Case Analysis
Whole Foods Market
Beth Anders, Victoria Fields, Jesus Tovar
University of Texas, El Paso
HISTORY
Whole Foods Market is a market that provides the highest quality, least processed,
most flavorful and natural foods for its customers. The first market was opened in 1980
by 19 dedicated people, and now has more than 310 stores in North America and the
United Kingdom. Whole Foods Market’s core values lead them to success. Those values
include selling the highest quality natural and organic products available, satisfying and
delighting their customers, and caring about the community and the environment. With
their GoGreen mission on hand, they are glad to report that they are an example to many large
retailers around the world. With more profits every year, this publicly held company’s
vision drove them to grow throughout the world.
SWOT Analysis of Whole Foods
A SWOT Analysis is a planning method used to evaluate Strengths, Weaknesses/
limitation, Opportunities, and Threats in a business. It consists of specifying the
objectives of a certain business and identifying both internal and external factors of
the objective whether they are favorable or unfavorable. Since Whole Foods is such
a large company, there are many factors involved in completing a SWOT Analysis.
Below is a list for each category that is involved in a SWOT Analysis.
STRENGTHS
*Whole Foods Market owns and operates a chain of organic foods supermarkets
through several wholly owned subsidiaries in the US, Canada and the UK.
*Whole Foods started in Austin and grew from the ground up, expanding into
Canada and into the United Kingdom by acquiring seven of the Fresh & Wild stores.
*The company recorded revenues up into the $7 million during the financial
year ending September 2008, which was a 20% increase of the year of 2007, and
continue to have 25 years of double-digit revenue growth.
*Whole Foods changed the industry of health food stores by becoming a huge
company with a variety of products that were less expensive than smaller stores.
*Whole Foods began to offer catering, as well as in-store cooking classes and free
tours for anyone who had allergies and wanted to find foods they were able to eat.
*Whole Foods has a hip image and attracts a younger crowd that might usually avoid
grocery shopping.
WEAKNESSES
*Right now, the US government provides money to support the corn growers, but
not the organic farmer. Therefore, companies not utilizing organic ingredients can
sell cheaper food in a faster timeframe. This puts Whole Foods at a disadvantage.
*Since there are a small number of organic farmers, it is hard to meet the needs of
the American food system.
*”Whole Foods Market - often referred to in the US by the nickname 'Whole Pay Check'”
(Bokaie, 2008) which is another indication that the public does not think the store offers
competitive pricing that will save them money.
OPPORTUNITIES
*Eating healthy is becoming increasingly more important to the world. Whole Foods
is there to pull these consumers into their stores. Many people think that healthy food
is more expensive than other foods, but most store brands are comparable in price.
“While a Whole Foods shopper may spend extra on toilet paper, for example, he could
make up for it if he also buys dish soap, which tends to be cheaper there than at other
stores.” By expanding their reach to local communities, Whole Foods has an opportunity
to change the attitude and overall health of these customers.
*Due to the economic downturn recently, Whole Foods is introducing a free rewards
card. After a customer has accumulated a certain amount of points, they will get a
discount on their next purchase or get something free.
*Whole foods can build its brand identity to change the way consumers think of organic
foods and its affordability.
THREATS
*Whole Foods has competition such as HEB, Wal-Mart, and any other supermarket
that carries organic or allergy free foods.
*During this economic downturn, Americans are watching their money more closely and
some may believe Whole Foods is too expensive.
COMMUNICATION STRATEGY
Whole Foods has always had a goal to interact with their customers one way or another,
whether it was events within their store, ads in newspapers, or by word of mouth.
Originally, when Whole Foods first started their company and began to reach out to their
customers, they started with just one Twitter account -@wholefoods. As Twitter began to
gain momentum and Whole Foods began to get notoriety, they realized that just one
account for all their customers was not going to cut it. They encouraged individual stores
to set up their own Twitter accounts to reach out to that community for events and social
gatherings, and to keep those around that store in a certain area, up to date with special
events. Being able to reach out to their customers one way or another is how Whole
Foods plans to keep their business growing. Whole Foods is just like any other company
though and does get those who complain about their company on their media websites.
Being a non-technological company, Whole Foods is still trying to find a way to live in
this age of social media.
CURRENT COMMUNICATION CHALLENGES
Whole Foods is a business that has already seen exponential growth since its
inception; in order to continue to grow, it must focus on communication with
potential customers and local businesses. The primary misconception associated
with Whole Foods (or any health food store chain) is that food that is good for you
is also extremely expensive, especially when compared to discount store groceries
such as Walmart. Whole Foods must prove to its potential customers that the food
is affordable and that any extra expense they might incur (comparatively speaking)
is worth it from a personal health standpoint. The question becomes, “How do we
reach people in our community and prove that we are the best choice for foods and an
affordable one?”
Proposed Solution(s)
INCREASED SOCIAL MEDIA CAMPAIGNS
Whole Foods already has an online presence, but since they have chosen not to
participate in television advertisements or other stereotypical methods to grow their brand
and customer base, they must be aggressive with online advertisements and community
outreach.
Facebook:
Invite users to “like” Whole Foods Facebook page. On this page, post daily articles
that feature cost effective recipes that utilize products/foods offered at Whole Foods
stores. Additionally, post cost comparison charts for products offered at Whole
Foods and lower end grocery chains. Then, compare these foods from a nutritional
standpoint highlighting the differences in how lower end grocery stores grow or
purchase food products as opposed to the careful manner in which Whole Foods
grows and develops their foods.
A major competitor for Whole Foods in the UK is their chain of grocery stores, Tesco.
Tesco has realized the potential of using social media platforms to increase business.
Head of Research and Development for Tesco, Nick Lansley, states, “We recently
launched a Friday Frenzy campaign [on Facebook for the Clothing at Tesco unit] and
were able to build an audience of more than 40,000 people in a week.” (Shields, 2010) If
Whole Foods became as aggressive with their social media outreach, they could meet or
exceed these results.
Twitter:
Whole Foods has been using Twitter as a method of communication. Since
Twitter’s platform offers immediacy with feedback and notification, this is
an excellent avenue to pursue further in order to let customers know of sales,
nutritional tips, upcoming community outreach offered through the company and
just as with Facebook, comparative information to educate customers about the
superiority of Whole Foods Products.
PUBLIC RELATIONS
Partner with Health Organizations:
Whole Foods has the opportunity to partner with local health organizations
and medical offices to provide free or low cost health solutions. For instance,
preventative health screenings which test for diabetes, blood pressure issues,
cholesterol, etc. could bring potential customers into Whole Foods locations
and would give current customers another reason to shop or come into stores.
Participating in beneficial health programs also sends a message to the community
that Whole Foods is serious about their health. Undeniably, this will increase the
likelihood that customers will shop there and that current customers will remain
loyal to Whole Foods. They already have an excellent relationship with national health
organizations and the next step should be to partner with local ones in their community.
OPPOSING VIEWS
On their website, Whole Foods states, “It is very rare for Whole Foods Market to do
national advertising.” While the company’s success is difficult to deny, one might also
ask why more money is not spent on advertising to attract more customers. In our
State of Texas, you will often see commercials for the San Antonio based H.E.B grocery
store chain and yet, you will not be inundated with commercials for the Austin, Texas
based Whole Foods. Perhaps Whole Foods is content with their growth and does not
see the need for television advertisements. After all, if Whole Foods has grown this much
thus far, they must be doing something right. This “less is more” mentality seems
adequate enough. Whole Foods Co-Chief Executive Officer, Walter Robb supports this
method stating that, “the company has no debt and is generating good cash flow.” (Austin
American Statesman staff, 2011)
References
Anderson, Rob (2011, Feb 14). Resolved: Whole Foods isn't as expensive as people think
it
is. Boston Globe Online. Retrieved from
http://www.boston.com/bostonglobe/editorial_opinion/blogs/the_angle/2011/02/w
hole_foods.html
American-Statesman Staff (2011, June 21) Whole Foods thinking big on growth. Austin
Statesman. Retrieved from
http://www.statesman.com/blogs/content/shared-gen/blogs/austin/theticker/entries
/2011/06/21/whole_foods_thinking_big_on_gr.html
Bokaie, J. (2008, Jul 02). Whole foods eyes the everyday. Marketing, 16-16. Retrieved
from http://search.proquest.com/docview/214964012?accountid=7137
Friesner. (2010, May) T. SWOT Analysis Whole Foods. Retrieved from
http://www.marketingteacher.com/swot/whole-foods-swot.html
Gordhamer, S. (Aug 26, 2009) 5 Social Media Lessons Learned From Whole Foods.
Retrieved from
http://www.tasteandshare.com/profiles/blogs/5-social-media-lessons-learned-1
Shields, R. (2010). Tesco plans social media campaigns to engage shoppers. New Media
Age, 3-3. Retrieved from
http://search.proquest.com/docview/806230799?accountid=7137