Identifying and Evaluating a Company's Strategy

Whole Foods Market - Identifying and Evaluating a Company's Strategy

1. Using the Strategy Diamond framework, identify the elements of Whole Foods Market's strategy. Please use an outline / bullet point structure for the assignment. Full sentences are not necessary.

Arenas:

- Natural and organic foods/products

- United States, Canada, Great Britain

Vehicles:

- Opening new stores

- Acquisition of other food/product chains

Staging:

- Analyze potential markets

- Comprehensive case study and profit projections at potential locations

- Entering into a lease if the location is profitable

Differentiators:

- High quality and least processed products

- Most flavorful naturally preserved and fresh products

- Wider product selection

- Appealing store environments makes shopping interesting and enjoyable

- Provide the most informed customer service

Economic Logic:

- Customers are willing to pay premium to healthy food and to shopping experience they have in Whole Foods stores

2. Evaluate this strategy using the Three Tests of a Winning Strategy (see Chapter 1). Be specific and provide supporting evidence for your evaluation. Use data as needed.

The fit test:

As it is stated in the earlier pages of the case study, demand for organic products is following an increasing trend. Being one of the pioneers in this market segment provided leading advantage to Whole Foods (WF). While there was not any credible scientific evidence that shows organic products were superior (more nutritious, provide health benefits etc.) to conventional products according to USDA, WF played a good role in the expansion of the organic product market by their strategy which implies the relation between organic products and well-being. In other words, their strategy not only exhibited good external fit with the rising organic food trend in the market, but also contributed to growth of the trend’s itself, besides WF’s own market share. While this strategy generated a higher demand for the natural and organic products, it also increased the competition in this market segment and reduced the profitability due to increased cost-limited supply. Despite the intense competition, WF’s strategy that targets to provide the best quality natural-organic