Executive Summary________________________________________
The objective of this report is to describe our study about Whole Foods Market’s position in the organic supermarket industry. They have come a long way since their first store in 1980 with 19 employees to 474 stores in three countries, 87,000 employees and net revenues of USD $15.7 billion. The secret behind their success story is what we call the “Blue Ocean Strategy”. Whole Foods have created a special upscale niche market space, making the competition almost irrelevant during a time and creating and capturing new demand to break the value/cost trade-off. They aligned the whole system of the company’s activities in pursuit of both differentiation and low cost.
Whole Foods’ clear …show more content…
The industry structure sets the long-term profitability and the solid framework for anticipating and influencing competition. The five competitive forces are as follows and is shown in [Exhibit 2].
Rivalry Among Existing Competitors: Strong Force
The Rivalry is the most harmful to profitability. Whole Foods Market has many competitors such as Trader Joe’s, Sprouts Farmers Market, AJ’s Fine Foods in the natural and organic foods arena and regular supermarket grocers Wal-Mart, Target, Kroger, Safeway, Piggly Wiggly, and Publix Foods that have a rise in organic food options. Allows for low switching cost.
Threat of New Entrants: Strong Force
The strong desire to gain market share in an industry. Whole Foods Market has threats from new entrants in the organic food industry as barriers to entry are low and the demand is rising. Bargaining Power of Suppliers: Moderate -Strong Force
The Supplier can be very powerful. Whole Foods Market distribution channels are from local, national, and international suppliers that are USDA organic certified that allow for more significant leverage.
Bargaining Power of Buyers: Strong
The objective of this report is to describe our study about Whole Foods Market’s position in the organic supermarket industry. They have come a long way since their first store in 1980 with 19 employees to 474 stores in three countries, 87,000 employees and net revenues of USD $15.7 billion. The secret behind their success story is what we call the “Blue Ocean Strategy”. Whole Foods have created a special upscale niche market space, making the competition almost irrelevant during a time and creating and capturing new demand to break the value/cost trade-off. They aligned the whole system of the company’s activities in pursuit of both differentiation and low cost.
Whole Foods’ clear …show more content…
The industry structure sets the long-term profitability and the solid framework for anticipating and influencing competition. The five competitive forces are as follows and is shown in [Exhibit 2].
Rivalry Among Existing Competitors: Strong Force
The Rivalry is the most harmful to profitability. Whole Foods Market has many competitors such as Trader Joe’s, Sprouts Farmers Market, AJ’s Fine Foods in the natural and organic foods arena and regular supermarket grocers Wal-Mart, Target, Kroger, Safeway, Piggly Wiggly, and Publix Foods that have a rise in organic food options. Allows for low switching cost.
Threat of New Entrants: Strong Force
The strong desire to gain market share in an industry. Whole Foods Market has threats from new entrants in the organic food industry as barriers to entry are low and the demand is rising. Bargaining Power of Suppliers: Moderate -Strong Force
The Supplier can be very powerful. Whole Foods Market distribution channels are from local, national, and international suppliers that are USDA organic certified that allow for more significant leverage.
Bargaining Power of Buyers: Strong