Swot Analysis Of Whole Foods

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What is the goal of whole foods?
Whole Foods wants to sell the highest quality products to its customers and improving their health and well-being by providing affordable and nutritious food, both to higher and lower-income neighbourhoods and communities. The customers are their major stakeholders.
General Business Strategy:
Whole Foods are in the Natural/gourmet foods segment, which is approximately 7.2% of the entire food retailing industry in US.
Organic Differentiation is the key-stone of Whole Foods’ mission and operations. Hence, they use a Focussed Differentiation Strategy. Let’s analyse the industry in which Whole Foods operates, using Porter’s Five Forces Model:

Intra – Industry Rivalry:
• Rivalry among existing competition is
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• The growing wave of health campaigns in US has increased the supply and demand for organic foods. However, the organic food industry is quite fragmented, which creates a lot of options for the consumers.
Bargaining Power of Suppliers:
• The bargaining power of supplier is LOW.
• Store brands and private label brands are becoming increasingly popular in all the major retailers, which gives the retailers negotiation power over suppliers. The store brands typically cost 25% less and hence enjoying increasing demand.
• The reliance on National brands like Kraft, Kellogg, etc.is decreasing.
• However, all the retailers have to focus on Supplier relations because they need to watch out for the situation in which suppliers start integrating among themselves and increase their leverage over retailers.
• Whole Foods are known to focus on local suppliers and for maintaining health relationships with all their suppliers, which greatly enhances their operational efficiency.
Industry
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Let’s try to understand the internal environment of Whole Foods using VRIO framework:
V: Value
• Whole Foods biggest value is their high quality standards for all the products offered by them.
• It defines quality in terms of the ingredients, taste, freshness, nutritive value, etc. in their products.
• The store environment and customer service increase their value proposition to the customers.
R: Rareness
• There are a lot of competitors which sell natural and organic products, but they do not differentiate themselves like Whole Foods.
• Whole Foods focus on health and community has been replicated not only in their products, but also in their stores, which establish their green mission by being the first major retailer to offset 100% of energy use (using wind energy credits).
• For Whole Foods, customers are first, employees second and stakeholders third, which shows their emphasis on quality considerations and not price and profits.
I: Imitability
• Others have tried to sell natural and organic foods, but have not been as efficient and successful as Whole

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