whole foods market case analysis
Post on 22-Dec-2015
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Presenting
Whole Foods MarketGROUP 1
Name ID
Mazed Hossain Mahin 13164080
Md. Yasir Arafat 12264057
Sadman Shariar Biswas 12264004
Shamima Nasrin 13164074
Nipupurni Biswas 12364006
Hasan Asif 12264069
WFM At a Glance Founded in 1980 in Austin, Texas John Mackey, the cofounder and CEO $ 6.6. billion sales in 2007 276 stores in USA, Canada and GB Revenue growth 30% in 1991, 20% since
2000 Growth Objective: by 2010
400 stores $12 billion sales
Marketing Philosophy Marketing high quality natural and
organic foods to more and more consumers
“Whole Foods, Whole People, Whole Planet”
Help the customers to live longer, healthier, more pleasurable lives.
Natural & Organic Food- What is it?
Product containing no artificial ingredient No added color Minimally processed Fresh fruits, vegetables, meats and
processed foods
Why natural? Environment friendly agricultural practices
Industry Analysis
Natural and Organic Foods Industry Represent 3% of the total US retails sales of
food & beverages $17 billion sales in 2006 alone in United States Sales growth is 7-9% since 2000 Projected sales is $33 billion in 2008 Farm production is 4.1 million acres in 2005,
increased by 2 million acres farm land since 2001
8,400 certified organic farmers, other 9,000
Sales Channel
40%
31%
29%
Sales of organic foods
Supermarkets
Leading natural foods supermarket chains
Independent grocery retail chains
Leading Organic Firms Kraft, General Mills, Groupe Danone, Deans
Food, Kellog Heinz- organic ketchup Campbell Soup- organic tomato juice Starbucks- organic coffee Coca-Cola- Odwalla juices Tyson Foods- organic chicken
Coming back to WFM’s Values
WFM’s Core Values“Whole Foods, Whole People, Whole Planet”
Selling the highest quality natural and organic products available
Satisfying and delighting our customers Team member happiness and excellence Creating wealth, through profits & growth Caring about our communities and our
environment
Introducing the Growth Strategy
Growth Strategy Combination of New Venture & Acquisition Opening 10-15 times bigger stores in
metropolitan areas
Why Acquisitions? Additional bargaining power with suppliers Full utilization of company’s facilities Reduce general and administrative expenses Renovating and rebranding
Environmental Forces 14,500 superstores moving towards natural
and organic products marketing Healthy eating concept- leading superstores
have special “organic & health food” sections Consumer demand is growing 20% annually Intense price competition from the rivals Customers prefer avoidance of pesticides
(70.3%), freshness (68.3%), and health & nutrition (67.1%)
Product, Pricing & Marketing
Product Line Strategy Fresh Produce Meat and Poultry Fresh Seafood Daily Baked Goods Prepared Foods Coffees and Teas Body Care and Nutrition Grocery and Household Floral Department Educational Products
Pricing Strategy Advantages: Offer Premium Customers Premium Products Niche Products
Disadvantages: Price Level High Price Sensitive Consumers
Marketing and Customer Service Advertising Word of Mouth Recommendation Store Signage Store Events Community Outreach Programs
Store Size & Location
Open Format Sweet Spot Footprint 45000 SFT-60000
SFT Located In Upscale urban metropolitan
centers Avg. capital cost for new store $15.1
million in 2007 Total 276 stores in 36 states
Store description and Merchandising
No standard store design Management want to give a view to
customer store as “Third Place” Variety of category (Seafood ,Juice Bar etc.) Experimenting in Merchandising like to take
best ideas and incorporate it to other stores. Introduced brochure signage to informing
shopper about Five step Animal rating program
Store Operations Decentralized Team and Management process Highly dependent on team members & associates
Empowering team members
Different team members for different category Team Leader screen candidates for job openings if
2/3 of team members had to agreed. Team Leaders report to regional presidents 3rd Party administered Team leader survey Customize product display & product mix
considering TG . In 2008 employed 54000 employees 85 % full time . Benefit plan ,Health Insurance plan
Compensation & incentive
Gain Sharing Program Encouraged stock Ownership Surprise inspection & reward Salary Cap (wages plus profit incentives bonuses) The Use of Economic Value added measure
Performance Promoting Employee within as much as possible
Purchases and Distribution
Whole foods used regional and national suppliers.
Some perishable products, from some distant supply sources.
The company operated nine regional distribution centers to supply its store.
Community Citizenship & Social Activism
The Animal Compassion Foundation in January 2005
Eliminating disposable plastic grocery bags
In 2005, the company created two foundations designed to
effect solutions to global problems
Donating at least five percent of its annual net profits to
charitable causes.
Financial Performance
Year Store Difference Sales Growth
2004 163 - 14.9%
2005 175 12 12.8%
2006 186 11 11.0%
2007 276 90 7.1%
2004 2005 2006 20070.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
Column2
Balance sheet Ratio 2004 2005 2006 2007
Current Ratio 1.45 1.61 1.22 0.86
Debt to equity 0.6 0.4 0.5 1.2
Total asset turnover 3.10 2.95 2.70 2.25
2004 2005 2006 20070
1
2
3
4
5
6
Total asset turnover
Debt to equity
Current Ratio
Income statement ratio
2004 2005 2006 2007
Gross Profit 34.7% 35.1% 34.9%
34.8%
Net Profit Margin 5.6% 4.9% 5.7% 4.5%
2004 2005 2006 20070
5
10
15
20
25
30
35
40
Gross ProfitNet Profit Margin
Competitors
Wild Oats Market• Company’s 109 stores in 23 states and
British Columbia, Canada• Combines sales of about $ 1.2 billion• Cofounder of wild oats was Mike
Gilliland• Product line includes- dairy, meat,
seafood and baked goods etc
Fresh market Headquarter in Greensboro, North Carolina Founder of Fresh market was Ray Berry During the 1982-2000 period, sales
revenue grew at a 25.2% compounded rate Product line includes-meats, sea food, 300
fresh produced items, fresh baked goods, prepared foods, 40 varieties of coffees, a section of grocery and dairy items, bulk products, cheeses wine, beer, gift items etc.
Trader Joe’s It was a super market chain more than 315
stores in 22 states It is based on Pasadena, California CEO of Trader Joe’s was Dan Bane Product line includes-backed goods, organic
foods, fresh fruits, vegetables, imported and domestic cheese, gourmet chocolates and candies, coffees, fresh salads, meatless entrees, low fat products, frozen fish, sea food etc
Sunflower Farmers Markets Entered in market in 2003 Establishes four stores- two in Phoenix, one in
Albuquerque and one in Denver Founder and President was Gilliland Annual sales in 2013 was $500 million Product line includes-meats, sea food, cereals,
nutrition bars, health drinks, pastas, frozen meals, trial mixes, coffee, nuts, candy, salads, cheeses, breads, vitamins, supplements, medications, soaps, shampoos, books etc
Fresh & Easy Neighborhood markets It was newly established subsidiary of British
supermarket giant Tesco, The worlds largest retailer and sales $51.86
billion for fiscal year Feb 23,2008 Additional 38 stores in Las Vegas, San Diego
and Los Angeles Product line offering ranged from gourmet
items and included natural and organic foods, fruits, vegetables, meat, fish, poultry etc
Independent natural and health food grocers In 2005, there were approximately
14000 small independent retailers natural and organic foods, vitamins, supplements, beauty and personal care products
Combined sale were $ 18 billion range in 2007
Recommendation Configure the most profitable combination of price. Develop a detailed marketing plan that supports
product strategy success. Can use specialized software for inventory Increase store location in more geographic location
like in Asia or Australia or some others markets. Can go for KPI for employee performance evaluation Can go for solar panel instead of electricity which will
be cost effective and environment friendly. Develop contract farming for organic chicken and beef
productions.
Q???
THANKS!!!
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