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Summary
Executive
Summary
Recommended Strategy
Establish Partnerships With Traditional
Supermarkets
Achieve National Brand Equity
Overview
Market
Definition
Market History
Natural And Organic
Food Industry Began
About 30 Years Ago
Whole Foods Market Is
A Founding Firm
USDA Established The
Organic Rule In 2002
Market
Definition
Internal
Rivalry
Threat To Profits: High
Sources Of Internal
Rivalry:
Many Sellers In The
Market
Differing Cost Structures
Strong Exit Barriers
Internal
Rivalry
Differing Cost Structures
Consider A Wal-Mart Supercenter:
> 100,000 Square Feet
Average Supermarket Only 35,000 Square Feet
Significant Economies Of Scale Difference And Wal-Mart
Continually Drives Down Prices
Entry
Threat to Profits: Medium
Originally, Health Food
Stores Were Small,
Expensive,
And Unpredictable.
Segment
Entry Types
Re-branded Supermarkets
H.E.B. (Texas) Created Central Market
Wegmans (New York) Upgraded Locations
Entrant
Comparison
Barrier
New Entrant
Re-Branded
Strong
Moderate
N/A
N/A
Moderate
Moderate
Strong
Weak
Experience Curve
Strong
Weak
Network Externalities
Strong
Moderate
Competition Expectations
Strong
Moderate
Economies of Sales
Government Protection
Brand Loyalty
Overall Threat:
Low
High
Most Likely
Segment Entrants
Whos Next?
Substitutes
And Complements
Substitutes
Threat To Profits:
Medium
Health Food Stores
Traditional
Supermarkets
Supercenters
Complements
Health Industry
Health Insurance
Companies
Health Care Specialists
Fitness Centers
Wellness Programs
Supplier Power
Buyer Power
Price
Convenience
Varying Levels Of Health Sensitivity
Mixed Consumer Messages
Porters Five
Forces Summary
Entry
Medium
Substitutes/Complements
Medium
Supplier Power
Buyer Power
High
Medium to High
Strengths
Whole Foods, Whole People, Whole Planet
Corporate Culture
Customer Experience
Perishables
Hip Image
Double Digit Growth
Largest Selection
Strengths
Whole Foods:
Foods
Reputation:
Healthy, Local Food
Whole People:
People
Whole Planet:
Planet
Environmentalist Reputation
Encourages Brand Loyalty, Holds
Off Commoditization
Strengths
Whole Financing!
Strong Cash Flow And Stock Position Provide Capital
For Growth In The Most Highly Desired Locations
t
Weaknesses
Whole Paycheck
Whole Planet? Weak International Operations
Low Employee Efficiency
Revenue per Employee = $138K versus Industry
Average of $309K
Opportunities
Opportunities
Threats
Increased Competition
Re-branding Existing Supermarkets
Wal-Mart
Corporate
Strategy
Medium Term
Strategy
Long Term
Strategy
Questions &
Discussion