Whole Foods Business Plan

Whole Foods

New Service Proposal 2012

Company Overview

The Concept

Statement of Mission and Vision

Mission Statement

Vision Statement

New Service Proposal

External and Internal Business Environment Analysis

The Business Environment Overview

Five Forces Model Analysis

Environment Discussion

Risk Analysis

Action Plan

Financial Projections

Company Overview

Whole Foods' business model is founded on the notion that food should be nutritious, healthy, and contain as few artificial ingredients as practicably possible. The company started out with nineteen people who had an idealistic approach to the way food should be grown and circulated (Whole Foods). From these modest beginnings, Whole Foods has grown to a company that employs over fifty thousand people and operates in three international markets. Whole Foods Market went public on January 23, 1992 and much of its growth has been hinged on acquisitions of various organic food brands and related goods.

Figure 1 - Whole Foods Origination (Whole Foods)

The organization represents something of a paradox to many analysts. On one hand they a strong dedication to corporate social responsibility. Whole Foods announced the introduction to their "Whole Trade Guarantee" in 2007 that tackles such issues as fair trade with developing countries and better wages and working conditions for workers (Allen). However, on the other hand, they have been reported to be less than friendly to their own employees and a frequently recognized with a strong union aversion. Dismantling the union in their industries has been listed among the organizations top priorities (Smith). Despite whatever contradiction lie in Whole Foods progressive image, the fact of the matter is that the company is the leading retail force in the organic and natural food industry. This proposal will outline a new service that can further add value to the Whole Foods customer base.

The Concept

Our idea is to create a new concept in Whole Foods market, by adding a new way to serve the customer. As opposed to simply buying raw meat ingredients, it is recommended that a service be established in which the customer can choose any kind of meat at the poultry from the store and then a chef can cook it in right in front of them if they wait or they may also chose to continue shopping. The customer could either choose sides and drink as well, after that they can eat in the luxury place which has been re-modeled for them in the second floor in the market. Cooking healthy organic food right in front of the costumer could generate a great deal of excitement for the customers. Customers could use this opportunity to witness how Whole Foods products should be prepared for best results or also use the service to sample new products.

To further develop this proposal, the goal or objective was to look at a number of other organizations both small and large that might be offering a number of similar products and food based items such as the ones that we intended to promote. As per the earlier assignments, the key objective of the Whole Foods Market Grill is to be able to offer a number of custom tailored food items that are both organic but also fresh at the same time and that itself ensures that there is the inherent notion of providing the best value added products to the end clients that come to shop here. There are a number of other food eateries that seems to offer something very similar as that is entirely consistent within their mission and vision statements. A survey of the market was taken and a new mission and vision statement for Whole Foods was developed.

Statement of Mission and Vision

After having taken an in depth look at all of these mission statements and business strategies of a number of our competitors, the following is our initial Mission and Vision statements:

Mission Statement

"Our mission is to offer organic, high quality and the freshest of all grilled foods for price conscious customers at a location that is very convenient but also inviting with an end commitment of being the best grilled chain in the industry."

Vision Statement

"Our vision is to be the "premier grilled market within the communities that we operate in and strive to become the leading place for having grilled lunches or dinners."

For the purposes of this given assignment, the task was to come up with as much information about the competitive landscape as feasibly possible for our selected and intended project on "Whole Foods Market Grill." Several lines of investigations were conducted including an industry overview analysis, a Porter's Five Forces analysis, as well as a SWOT analysis. Understand the market nuances of the market served as the foundation that allowed us to properly critic the project proposal.

New Service Proposal

The idea that was chosen is to develop a section at Whole Foods that customers can come in to the store pick any kind of meat and take it to a certain section of the store and have a chef cook it for them. The cost of this service will be $5 plus the cost of the meat that is selected. The customer is also given a choice as to whether or not they want to actually learn to cook the meats. This is expected to bring in revenues for the stores because not only are more people that aren't sure how to cook meat going to buy more meat but it will also bring in more shoppers that are more than likely to buy other products in the store and increase revenue that way as well.

External and Internal Business Environment Analysis

The Business Environment Overview

There are two primary social drivers that have subsidized a great deal of the success that Whole Foods has experienced throughout the years. The first is that in general consumers are becoming more health conscious as well as becoming increasingly concerned about what kind of processes and artificial additives go into the foods that they eat. These consumer segments are conscious of such considerations and are prone to appreciate the product lineup that Whole Foods offers and are generally also willing to pay a premium over lower cost alternatives. However, this can be a mixed blessing since at the same time there are many social drivers that also prevent people from shopping at Whole Foods such as time and money constraints.

Many of the political drivers that affect Whole Foods and the industry in general can be summarized by vast amounts of uncertainty that are driven by a highly polarized political environment. So far in its history, Whole Foods has not had to deal with excessive regulations or consumer protection measures other than some certifications and regulations involving organic marketing (USDA). However, if this industry becomes the subject of increasing regulations the freedom that the organization has had could change quickly. Even though increased regulations would be a hindrance for Whole Foods product line up, since the products are mostly organic this could actually become a competitive advantage if food regulation were accelerated in the future because it could create even more havoc for some of the competition.

The economic drivers that shape Whole Foods competitive landscape and consumer base are also subject to large amounts of uncertainty as well. The global recession has reduced the amount of disposable income that various consumer segments possess (Bawden). Since Whole Foods products are relatively more expensive than the products that are produced by mass production, a drop in disposable income can cause the organization tremendous financial harm because of the incentive to purchase substitute products. However, with the customer loyalty to the organization sustained at a high level coupled with the high margins the organic products receive, it is likely that Whole Foods will be able to sustain any shocks to disposable income. Furthermore, even when the business is operating at a low profit margin is still has an incredibly high turnover rate when compared to other players in the same industry.

Figure 2 - Low Margins - High Turnover (Maranjian)

Whole Foods has a refined enterprise resource management system which it uses to manage its inventory and its supply chain. Despite the level of technological sophistication that Whole Foods employs, many mainstream competitors have much more efficient systems. Wal-Mart for example has built a distribution network that Whole Foods would have virtually no possibility of competing with directly. However, in the organic foods niche, this level of technology could act as a barrier to entry for smaller firms. Another challenge for the organization is that their products often have shorter shelf lives than traditional grocers because of the lack of preservatives which can add a level of complexity to managing inventories (Maranjian).

Five Forces Model Analysis

Threat of New Entrants

There are a number of new entrants that are entering the marketplace and could pose a threat to established industry firms who also wish to prepare food for customers.

Some of these new relatively new.....