Whole Foods- Strategic Management Essay

642 Words Jul 29th, 2012 3 Pages
Whole Foods Market Case Study

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 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 Mackey’s vision for Whole Foods was “For Whole Foods to become an international brand synonymous not just with natural and organic foods but also being the best food retailer in every community in which Whole Foods stores were located.” He wanted Whole Foods Market to set the standard for excellence in food retailing. All in all John Mackey wanted to help support the
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Whole Foods Market is performing really well from a financial standpoint. From looking at exhibit 9 you can see that every year their profits have gradually increased. A couple of key ratios that assess how well a company’s financial performance is doing would be the gross profit margin, operating profit margin, and current ratio. We will look at the most current year that they have which is 2007.

First we will look at gross profit margin. This is sales-cost of goods sold/sales. This shows the percent of revenues available to cover operating expenses and yield a profit. For Whole Foods it is 34%. This is a good number but could be higher for such a prospering company. The next ratio we will look at is the operating profit margin. This is sales-operating expenses/sales. This shows the profitability of current operations without regard to interest charges and income taxes. For Whole Foods in this segment it was 74%, which is an excellent number. The higher the number the better and this is a good number, which shows that Whole Foods is doing a great job. The last ratio we looked at was the current ratio, which is the current assets/current liabilities. This shows a firms ability to pay current liabilities using assets that can be converted to cash in the near term. For Whole Foods this number is 1.83, which is an excellent indicator that the company’s assets can easily be turned

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