Whole Foods Market's Growth Strategies and Future Prospects

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Case Details:

Case Code : BSTR244
Case Length : 22 Pages
Period : 1978-2006
Pub Date : 2007
Teaching Note : Available
Organization : Whole Foods Market
Industry : Retail
Themes: Growth Strategy
Countries : The US

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

The Whole Foods Experience

The demand for natural and organic foods had been growing rapidly in the US in the late 1990s and the early 2000s. According to figures released by the Organic Trade Association (OTA) , sales of organic food grew from $3.6 billion in 1997 to $13.8 billion in 2005. Although WFM had been the first retailer to adopt a supermarket format for selling natural and organic products, competition had increased over the years.

In the early 2000s, WFM's biggest competitors in the US were retailers like Wild Oats Market Inc. and Trader Joe's. The company also faced competition from local farmers' markets, which were very popular when in season, for fresh produce.

Another reason for the popularity of the local farmers' markets was that the produce was priced rather reasonably, when compared to retail chains like WFM, which typically charged a premium...

Growth through Differentiation

One of the biggest drivers of WFM's growth in the years since its inception was the company's unique value proposition as a retailer committed to natural and organic foods and environment- friendly operating practices. This differentiated it from regular retailers. In addition, it also set it apart from other natural foods retailers who could not generally match WFM's size and scope.

WFM's motto "Whole Foods - Whole People - Whole Planet" reflected its social responsibility and business objectives (Refer to Exhibit VI). On its website the company declared, "We believe in a virtuous circle entwining the food chain, human beings, and Mother Earth: each is reliant upon the others through a beautiful and delicate symbiosis."

Culture as a Source of Competitive Advantage

WFM was known for its strong employee-oriented work culture, which emphasized teamwork, autonomy, empowerment, and transparency.

According to analysts, this culture played an important role in the growth and success of the company, by allowing it to grow without the burden of bureaucratic practices...

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