Whole Foods has implemented ma…
Whole Foods has implemented many policies and procedures for its strategy, these include; the store locations, the product lines, the pricing of their products, their merchandising and many more. These all should help their strategy and competitive advantage over other businesses. They also help Whole Foods customers with these strategies. Whole Food’s business strategy is a differentiation strategy because they’re a business that strives on being different from other grocery stores and finding the highest-quality products with the best prices. They try to show their store off by putting certain products in places where customer traffic is high, mainly by the in-out doors. They also use colorful décor in the stores too, to give their customers a decent feeling while they shop.
They differentiate themselves by trying to get the best produce from organic and natural farmers while also using its centralized buying group that buys the food from wholesale suppliers and vendors. This strategy comes with high prices but the people who shop at Whole Foods are people who have the money to buy the organic or natural foods or people who want a healthy lifestyle. Also with the use of Porter’s five forces the company has many problems now as they begin to have more rivalry with other companies like; Walmart. For example, I witnessed a Whole Foods store close in Jefferson, WI due to a Walmart that opened across the street. I think that Whole Foods still has buying power because people can get anything they need at their stores. While Walmart still has many organic and natural products, customers would more likely need to search for them throughout the store costing them time. I also think that Whole Foods has supplier power because what company wouldn’t want to have their organic or natural products in a store where people are looking for their products, and only sells their kind of products.
To start, they made eight core values for their business. These core values show the companies culture. The core values also show that Whole Foods employees help their customers by supporting their health and well-being along with the planet. Showing these core values on their website probably brings in more customers to shop at their stores too. In addition, the company made a growth strategy where they expanded by acquiring other companies that sold organic and natural products. These companies were probably re-arranged in a way to meet the quality standards of Whole Foods. Over time, there might not be any other companies that Whole Foods would want to acquire, leading them to only open new stores.
Store location strategy, it is a strategy where the store’s development group picks the location of the new store based on the sales and profits projections in a metropolitan area. They also see if the economic value added (EVA) for a new store would show a cumulative positive EVA in less than five years. These store locations for Whole Foods were mainly in high traffic areas. Furthermore, Whole Foods implemented a product line for the different sizes of stores they owned while also using the information they had on the population density, the incomes of people that were within a certain drive time area, and the education of the population. These product lines have a variety of categories too including; seafood, dried, frozen, bakery, and many other products and goods. This helps their customers because they can get anything they needed at one store. Their products meet strict standards, and the company shows customers what ingredients the products can and cannot have.
Another strategy is their pricing strategy, it changed tremendously after the 2008-2009 recession. They now do research and monitor the prices rivals put on their products. This helps them retain customers as the prices will be like their rivals. They implemented programs where they made agreements with their suppliers to get better deals on their products. This helps them lower their prices without interfering with their margins. The company also started to use aisle displays to display weekly deals. By doing this the company promoted some of their products.
I think that this could have given people options to try new foods but Whole Foods only did this for high priced products. In fact, they have a merchandising strategy where layouts for stores were fit into spaces so that the company can best show off their products. They put the hand-stacked produce up front. What isn’t stopping other companies to do the same? Well, it could be that they don’t want to look like they are copying or that they have a different strategy for what they are selling. Whole Food has also put in sit-down eating areas where customers could sit down and eat. This was a great idea, customers could eat or have a snack before, during or after they shopped. Additionally, they have a marketing strategy that used to be mainly by word of mouth.
They didn’t really need to do anything to gain customers because once a customer walked into one of the Whole Foods stores they were immersed in a new world of grocery shopping. The customers would come back and bring their friends and family too. The company also uses social media like many companies do, but they push out many messages on many different platforms. I believe that there are many customer service questions answered within their social media too, so 1000 messages might not be a lot for a company of their size. Their customer service strategy can be similar and different to other companies in many ways. They do have employees, but they are called team members, this gives the team members a feeling that they mean something to the company. Team members do help customers in many of the same ways other companies do, but there was more of an incentive to push yourself working for Whole Foods.
You would need to show a team leader that you were worth the hire. You would make goals for yourself while pursuing goals put out by others and team leaders. There was a bigger incentive to be a great team member because you and your team would also be evaluated by other teams at the same store. Purchasing and distribution, their purchasing and distributing strategy encompassed a buying group who would buy from wholesale regional and national suppliers and vendors to get better discounts from them. The group would also buy from local producers to show the community the fact that they are selling natural and organic products from within the nearby area. Additionally, Whole Foods help communities out by donating to organizations. The company donated 5% or more in after-tax profits to local non-profit organizations in the community.
They also helped with the animal cruelty of their suppliers. The company also put many systems in place to help even more. These systems include but are not limited to; its exclusive Eco-scaling system, its non-profit Whole Planet foundation, its Whole Trade Guarantee program, and whole Kids foundation. To conclude these strategies are helping Whole Foods continue to have a differentiation business-level strategy. I believe that Whole Foods will continue to flourish in cities with a population that wants to stay healthy. Other competitors will certainly take over the small communities they currently are in just like my example of Jefferson’s store and Walmart.