1. What are the chief elements of the strategy that Whole Foods Market is pursuing?

Whole foods chief elements of the strategy are to establish the company as a market leader of high quality natural and organic foods to more and more customers and become an international brand in every community. Whole Foods, Whole People, Whole planet. 2. Is the strategy well matched to recent developments and conditions in the natural and organic foods segment of the food retailing industry? With the increase in sales of organic foods in the U.S., more and more people looking to become healthier and eating product with no chemicals so, yes they are matching strategy to conditions in the market. Building new stores in the areas that meet these criteria are also a key element. 3. Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not? What do you like/dislike about the companys motto Whole Foods, Whole People, Whole Planet? Do the motto and the principles underlying it (Exhibit 1) really matter at this company or are they just nice words and cosmetic window dressing? Explain. Yes, John Mackey has a good strategic vision for Whole Foods. His vision was for Whole foods to become an international brand synonymous not just with natural and organic foods but also with being the best food retailer in every community in which Whole Foods stores located. You can see this in the knowledgeable staff, the way the stores are set up, even the smell in store feels clean and healthy. Their motto reflects what they believe, respect the environment, and respect your body with eating the most nutritious food available. 4. Do Whole Foods Markets core values as presented in case Exhibit 3 really matter? Are they real or just cosmetic window dressing? What evidence can you cite to support your answer? Have Whole Foods core values contributed to the companys...

1. What are the chief elements of the strategy that Whole Foods Market is pursuing? Whole Foods has designed their establishment around the marketing strategy of expansion through a variety of means, including but not limited to the creation of new store locations, the acquisition of small owner-managed chain stores, the addition of capable personnel, and attaining such goals by seeking out prime locations in the most desirable of areas. 2. Is the strategy well matched to recent developments and conditions in the natural and organic foods segment of the food retailing industry? Whole Foods has established itself around a concrete business strategy, as can be gleaned from an overview of the generic trend that many other supermarkets have been following as of late. For instance, organic and all-natural food retailers, such as Trader Joes, seem to be blossoming during this period of time. As more and more stories erupt from within the medical community ranging in severity from cancer to swine flu, consumers have begun to adopt the mentality that many of these ailments could possibly be related to the food products that they are introducing into their bodies. After the release of such motion pictures as Super Size Me and Fast Food Nation, much of the American public was forced to take stock of their eating habits, many of whom ditched their

old diet and adopted new, healthier eating habits. The trend has become so prevalent in todays society that even many mainstream grocery stores are incorporating all-natural, or even organic, food into their aisles to compete with retailers, such as Whole Foods and Fresh Market. Whole Foods marketing strategy, purchasing and distribution, product line, and retailing of natural organic food is fully compatible with recent development and conditions of natural and organic foods segment. Natural food represents free of artificial ingredient, color and chemical. However the food needs to be grown and processed without the use of pesticides, antibiotics, hormones, artificial fertilizers or genetic engineering. To keep up with natural and organic food segment, Whole Foods product line included some 30,000 natural, organic, and gourmet food and non food items. The company offers fresh produce, meat and poultry, fresh seafood, selection of daily baked goods, fine quality cheeses, frozen foods, beer & wines, and organic pet foods. However, Whole Foods all the meat and poultry products are natural, raised without the use of artificial growth hormones, antibiotics or animal by-product in their feed. All the sea food is wild caught or sourced from aquaculture farms. Also their sea food is never treated with chlorine or other... 3. Do you think John Mackey has a good strategic vision for Whole Foods? What do you like or dislike about the company's motto "Whole Foods, Whole People, Whole Planet"? Do the motto and the principles really matter at this company or are they just nice words and cosmetic...

1. What are the chief elements of the strategy that Whole Foods Market is pursuing? The chief elements of the strategy that Whole Foods Market is pursuing are providing foods labeled natural and organic. Whole Foods executes that by offers the highest quality, least processed, most flavorful naturally preserved and fresh foods available. 2. Is Whole Foods strategy well matched to market conditions in the food retailing industry (one of the criteria for a winning strategy discussed in Chapter 1)? Yes, Whole Foods strategy is well matched to the market conditions. Their product line strategy is focused on providing natural, organic, and gourmet food and nonfood items to their customers. Whole Foods is recognized by the USDA as being a Certified Organic grocer by Quality Assurance International. This means that all their products are grown organically; the products are grown without the usage of pesticides, fertilizers, bioengineered, growth hormones, or antibiotics. 3. Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not? Yes, I do believe that John Mackey has a good strategic vision. Now that organic food market is a fast growing market segment John Mackey got into the business of turning Farmers Markets is to Supermarkets at the right time. People are becoming more health-conscious than in years before, we as a people are more aware of what we are eating and what is going into our foods. John Mackey was able to create that along with a knowing how to create the perfect type of environment that makes a store more appealing and enjoyable to customers. 4. What do you like/dislike about the companys mission/vision Whole Foods, Whole People, Whole Planet that is set forth in case Exhibit 1? There is nothing that I dislike about the companies mission. The first thing I notice about it is the word Whole in each of the companys missions. They are...

2. Is the strategy well matched to recent developments and conditions in the natural and organic foods segment of the food retailing industry? With the increase in sales of organic foods in the U.S., more and more people looking to become healthier and eating product with no chemicals so, yes they are matching strategy to conditions in the market. Building new stores in the areas that meet these criteria are also a key element. 3. Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not? What do you like/dislike about the companys motto Whole Foods, Whole People, Whole Planet? Do the motto and the principles underlying it (Exhibit 1) really matter at this company or are they just nice words and cosmetic window dressing? Explain. Yes, John Mackey has a good strategic vision for Whole Foods. His vision was for Whole foods to become an international brand synonymous not just with natural and organic foods but also with being the best food retailer in every community in which Whole Foods stores

located. You can see this in the knowledgeable staff, the way the stores are set up, even the smell in store feels clean and healthy. Their motto reflects what they believe, respect the environment, and respect your body with eating the most nutritious food available.

Is the strategy well matched to recent developments and conditions in the natural and organic foods segment of the food retailing industry? Whole Foods sold various natural and organic foods and nonfood product, while competitors were selling organic food only as a portion of their products. Huge amount of perishables differentiated Whole Foods from other supermarkets. Because of this huge amount of perishable inventory, it is important for Whole Foods to figure out the equilibrium point between inventory and liquidity. Also, Whole Foods have to make sure that the products from suppliers are 100% meet the standard of the company and must be in the finest quality in terms of nutrition, freshness, appearance, and taste. Any tiny error may cause the whole corporation fail. Created attractive and interactive store atmosphere to impress every customer favorably, and gave consumers a beautiful and comfortable shopping place and provided all kind of services would have certain effects on how likely a customer would come back to do shopping again. Nice, capable, and knowledgeable services were an essential ingredient of

the stores atmosphere. Whole Foods encouraged its staff to offer their best services to delight every customer. However, it is not necessary to offer valet parking or massage. These services seemed to be offered in hotel not supermarkets. Whole Foods should cut down the expenses of hiring people for these positions and thus lower the price. Whole Foods had the good idea of home delivery, which is a feasible and workable approach to create sales, but it had not been implement widely. Whole Foods only spending a small portion of its revenue on advertising, which was not enough, it missed a certain amount of potential customers that had not enough knowledge of natural and organic foods. Why should people abnegate their regular consumption and go for natural and organic foods with a higher price? How will these natural and organic foods affect their life and even the environment? How are these organic standards process? A lot of these kinds of questions should be answered in order to gain more customers. Therefore, Whole Foods should disseminate as much as knowledge to the public through advertising with a higher budget. Before 2007, the biggest supplier for Whole Foods was United Natural Foods, which meant it would increase the expense of distribution, thus higher price for the items retailed in the companys store. Therefore, buying directly from producers and manufacturers could lower the expense and also might have better control over the quality of the products. On top of this, Whole Foods owned nine distribution centers, nine bake houses, five kitchens, and one more coffee supplied store, which not only enhance the quality of foods, but also cut down some media costs.

Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not? What do you like or dislike about the company's motto "Whole Foods, Whole People, Whole Planet"? Do the motto and the principles underlying it (exhibit 1) really matter at this company or are they just nice words and cosmetic window dressing? Explain. John Mackeys vision for Whole Foods was to become an international brand synonymous not just with natural and organic foods but also with being the best food retailer in every community in which whole food stores were located. He wanted whole foods market to set the standard for excellence in food retailing. His philosophy was that marketing high quality natural and organic foods to more and more customers in more and more communities would overtime gradually transform the diets of individuals in a manner that would help them live longer, healthier, more pleasurable lives. John Mackeys vision charts the companys future strategic course. It explains what the company wants to be, where it wants to go and what are the scopes of the companys future. When we see the popularity of the company in natural and organic food market we

may realize that John Mackeys vision for Whole Foods is not unrealistic or unachievable. He does not want to stop at just natural and organic food but also wants to capture the food retail business itself and at the same time considering the health and happiness of the people. In my opinion if John Mackey follows the strategies made by the company and continue carrying out the wonderful business and pleasing the customers the chances of achieving the vision gets higher with time. The companys motto Whole Foods, Whole People and Whole Planet covers the three most important factors of success of food retail business. It focuses the quality of products being offered, it focuses the employees of the company and it also covers the social responsibility of the company. However the companys main motto does not mention the factor of customer satisfaction. It should mention the importance of customers for the company as customers should be the first priority of any company. The good thing about Whole Foods is that it follows its motto in running the business. These are not just the nice words written by the company to impress people. Whole Foods provide the best quality, least processed natural and organic food to its customers. In its each store they have made teams and its employees are very satisfied with the respectful workplace. It has fulfilled its commitment of team based management to its employees. Each store of Whole Foods has as many as 13 teams each led by a leader. This has given empowerment to employees increasing their satisfaction level. Whole Foods Market is also fulfilling its social responsibility by donating to educational organizations. It has also established a not for profit Whole Planet Foundation. It has stopped using disposable plastic bags and has started converting its distribution fleet vehicles to biodiesel fuel. It is also involved in promoting proper animal farming etc.

Do Whole Foods Market's core values as presented in case exhibit 3 really matter? Are they "real" or just cosmetic window dressing? What evidence can you cite to support your answer? Have Whole Foods' core values contributed to the company's success? Why or why not? They aim for high quality products and supply thousands of organic food and gourmet products. They have a high regard for quality and standards in what is offered to their customers. Whole Foods focus on the quality of their products selling organic, preservative free products, wild or aquaculture fish and products that are environmentally friendly. Using this information the analysis shows they are sincere towards their core values which is why their company has been successful in the market.

How well is Whole Foods Market performing from a financial perspective? Do some number-crunching using the data in case exhibits 9 and 10 to support your answer. Use the financial ratios presented in "A Guide to Case Analysis" and in table 4.1 of the text as a basis for doing your assessment of the company's financial statements and financial condition. Whole Foods business generated cash flows from operations of $452.7 million in 2006 and $398.6 million in 2007. Most of the capital expenditures of the company go into funding the development or acquisition of new stores and acquisition of property and equipment for existing stores. | |2006 |Gross Profit Margin |34.94% | |Return on sales |5.689% | |Return on stockholders equity |0.14516 | |Net return on sales |0.0363 | |Return on total assets |0.0998 | |Earnings per share |$1.46 | |Current ratio |1.224 | |Quick ratio |0.824 | |Working capital |114211 | |Debt-to-asset ratio |0.0042 | |Long term debt-to-equity ratio |0.00612 | |Long term debt-to-capital ratio |0.00609 | |Inventory Turnover |17.90 | |Inventory Turnover per day |26 days | |2007 |34.84% |4.512% |0.1252 |0.0277 |0.0581 |$1.30 |0.8514 |0.4842 |(116530) |0.2290 |0.504 |0.335 |14.907 |20 days |

We can see from the above given comparison that the performance of Whole Foods Market has somewhat declined in 2007. However this decline is not major and threatening to the companys performance. Sales return has decreased by 1% and the current ratio is also less than 2006.The reduction in working capital can be a problem to the company hence it should look into that. The debt-to-equity ratio and the debt-to-capital ratio have increased which is not so beneficial for the company. As the gross profit margin is almost equal in both years the company is visibly performing well from financial perspective. The inventory turnover per day has also decreased in 2007.

How well is Whole Foods Market performing from a strategic perspective? Does Whole Foods enjoy a competitive advantage over its rivals? Does the company have a winning strategy?

Whole Foods Market is performing exceptionally well from strategic perspective. All its work and doings are in accordance with the strategies they have made, their motto and their core values. Whole Foods makes sure that it makes the right strategies and decisions at the right time and also do necessary efforts to implement these strategies. It has made strategies for all major aspects of their business for example it had a growth strategy and when the need came for change they changed their growth strategy in 2002. The company has made strategies for its stores, their location, and Whole Foods product line, the design of the stores, the product quality, and marketing and for providing their customer most satisfactory service. It follows the strategy of team based management for store operations. It also offers compensation and rewards to its employees. It has also made strategies that are feasible for the purchasing and distribution of items. All these strategies are in accordance with the companys requirement and thus the company maintains a competitive advantage over its rivals due to its sustainable implementation of strategies for achieving its goals and managing the company. It acquired one of its biggest rivals Wild Oats in 2007. The companys strategy has helped it in gaining the high position in the market.

Do you approve of the decision to acquire Wild Oats Market? What pros and cons do you see? Whole Foods Market, Inc. and competitor Wild Oats Markets Inc. announced the signing of a merger agreement under which Whole Foods Market, Inc. would acquire Wild Oats Markets Inc.s outstanding common stock in a cash tender offer of $18.50 per share, or

approximately $565 million based on fully diluted shares. Under the agreement, Whole Foods Market, Inc. would also assume Wild Oats Markets Inc.'s existing net debt totaling approximately $106 million and 109 stores in 23 states and British Columbia, Canada. While the FTC challenged the acquisition of Wild Oats Markets, Inc, arguing anticompetitive consequences, it is for the benefit of then struggling Wild Oats Markets to be bought out by Whole Foods Market, Inc. some of the benefits were to keep thousands of jobs for those employees of Wild Oats. Whole Foods in essence saved struggling Wild Oats from shutting down more stores and saved them more in financial matters.

Were John Mackey's Internet postings unethical or in any way inappropriate? What actions, if any, do you disapprove of? What actions, if any, should the company's board of directors take with regard to his Internet posting and blogs? Whole Foods always used charity activities to build its reputation, but meanwhile, how could its CEO, John Mackey, act unethically at the backside? This definitely would have impact on the companys goodwill. CEO is the mastermind and the centre of a company, customers may doubt the food and products that are sold in the company because of the moral lapse of the CEO.