand which is highly trustworthy, valued and provide a wide assortment of vegan products to the customers. The company should also ensure that it works on its weaknesses which can pose a threat from the competitors (Gray, 2019). The weaknesses of the company are high priced products and declining revenue. However, strengths can be utilized to deal with these weaknesses and perform well in the global market.

Strategic Fit Evaluation and Opportunity Identified and Justified

The organization is already operating successfully and its products are also appreciated. After the collaboration with Amazon, it can think of global expansion because now the company will have better access to supply chain in the global market, reach to retailers, suppliers and customers and can use its brand name to establish itself globally. Initially, the company can start this process by offering its products in two or three countries. After that, by evaluating the procedure, response and feedback, it can plan for further expansion. According to a report, it is expected that the global packaged vegan food market can reach USD 15.1 billion by 2026 (GlobeNewswire, 2020). Vegan products are plant-based and avoid meat, dairy products, eggs and other animal-derived ingredients. The trend for the consumption of vegan products is increasing because of the consumers' preference and increasing health consciousness. By considering the opportunity and capability of the company, it will be a right move to focus more on this particular segment. Further, the US is the worst affected nation by COVID19 pandemic and thus, the sales of these products will be on boom due to more focus towards health (He & Harris, 2020).

Conclusion on Whole Foods Market Company

It can be concluded that the company should focus on expanding its vegan product line in the global business market. The reason is the increased health consciousness of the people, impact of COVID19 and more demand of these products. Further, the company is already established in this sector and provides fresh, healthy and high quality organic and natural products. It is a trustworthy brand among people. The support of Amazon will be helpful to expand the business in the international market and thus, the chances of acceptability of the offerings will also be high. The strengths of the company are well-established supply chain, collaboration with Amazon, a variety of products in the vegan product line, well-established brand name and valued products. All these strengths can help to overcome the weaknesses and threats including high priced products, increased competition and decreasing revenue. The estimates also suggest that the vegan market is expected to grow high in the near future which presents a great opportunity for all such companies.

References for Whole Foods Market Company

Digital Initiative. (2015). Whole Foods Market: Adapting to a competitive natural foods grocery store environment. https://digital.hbs.edu/platform-rctom/submission/whole-foods-market-adapting-to-a-competitive-natural-foods-grocery-store-environment/

GlobeNewswire. (2020). Global Packaged Vegan Food Market is Expected to Reach USD 15.1 Billion By 2026 : Fior Markets. https://www.globenewswire.com/news-release/2020/01/27/1975271/0/en/Global-Packaged-Vegan-Food-Market-is-Expected-to-Reach-USD-15-1-Billion-By-2026-Fior-Markets.html

Gray, D. E. (2019). Doing research in the business world. Sage Publications Limited.

He, H., & Harris, L. (2020). The Impact of Covid-19 Pandemic on Corporate Social Responsibility and Marketing Philosophy. Journal of Business Research.

Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.

Kirsch., N. (2017). Here's How Much John Mackey, Whole Foods Cofounder And CEO, Is Worth: Forbes. https://www.forbes.com/sites/noahkirsch/2017/06/16/heres-how-much-john-mackey-whole-foods-cofounder-and-ceo-is-worth/#aa1c510432ff

Whole Foods Market. (2020a). Whatever Makes You Whole. www.wholefoodsmarket.com

Whole Foods Market. (2020b). Company Info. https://www.wholefoodsmarket.com/company-info

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