Analysis of Whole Foods Company - Coursework Example

MODULE CASE ASSIGNMENT WHOLE FOODS COMPANY Background Information Whole Foods Company is a nutritious supermarket in America dealing with carbon-containing food. It began in 1980s with branches in Canada, United States and UK. The company’s headquarters is in Austin, Texas with John Mackey as the Chief executive officer. The company has 310 stores and employs around 62,000 staff. Current value stands at US$ 9.006B and NASDAQ 100 traded. It entered UK MARKETING 2004 by buying seven fresh and wild stories. The first European outlet opened in Kensington in 2007, and the primary emphasis is quality and perishable products (Fishman, 1996). It has a high market vision of a sustainable future implying that the coming generation will be in a world regarding creativity, variety and choice at heart. Businesses will enhance human and biological community’s integrity. Various institutions will be held accountable for their operations. In addition, it will be a world that honors education with the freedom to exchange ideas. Whole food faces strategic issues in both economy and competition. From the initial stages of being a one-store, it has grown to $8 billion a year corporation. Statistics indicates that as of 2008 (Quinn, 2012). Experiencing Whole Foods Market The company is reputable in high-quality standard foods, Ethical relations like fair trading activities, choice of the product, premium services like cooking lessons and other related information like the use of labels and recipes. In addition, the customer services are duly executed where trust and confidence inbuilt; lastly the external information like information about the products is up to date (Pfeffer & Veiga, 1999). In several instances, the consumers have felt that the company is honest, approachable, and transparent in its operations. The retail environment is trustworthy and feels that it’s the only supermarket to shop in. The final result has been strong loyalty between clients and the brand (Veiga, 1999). Brand Proposition It usually begins with whole foods, a whole people, and the whole planet. However, the holistic approach and declaration of independence becomes the top, followed by environment and sustainability, Health and Nutrition, Ethical development of the business and finally development in social aspect (Quinn, 2012). Brand Audience Persons from diverse social aspect form part of the audience to the supermarket. There is a range of customers, but the key ones are working parents between the age 30 and 50 preferably women, Professionals are not left behind and lastly the city dwellers. It is, however, important to note that it is not easy to become green. As the market develops, it becomes difficult to secure customers (Quinn, 2012). Market Analysis The latest report indicates that the consumer trends of health and well being is on the rise. There is 10% sales growth of premium food products per annum, 50% increase in the organic market and 100% increase in fair trade market both between 2007 to 2011(Quinn, 2012). Source: Whole Foods Market: 2011 The latest report indicates that the consumer trends of health and well being is on the rise. There is 10% sales growth of premium food products per annum, 50% increase in the organic market and 100% increase in fair trade market both between 2007 to 2011. The recession, however, has made many consumers to embark on modern foodstuff by cooking ahead of time (Fishman, 1996). Competitor Analysis There are over 100,000 grocery stores in United States ranging from small to huge operations. The products and customers mix are the greatest targets. In the past, Wild Oats was the most significant competitor with several stores around the world. At the moment Trader, Joe’s stands a chance of being the biggest competitor to whole foods. Seven years ago they had 300 stores in almost 25 regions and were on the growth. Other competitors both huge and small include the Fresh market chain of 18 stores and serves17 states and the Central Markets which serves Texas and has eight stores. Others individual stores include Stu Leonard’s and Jungle Jim’s six acres of food in Fairfield (Fishman, 1996). Source: Whole Foods Market, 2011 Source: Whole Foods Market, 2011 Whole Foods Strategy The world’s leading organic foods supermarket has a mission to promote the strength of individuals by delivering quality products. The aspiration is to expand to be the best food retailer in the community at large. In the fiscal year, 2008 Perishable products accounted for almost 67% of their total retail sales. According to the ranking of Worlds ranking of the most reputable companies by Harris interactive journal. Whole food is placed 12th overall for its social responsibility (Quinn, 2012). Customers come from far to do the shopping yet only 25% of them provide 75% of the total sales. Managers are allowed to come up with prices on competitive. The company knows how to scheme the market with their few stores in each area; they know how to realize higher profits products (Lubove, 2012) Industry Trends Grocery stores are the leading industry with almost 100,000 stores in the early 2000’s. It offers job opportunities for about 3.4 million people. Eleven years ago, nearly 35,000 stores registered annual sales of $2 million and more. At some point the sector of retail was the highest paid industry however with time it became a small wage full of part-time employees (Fishman, 1996). Summary of Financial Information EXHIBIT 1 Whole Foods Market, Inc. Summary Financial Information In thousands 2008 2007 2006 Consolidated Statements of Operations Data Sales $7,953,912 $6,591,773 $5,607,376 Cost of goods sold and occupancy costs________ 5,247,207_______ 4,295,170____3,547,734__ Gross profit 2,706,705 2,296,642 1,959,642 Direct store expenses 2,107,940 1,711,229 1,421,968 General and administrative expenses 270,428 217,743 181,244 Pre-opening expenses 55,554 59,319 32,058 Relocation, store closure and lease termination costs 36,545 10,861 5,363__ Operating income 236,238 297,451 319,009 Interest expense (36,416) (4,208) (32) Investment and other income 6,697 11,324 20,736__ Income before income taxes 206,519 304,567 339,713 Provision for income taxes 91,995 121,827 135,885__ Net income $ 114,524 $ 182, 7 $203,828__ Basic earnings per share $ 0.82 $ 1.30 $1.46__ Weighted average shares outstanding 140,011 141,836 145,082__ Diluted earnings per share $ 0.82 $ 1.29 $ 1.41_ Weighted average shares outstanding, diluted basis 140,011 141,836 145,082__ Dividends declared per share $ 0.60 $ 0.87 2.45__ Consolidated Balance Sheets Data Net working capital $ (43,571) $ (104, 36$114,211 Total assets 3,380,736 3,213,128 2,042,996 Long-term debt (including current maturities) 929,170 760,868 8,655 Shareholders’ equity 1,506,024 1, 458, 80 1,404,143 Operating Data Number of stores at end of fiscal year 275 276 186 Average store size (gross square footage) 36,000 34,000 Source: WFMI Annual Report, 2008 The Future of Whole Foods The current CEO is thinking of setting up 500 stores in the future. His immediate goal is to ensure product promotion. The team has come up with some strategies for suspending their cash dividend that include: Increasing the range of lower priced items; promoting value image; reducing the spending by fifty percent and finally launching the product line of trade (Fishman, 1996). The company meets several strategic issues towards its development. These include the distribution outlet that is not quite adequate and equal to national competitors. Another challenge is how to maintain the competitive advantage that is a threat to the economy ( Pfeiffer & Veiga, 1999). I would therefore conclude by giving out the following recommendations regarding the performance of the company as follows: Adopting seasonal sales and schemes of rewarding customers; developing linkages in different regions; carrying out events and trade shows; Enhance the brand image of the product to make it more appealing; consider partnership with other stakeholders to increase product visibility; adopt campaign of the celebrity that blends education with other social life and lastly to consider special events like ladies night (Fishman, 1996). References Fishman, C. (1996). Whole Foods is all teams. Fast Company, 2, 103. Harbin,J.&Humphrey,P.(2008).Whole Foods Market, Inc, Journal of Case Research in Business and Economics. May,S.(2011).Whole Foods Market: A Brand Analysis.[11.4.2015]. . Pfeffer, J., & Veiga, J. F. (1999). Putting people first for organizational success. The Academy of Management Executive, 13(2), 37-48. Quinn, K. G& Lubove (2012). Introduction. 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