Industry Analysis
Whole Foods Market is in the Supermarket or grocery store industry. The industry can be considered as a part of the retail industry due to the operation and overall revenue each business receives. The industry’s main source of production includes produce, dairy products, and frozen foods.
Porter’s five forces analysis for the Supermarket industry is used by Whole Foods Market to build an analysis of the level of competition throughout the industry. Each of the five forces have a different effect on the company from low to high.
Threat of New Entry
The threat of new entry competitors is low in the industry. It is hard for new businesses to make any successful strategy in the industry due to high costs in the industry. Whole …show more content…
There are many methods a consumer can choose to shop groceries. From the large chains of Target to farmer’s markets, these competitors and substitution provide the greatest challenge for Whole Foods Market. Whole Foods has a challenge in competing with multiple companies that offer more than only food such as Wal-Mart. In countering the threats of Whole Foods, the company may benefit from focusing on effective pricing and customer experience for existing customers. Offering the best value for the high end organic and nature foods will provide the most effective method in attracting new customers, and gaining more loyalty from the existing customers.
Financial Analysis
Analysis for Whole Foods Market is analyzed through the use of the Annual Report Form 10-K from the fiscal year ending on September 28, 2014. Several important financial ratios and percentages show trends that Whole Foods Market can use to improve future net profits for the company. Effective ratios for Whole Foods Market include liquidity ratios and profit margins used for analysis. The financial numbers are taken for the balance sheet and income statement:
The first ratio is the current ratio that measures current assets against the current liabilities. This measures the liquidation the company has:
1,756 / 1,257 = 1.40
Whole Foods Market is in the Supermarket or grocery store industry. The industry can be considered as a part of the retail industry due to the operation and overall revenue each business receives. The industry’s main source of production includes produce, dairy products, and frozen foods.
Porter’s five forces analysis for the Supermarket industry is used by Whole Foods Market to build an analysis of the level of competition throughout the industry. Each of the five forces have a different effect on the company from low to high.
Threat of New Entry
The threat of new entry competitors is low in the industry. It is hard for new businesses to make any successful strategy in the industry due to high costs in the industry. Whole …show more content…
There are many methods a consumer can choose to shop groceries. From the large chains of Target to farmer’s markets, these competitors and substitution provide the greatest challenge for Whole Foods Market. Whole Foods has a challenge in competing with multiple companies that offer more than only food such as Wal-Mart. In countering the threats of Whole Foods, the company may benefit from focusing on effective pricing and customer experience for existing customers. Offering the best value for the high end organic and nature foods will provide the most effective method in attracting new customers, and gaining more loyalty from the existing customers.
Financial Analysis
Analysis for Whole Foods Market is analyzed through the use of the Annual Report Form 10-K from the fiscal year ending on September 28, 2014. Several important financial ratios and percentages show trends that Whole Foods Market can use to improve future net profits for the company. Effective ratios for Whole Foods Market include liquidity ratios and profit margins used for analysis. The financial numbers are taken for the balance sheet and income statement:
The first ratio is the current ratio that measures current assets against the current liabilities. This measures the liquidation the company has:
1,756 / 1,257 = 1.40