Whole Foods Market Case Questions

1. What are the chief elements of the strategy that Whole Foods Market is pursuing? Is Whole Foods’ strategy well matched to market conditions in the food retailing industry?
The chief element of the strategy that whole food is pursuing is providing the finest quality of products in the market that is free from preservative and other genetically engineered products that reduce the quality of being organic. They promote the vision of the whole food, whole people, and the whole planet.
Whole food market is focus to extend their market to get dominant position in both the local and the international market through increase the amount of stores itself and acquisition.

For high demand from customer and higher profit margin than normal food, Whole food’s expansion and quality control market strategy was well matched to recent developments and conditions in natural and organic goods segment of food retailing industry.
2. Do Whole Foods Market’s core values as presented in case Exhibit 3 really matter? Are they “real ” or just cosmetic window dressing? Have Whole Foods’ core values contributed to the company’s success? Explain/support.
The 7 core values are very important. It guides the company on how to achieve the company mission “bringing the highest quality products to satisfy the consumer”.
The core values are also real. Through these 7 core values, the company link their own profit and growth to customer benefit, bind their suppliers with win-win partnerships and try to create an interests community involving all their stakeholders.
For example, to implement the first core value “selling the highest quality natural and organic products available”, the company set “nutrition, freshness, appearance, and taste ” quality standard and abundant principal categories to supply thousands of organic food and gourmet products in their store. All these value can directly deliver to customer, better satisfy their needs and lead to success in product quality and variety.
3. Based on the financial statement data in case Exhibits 9, 10, and 11, how well is Whole Foods Market performing?
From E9 statement of operations, sales eventually increased 1 billion every year from 4.7 billion 2005 to 8.03 billion 2009. However, the net incomes were kept in the scale between 114 million to 203 million these years due to the increasing input of store contribution. This situation matches the expansion activities of their business operations.
Then, combine with the data from E10
Return on stockholders’ equity 9.02% 7.60%
Working capital(in thousand) 371356 -43571
Long term debt-to-equity ratio 0.65 0.80
Long term debt-to-capital ratio 0.28 0.36
The long-term debt largely decreased from 08 to 09 which is the main difference between the 2 years.
In E11, the cash provided by operation activities in 09 is more than 08 and 07. And outside the business Whole Food also have investment activities. The company was trying to earn extra profits from exchanging securities. In 07, it earned 198343 thousands; in 08 it didn’t earn anything, then in 09 the company didn’t have any investment activities on exchange securities.
4. How well is Whole Foods Market performing from a strategic perspective? Does Whole Foods enjoy a competitive advantage over its 3 chief rivals “Wild Oats, Fresh Market and Trader Joe’s?
Whole Foods Market is performing exceptionally well from strategic perspective. Whole Foods Market is performing well by increasing their locations and markets. The company has made strategies for its stores, their location, and Whole Food’s product line, the design of the stores, the product quality, and marketing and for providing their customer most satisfactory service. It follows the strategy of team based management for store operations. It also offers compensation and rewards to its employees.
It has also made strategies that are feasible for the purchasing and distribution of items. All these strategies are in accordance with the company’s requirement and thus the company maintains a competitive advantage over its rivals due to its sustainable implementation of strategies for achieving its goals and managing the company. It acquired one of its biggest rivals Wild Oats in 2007. The company’s strategy has helped it in gaining the d position in the market.
5. What recommendations would you make to John Mackey regarding the actions that Whole Foods’ management needs to take to sustain the company’s growth and financial performance?
Whole Food was very successes on decreasing their long-term debt level while keeping their profitability and increasing sales. However, through it kept expansion through opening new stores and acquisition, the net income is not enough for big change like enter into a new area.
So, I suggest Whole Food may extend their service, such as adding a fast food to go window or even a dining area in their store to better utilize their urban metropolitan store location and cooking ability. The costs of food service just need to develop the new recipe and change the store wouldn’t too much but can attractive more customers.