Whole Foods Case Study

Whole Foods Market was founded in 1980 and in turn evolved from a local supermarket for natural and health foods in Austin, Texas to the world's largest supermarket retailer of natural and organic foods. Whole Foods Market had a sales revenue in 2009 totaling $8.0 billion and in early 2010 had 289 stores within the United States, Canada, and Great Britain. The company's CEO believed Whole Foods rapid growth and success had much to do with its having "remained a uniquely mission-driven company-highly selective about what we sell, dedicated to our core values and stringent quality standards, and committed to sustainable agriculture.

Whole Foods was seeking to offer the least processed, most flavorful and naturally preserved foods available and it was able to market them in store environments that made shopping both interesting and enjoyable. Mackey's vision was for Whole Foods to become an international brand carrying highest quality natural and organic foods available. He was wanting Whole Foods Market to set the standard for excellence in food retailing.

Mackey's growth objectives for Whole Foods had been to have 400 stores and sales of $12 billion by the end of the fiscal year 2010, however, the economic downturn in the United States in 2008 hit Whole Foods hard and forced a number of strategy changes between 2008 and 2009.

One focus of this case is on the Whole Foods' strategy and operations in a $30 billion natural and organic food retailing industry within the United States. Whole Foods is making a name for itself in the grocery industry and is on the verge of becoming one of the top 20 leading supermarket chains in North America. Both its strategy and its operating practices are worthy of careful study as examples of how to run a good company.

The market for organic products in this country is steadily growing. Despite the fierce competition the price of organic products has remained high due to rising consumer demand. Once a niche market, several factors in the market have forced Organic products to become one of the fastest growing segments of the U.S. Foods sales. The factors that drive this increase in demand for organic products include people eating more healthy, wellness and health consciousness, and consumer concerns of having pesticides in their foods.

A competitive strategy will give Whole Foods an edge over the competitive market. Whole Foods was once ranked leader in the market of natural and organic foods, they offered the largest selection of products in this category. Strong relationships and bargaining power will be needed to compete with competitors. Suppliers understand if the demand is higher than consumers are willing to pay more to get the supplies to their stores. Whole Foods is aware that if they switched suppliers the potential for higher costs could develop.

Whole Foods will need to use its strengths and opportunities to achieve a competitive