Whole Foods Market: Healthy and Natural Food

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Table of Contents

Introduction and Point of View
Identification of Issues
Analysis of Key Issues
Summary, Conclusions and Recommendations
Works Cited

Introduction and Point of View

Food industry is considered to be one of the fastest developing in the modern world. More and more people prefer eat healthy and natural food. The development of the innovative technologies and their implementation in the food industry made it possible create synthetic food.

Still, people understand that there is nothing more useful than natural and organic food. Each company tries to be oriented on its clients as they are the main identifiers of a company’s success. Understanding human desires, Whole Foods Market tries to meet their requirements by means of selling natural and organic food.

The main purpose of this paper is to consider Whole Foods Market and its issues. The issues under discussion are as follows, procurement, distribution, merchandising, food quality, marketing, business planning, competition, security, and financial analysis of the Whole Foods Market functioning. After a thorough research it was concluded that the key issues of the Whole Foods Market are the financial analysis, procurement and business planning.

Identification of Issues

Dwelling upon the issues, it should be mentioned that only the complex functioning of those allows the company remain so successful and financially profitable. Distribution of the products in the Whole Foods Market chain is not centralized. The chain is directed at local vendors, so each store is provided with the products from the region it is located in. There are 9 main distributional centers which try to organize and control the work in the sphere.

Merchandising is really important for the company. Being an organization which offers its customers only natural and organic food, the company tries to place the products in such a way that people could choose what they want. Customers are given an opportunity to come closer to the shopboards and choose the items they want. The main principle of merchandising in the Whole Foods Market is to offer the customers only fresh and quality products they may be satisfied with.

Turning to the problem of food quality, it should be mentioned that one of the main purposes the organization is “helping support the health, well-being, and healing of both people – customers, team members, and business organizations in general and the planet” (Thompson C-2).

Whole Foods Market provides people with natural and organic foods. Buying products in the Whole Foods Markets, people pay much attention to the use-by date information. The managers of the stores care greatly of the quality of the products as natural food exceeds the time limits of warehousing faster.

Quality is a core issue for the Whole Foods Markets as people search only for fresh and tasty products. The Whole Foods Market directs its marketing strategies at those customers who care of their health. As it was mentioned above, natural and organic food is a core issue for the Whole Foods Market.

Using different marketing strategies, the company identified it and now it is working in this direction. Furthermore, the stores of the chain have the specials which vary from week to week and from store to store. The company also tries to attract customers by means of new products which appear on the shelves of the Whole Foods Market’s stores every month.

Competition is an important issue in the Whole Foods Markets functioning. Serving customers with natural and organic food, the chain makes its competitors who sell traditional foods leg behind. Furthermore, Whole Foods Market chain is rather big that allows it to function better than other small companies and stores.

The main competitors of the company are the supermarkets on different levels (local, regional, national and international), the stores which sell natural foods, warehouse membership clubs, different farmers’ markets, etc. The main factors which remain competing for the Whole Foods Markets and other organizations are price, products’ quality, customers’ service, and the selection of the products.

The security is really important in the stores of the Whole Foods Market. The special merchandising techniques allow people act unfair. To avoid shoplifting, Whole Foods Market managers hire only qualified armed security which is responsible for the peace and order in the stores of the chain. To consider the key issues of the Whole Foods Market, it is necessary to check the next section of this paper.

Analysis of Key Issues

Procurement in the Whole Foods Market is organized in a number of ways. One of the main methods of procurement is buying products from the local farms.

This is important as, on the one hand, the Whole Foods Market chain should not pay too much for logistics and transportation, and on the other hand, in case if the product appears to be in high demand unexpectedly, a necessary amount of it may be delivered faster. Moreover, people may be aware of the fact that the products they buy are cultivated in the region they live in as there is a tendency for consuming local foods. This global movement acquired a name slow food.

Business planning is another key issue for the Whole Foods Market. There is a tendency in the organization that regional stores are given freedom in the business-impacting decisions. Each store is free to choose the Sure Deals and weekly products.

Furthermore, the regional stores can decide on the marketing and merchandising techniques which may be more preferable for their customers. Still, this technique fails to be realized at whole extend as there are cases of exceed money which should be used for such procedures. To consider the problem closer, the financial analysis of the organization should be provided and discussed in detail.

Financial Analysis

Considering 2009, Whole Foods Market operated 284 stores in the United States of America, Canada and Great Britain. The company cash and cash equivalents on September 27, 2009 were $430.1 million.

The cash flows from the operating activities of the company were about $587.7 million in fiscal 2009. Net cash which the company used in the investing activities was $386.3 million. Capital expenditures of the company in 2009 were $314.6 million. Considering the information about the fifty-two week which ended September 28, 2008, it may be concluded that sales of the company were $7,953,912.

The share amount of gross profit for the same period was 2,706,705 with the direct store expenses 2,107,940. The total assets in the company in 2008 were $3,380,736. Taking into account the financial information and having considered the Whole Foods Market functioning, it may be said that according to American Fortune magazine, Whole Foods Market was ranked as one of the “100 Best Companies to Work For” (McCann 6).

It should be stated the activities of the company in the relation to profit increased greatly if to compare and contrast with the 2007. At the same time the expenses reduced greatly. This allowed the company open new and new stores and enlarge its business. One of the greatest disasters which affected the functioning of the Whole Foods Market was the crisis which impacted the organization in 2008. The reduction of the sales was obvious and influenced the whole structure.

Furthermore, the treaty with Wild Oats affected the company functioning greatly and it is impossible to say that this effect was positive. The announcement about the merger of Whole Foods Market and Wild Oats was considered as a good acquisition, but in fact that procedure resulted in a number of complications caused for the company. Still, considering the latest information on the company’s functioning it may be concluded 5that it managed to cope with the crisis and the problems and continue its effective functioning.

Summary, Conclusions and Recommendations

In conclusion, Whole Foods Market is the organization which cares of its customers, providing them with quality natural and organic products. Having considered the company issues like procurement, distribution, merchandising, food quality, marketing, business planning, competition, security, and financial analysis of the Whole Foods Market functioning it was decided that procurement, business planning and financial analysis are the key issues.

The thorough analysis of all those issues made it possible to understand why the Whole Foods Market is a flourishing and profitable company. Still, some mistakes in the managing an organization were noticed. Thus, the business-impacting decisions should be centralized. This may allow the company to reduce some expenses. In addition, using the products from the local distributors and vendors, the Whole Foods Market may use the slow food (or local food) strategy as the central for its advertizing campaign in the next period.

Works Cited

McCann, Cindy. “Whole Foods Market Reports Fourth Quarter 2008 Results; Company Announces $425 Million Equity Investment; Updates Fiscal Year 2009 Outlook.” Whole Foods Market. 2009. Web.

Thompson, Arthur A. “Whole Foods Market in 2008: Vision, Core Values, and Strategy.” Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. Eds. Arthur A. Thompson, Jr., A. J. Strickland, John E. Gamble. New York: McGraw-Hill/Irwin, 2009. C2-C23. Print.

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