Whole Foods Market Strategy

Current Strategy:

At the business level, Whole Foods Market uses a focused differentiation strategy. The company had started as a differentiated grocer, but had to narrow its scope to better compete with grocers that have started offering organic products in their stores. Whole Foods Market's focused differentiation strategy is implemented through the unique services, products, and experience that you get when you shop at one of their stores. The company has strategically positioned itself as an upscale grocer that offers natural, organic, and luxury food items. The goal of WFM is to be the champion of healthy living by educating customers through their Healthy Eating Initiative (BusinessCommunity, 2013). This initiative is an attempt to further focus their scope and offer unique services to customers that are not offered at other grocery stores. The Healthy Eating Initiative includes implementing "Take Action Centers" in every stores. The centers are available to shoppers who want to be educated on food-related topics such as pesticides, organic foods, sustainable shopping and agriculture, genetically engineered food, among other important topics. Wellness Clubs have also been implemented as part of the Healthy Eating Initiative. These clubs teach shoppers about healthy eating and cooking, using ingredients found in the store (BusinessCommunity, 2013). These services are important value drivers for Whole Foods Market in their attempt to be a focused differentiated grocer. Customer service is enhanced through these strategies because knowledgeable staff must be hired to educate shoppers. Quality staff ensures customer service is of the highest quality.

Another way Whole Foods Market has used a focused differentiation strategy is through the WFM website. This website acts as complement to the products offered in the stores and a great tool for marketing research. The customer service offered through the website also helps to reach customers and listen to their concerns and opinions. This is a big value driver for Whole Foods Market. Whole Foods Market is attempting increase the value driver of product features by expanding their private label product line, Whole Trade, in order to offer organic and natural foods at a lower price (Business Analysis, 2013). Whole Foods Markets has been able to expand the range of lower-priced items to better reach customers after the economic downturn of 2008-2009. This will allow them to offer discounts for families in order to compete with bulk grocers such as Costco and Sam's Club. Whole Foods Market also offers a very unique shopping experience to customers. Shoppers have the choice to dine-in or take-out meals that have been prepared on-site by WFM chefs (Business Analysis, 2013). This is a value driver for WFM because the meals can be customized for people with certain allergies or food intolerances, and all meals are prepared with the highest quality natural and organic ingredients. This type of customization, customer service, and complements are major value drivers for WFM that help focus their scope and capture a niche market.

At the corporate level, Whole Foods Market uses strategies such as mergers and acquisitions. Whole Foods Market has acquired/merged with the following companies: WellSpring Grocery, Fresh Fields, Breads & Circus, Bread of Life, Mrs. Goochs, Harry's Farmers Market, Natures Heartland, Food For Thought, Fresh & Wild, Select Fish, Wholepeople.com (e-commerce subsidiary), Merchant of Vino, Arion, and Allegro Coffee (Yong, 2012). The Wild Oats merger is probably the most notable acquisition. The acquisition allowed WFM to enter into 15 new markets and 5 new states. However, the FTC had filed an antitrust suit against WFM. The settlement between the FTC and WFM was a costly one for WFM, which had to divest many stores. WFM is planning to expand internationally by slowly opening locations in Canada (Yong, 2012). WFM has strategically positioned itself as the organic and natural foods industry standard.

Opportunities

Expanding into New Markets

Expanding into new markets that Whole Foods Market is not currently present in is an opportunity that they cannot miss. They are currently operating 367 stores in the United States, Canada and the United Kingdom. The opportunities are endless for Whole Foods if they were to expand into foreign markets. The world is becoming increasingly more aware of how important it is to eat healthy, and the first step in doing so is purchasing the right foods. Whole Foods has the opportunity to pull in new customers by opening stores in new markets. By doing so, the company will also be able to increase their brand awareness which in turn will attract more customers. One way of emerging into new markets would be to partake in an acquisition of an organic food market in Europe. This will allow the company to establish a footing in the country by lowering the entry barriers and threat of competitors. It will be very beneficial for Whole Foods Market to expand their markets because it will also expand their customer base.

House Label Brand Expansion

Whole Foods currently has a line of house label products called "Hello 365" in which the provides a generic brand to many different products. All 365 products are certified organic, or enrolled in the Non-GMO Project which verifies that genetically modified organisms are not present in the products. Many consumers are wary about shopping at Whole Foods Markets on account of their prices. In order to change the stigma that Whole Foods Market holds, it would be beneficial if they expanded their private label brand. In doing so, they will be able to offer many products at a lower price thus capturing a broader target market and gaining customers. The opportunity to expand Whole Foods Market's current private label brand will be beneficial to the company because it will draw in new customers, which in turn will increase their market share.

Threats

Loss of Business to Other Grocers Increasing their Organic Food Options

With competition and rivalry being high, it is getting hard for Whole Foods to compete